Gambling.com group reports 2021 financial results
Charlotte, n.c.--(business wire)--gambling.com group limited (nasdaq: gamb) (“gambling.com group” or the “company”), a leading provider of digital marketing services for the global online gambling industry, today announced its operating and financial results for the year and the fourth quarter ended december 31, 2021. 2021 financial highlights north american revenue grew 89% to $7.5 million compared to $4.0 million for the prior year revenue of $42.3 million grew 51% compared to $28.0 million for the prior year net income of $12.5 million, or $0.37 per diluted share, compared to a net income of $15.2 million, or $0.49 per diluted share, for the prior year adjusted ebitda of $18.4 million increased 26% compared to $14.6 million for the prior year, representing an adjusted ebitda margin of 43%1 free cash flow of $8.4 million decreased 22% compared to $10.8 million for the prior year1 fourth quarter 2021 financial highlights north american revenue grew 56% to $2.2 million compared to $1.4 million in the same period for the prior year revenue of $10.3 million remained consistent to $10.3 million in the same period for the prior year net income of $0.9 million, or $0.02 per diluted share, compared to a net income of $8.5 million, or $0.35 per diluted share, in the same period for the prior year adjusted ebitda of $2.3 million decreased 63% compared to $6.1 million in the same period for the prior year, representing an adjusted ebitda margin of 22%1 free cash flow of $(1.8 million) compared to $3.5 million for the prior year1 business highlights completed successful public listing of ordinary shares on the nasdaq global market in july 2021 under the ticker symbol “gamb” named the 2021 egr affiliate of the year and 2021 sbc north america casino affiliate of the year delivered 117,000 new depositing customers in 2021 compared to 104,000 in 2020 launched several new u.s.- facing websites during 2021 and acquired an incredibly strong portfolio of u.s. specific domain names announced the acquisition of rotowire.com – a leader in u.s online fantasy sports – in december 2021 to leverage rotowire’s high-quality traffic and drive substantial incremental sports betting affiliate revenue in the u.s., the acquisition was completed on january 1, 2022 announced media partnership with mcclatchy in january 2022 to monetize the mcclatchy portfolio of digital media assets through sports betting in 29 markets across 14 states successfully entered the new york and louisiana markets in january 2022 announced acquisition of bonusfinder.com in february 2022 to better position the group for the upcoming market launch in ontario and further strengthening the group's north american presence “we grew our revenue in 2021 by 51% compared to the prior year, delivered an ebitda margin of 43% and generated over $8 million of free cash flow as many other industry players struggled to find a path to sustainable profitability,” said charles gillespie, chief executive officer and co-founder of gambling.com group. “as we look towards 2022, we are encouraged by the strongest start to a year we have seen in our 15-year history. helped by launches in new york and louisiana, january was our best-single month performance ever – even before consolidating financial results from our recent acquisitions. just in january, we have seen the total addressable market in north america expand by leaps and bounds and there is a clear path to additional state launches this year, along with the impending launch of ontario next month. as b2c operators in the u.s. seek a path to sustainable profitability and evaluate their marketing spend going forward, we believe that the affiliate model is ideally positioned to provide operators with more effective, higher roi investments where they can clearly attribute the source, profitability and lifetime value of a referred player. we view this shift as greatly benefitting the value of our performance marketing revenue model, and we are confident that these tailwinds support what we expect to be another year of record performance for the group.” 2022 outlook based on currently available information, the group estimates that, for the full year 2022: total revenue will be in the range of $71 million and $76 million; and adjusted ebitda will be in the range $22 million and $27 million1 elias mark, chief financial officer of gambling.com group, added, “our expectation for another year of record revenue and adjusted ebitda is supported primarily by our premier domain portfolio and our growing presence in the u.s. achieved through continuous investments in u.s-facing assets. organic growth in north america is complemented by our recent acquisitions of rotowire.com and bonusfinder.com as well as our initiatives to further our leadership in the more established markets that we currently serve. as we have stated, our adjusted ebitda margin may deviate from target in the short-term as we strategically invest to strengthen our u.s. footprint, which is reflected in our 2022 outlook. nonetheless, our profitability metrics remain among the very best in the industry, and our free cash flow generation more than covers our organic growth initiatives and the acquisition of domain names and other assets. we entered 2022 on strong financial footing and are off to the best start to a year in the company history led by strong growth in north america. we grew total revenue profitably by 51% in 2021 and we look forward to accelerate that rate of profitable growth in 2022.” 2021 – 2023 financial targets total revenue growth > average 40% adjusted ebitda margin1 > average 40% leverage2 < net debt to adjusted ebitda 2.5x3 1 adjusted figures represent non-ifrs information. see “non-ifrs financial measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable ifrs numbers. 2 leverage is defined as net debt as a proportion of adjusted ebitda. 3 net debt is defined as borrowings less cash and cash equivalents. 2021 vs. 2020 financial highlights year ended december 31, change 2021 2020 $ % (in thousands usd, except for share and per share data) consolidated statements of comprehensive (loss) income data revenue 42,323 27,980 14,343 51 % operating expenses (30,931 ) (16,849 ) (14,082 ) 84 % operating profit 11,392 11,131 261 2 % income before tax 12,164 10,752 1,412 13 % net income for the period attributable to the equity holders 12,453 15,151 (2,698 ) (18 )% net income per share attributable to ordinary shareholders, basic 0.40 0.55 (0.15 ) (27 )% net income per share attributable to ordinary shareholders, diluted 0.37 0.49 (0.12 ) (24 )% year ended december 31, change 2021 2020 $ % (in thousands usd, except adjusted ebitda margin, unaudited) non-ifrs financial measures adjusted ebitda 18,356 14,608 3,748 26 % adjusted ebitda margin 43 % 52 % n/m n/m free cash flow 8,423 10,804 (2,381 ) (22 )% n/m = not meaningful year ended december 31, change 2021 2020 amount % (in thousands, unaudited) other supplemental data new depositing customers (1) 117 104 13 13 % revenue total revenue increased 51% to $42.3 million for the year ended december 31, 2021 compared to $28.0 million for the prior year. on a constant currency basis, revenue increased $13.4 million, or 46%. revenue growth was organic. the increase was driven by both growth in ndcs and improved monetization of ndcs that we attribute to a combination of technology improvements and changes in product and market mix. ndcs increased 13% to 117,000 compared to 104,000 in the prior year. our revenue disaggregated by market is as follows: year ended december 31, change 2021 2020 $ % (in thousands usd) u.k. and ireland 21,391 16,189 5,202 32 % other europe 10,800 5,252 5,548 106 % north america 7,484 3,959 3,525 89 % rest of the world 2,648 2,580 68 3 % total revenues 42,323 27,980 14,343 51 % revenue increases were primarily driven by growth in revenue from the u.k. and ireland, other europe, and north america. our revenue disaggregated by monetization is as follows: year ended december 31, change 2021 2020 $ % (in thousands usd) hybrid commission 15,616 14,738 878 6 % revenue share commission 3,596 3,308 288 9 % cpa commission 18,591 9,047 9,544 105 % other revenue 4,520 887 3,633 410 % total revenues 42,323 27,980 14,343 51 % revenue increases were driven primarily by additional cost per acquisition, or cpa, commission and other revenue. the increase in other revenue was driven by bonuses related to achieving certain operator ndc performance targets and fixed fees. our revenue disaggregated by product type from which it is derived is as follows: year ended december 31, change 2021 2020 $ % (in thousands usd) casino 35,632 24,135 11,497 48 % sports 6,188 3,210 2,978 93 % other 503 635 (132 ) (21 )% total revenues 42,323 27,980 14,343 51 % revenue increases were driven by growth in revenue from casino and sports products. operating expenses year ended december 31, change 2021 2020 $ % (in thousands usd) sales and marketing expenses 14,067 8,103 5,964 74 % technology expenses 3,947 2,503 1,444 58 % general and administrative expenses 13,014 5,956 7,058 119 % movements in credit losses allowance and write offs (97 ) 287 (384 ) (134 )% total operating expenses 30,931 16,849 14,082 84 % total operating expenses increased by $14.1 million to $30.9 million compared to $16.8 million in the prior year. on a constant currency basis, operating expenses increased by $13.5 million, or 77%. the increase was driven primarily by increased headcount across sales and marketing, technology, and general and administrative functions as we invest in the company's organic growth initiatives as well as increased administrative expenses associated with operating as a public company. sales and marketing expenses totaled $14.1 million compared to $8.1 million in the prior year. the increase was driven primarily by increased wages and salary expenses associated with increased headcount. technology expenses totaled $4.0 million compared to $2.5 million in the prior year. the increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs. general and administrative expenses totaled $13.0 million compared to $6.0 million in the prior year. the increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses. earnings adjusted ebitda increased by 26% to $18.4 million compared to $14.6 million in the prior year representing an adjusted ebitda margin of 43%. the increase was driven primarily by increased revenue partly offset by increased operating expenses. operating profit remained relatively constant at $11.4 million compared to $11.1 million in 2020. operating profit in 2021 was affected by non-recurring costs related to the public offering and future acquisitions by $2.6 million, and share based payments costs by $ 2.0 million ($0.7 million and $0.4 million, respectively, in 2020). net income totaled $12.5 million, or $0.37 per diluted share, compared to net income of $15.2 million, or $0.49 per diluted share, in the prior year. net income in 2020 was positively affected by the recognition of deferred tax assets of $5.4 million and gain from bonds' redemption of $1.4 million ($1.8 million and zero, respectively, in 2021). free cash-flow total cash generated from operations of $14.0 million increased 28% compared to $10.9 million in the prior year. the increase was driven primarily by increased adjusted ebitda. free cash flow totaled $8.4 million compared to $10.8 million in the prior year. the decline was the result of increased cash flow generated from operations offset by increased capital expenditures consisting primarily of the acquisition of domain names and capitalized development costs. balance sheet as of december 31, change 2021 2020 $ % (in thousands, usd) consolidated statements of financial position data cash and cash equivalents 51,047 8,225 42,822 521 % working capital (2) 46,714 10,059 36,655 364 % total assets 91,025 45,383 45,642 101 % total borrowings 5,944 5,960 (16 ) (0 )% total liabilities 11,116 11,171 (55 ) (0 )% total equity 79,909 34,212 45,697 134 % n/m = not meaningful cash balances as of december 31, 2021 totaled $51.0 million, an increase of $42.8 million compared to $8.2 million as of december 31, 2020. working capital as of december 31, 2021 totaled $46.7 million, an increase of $36.6 million compared to $10.1 million as of december 31, 2020. total assets as of december 31, 2021 were $91.0 million compared to $45.4 million as of december 31, 2020. total borrowings, including accrued interest, remained constant at $5.9 million as of december 31, 2021 and 2020. total liabilities decreased slightly as of december 31, 2021 to $11.1 million compared to $11.2 million as of december 31, 2020. total equity as of december 31, 2021 was $79.9 million compared to $34.2 million as of december 31, 2020. the increases in working capital, total assets, and total equity were driven primarily by the net proceeds received from the ipo and operating profit and net income generated by the company. fourth quarter 2021 vs. fourth quarter 2020 financial highlights three months ended december 31, change 2021 2020 $ % (in thousands usd, except for share and per share data, unaudited) consolidated statements of comprehensive (loss) income data revenue 10,291 10,267 24 0 % operating expenses (9,668 ) (5,897 ) (3,771 ) 64 % operating profit 623 4,370 (3,747 ) (86 )% income before tax 1,311 3,489 (2,178 ) (62 )% net income for the period attributable to the equity holders 867 8,541 (7,674 ) (90 )% net income per share attributable to ordinary shareholders, basic 0.03 0.39 (0.36 ) (92 )% net income per share attributable to ordinary shareholders, diluted 0.02 0.35 (0.33 ) (94 )% three months ended december 31, change 2021 2020 $ % (in thousands usd, unaudited) non-ifrs financial measures adjusted ebitda 2,272 6,115 (3,843 ) (63 )% adjusted ebitda margin 22 % 60 % n/m (38 )% free cash flow (1,811 ) 3,533 (5,344 ) (151 )% n/m = not meaningful three months ended december 31, change 2021 2020 amount % (in thousands, unaudited) other supplemental data new depositing customers (1) 28 35 (7 ) (20 )% revenue total revenue in the fourth quarter remained relatively constant at $10.3 million. on a constant currency basis, revenue remained relatively constant. ndcs decreased 20% to 28,000 compared to 35,000 in the prior year. we attribute the improved monetization of ndcs to a combination of technology improvements and changes in product and market mix. our revenue disaggregated by market is as follows: three months ended december 31, change 2021 2020 $ % (in thousands usd, unaudited) u.k. and ireland 5,226 5,780 (554 ) (10 )% other europe 2,260 2,299 (39 ) (2 )% north america 2,154 1,383 771 56 % rest of the world 651 805 (154 ) (19 )% total revenues 10,291 10,267 24 0 % changes in revenue were driven by strong organic growth in our north american markets, offset by a decline in the u.k. and ireland and, to a lesser extent, other europe and rest of the world. u.k. and ireland revenue was negatively affected by higher than usual volatility in organic search traffic. in the comparable period, u.k. and ireland revenue was positively affected by increased demand coinciding with restrictive covid-19 measures. other europe was negatively affected by regulatory changes in germany implemented in july 2021 partly offset by growth in revenue from other european markets. our revenue disaggregated by monetization is as follows: three months ended december 31, change 2021 2020 $ % (in thousands usd, unaudited) hybrid commission 2,935 5,557 (2,622 ) (47 )% revenue share commission 744 1,004 (260 ) (26 )% cpa commission 5,202 3,271 1,931 59 % other revenue 1,410 435 975 224 % total revenues 10,291 10,267 24 0 % revenue from cpa commission and other revenue increased whereas revenue from hybrid and revenue share commission decreased. the changes in monetization were primarily a result of changes in market mix with a higher proportion of revenue from the u.s compared to the previous year. the increase in other revenue was driven primarily by bonuses related to achieving certain operator ndc performance targets and fixed fees. our revenue disaggregated by product type from which it is derived is as follows: three months ended december 31, change 2021 2020 $ % (in thousands usd, unaudited) casino 8,466 8,846 (380 ) (4 )% sports 1,769 1,160 609 53 % other 56 261 (205 ) (79 )% total revenues 10,291 10,267 24 0 % revenue increases were driven by growth in revenue from sports products offset by a decrease in casino and other revenue. operating expenses three months ended december 31, change 2021 2020 $ % (in thousands usd, unaudited) sales and marketing expenses 4,632 2,442 2,190 90 % technology expenses 1,190 798 392 49 % general and administrative expenses 3,877 2,609 1,268 49 % movements in credit losses allowance and write offs (31 ) 48 (79 ) (165 )% total operating expenses 9,668 5,897 3,771 64 % total operating expenses increased by $3.8 million to $9.7 million compared to $5.9 million in the prior year. on a constant currency basis, operating expenses increased by $3.6 million, or 58%. the increase was driven primarily by headcount across sales and marketing, technology, and general and administrative functions as we invest in the company's organic growth initiatives as well as increased administrative expenses associated with operating as a public company. sales and marketing expenses totaled $4.6 million compared to $2.4 million in the prior year. the increase was driven primarily by increased wages and salary expenses associated with increased headcount. technology expenses totaled $1.2 million compared to $0.8 million in the prior year. the increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs. general and administrative expenses totaled $3.9 million compared to $2.6 million in the prior year. the increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses. earnings adjusted ebitda decreased by 63% to $2.3 million compared to $6.1 million in the prior year representing an adjusted ebitda margin of 22%. the decrease was driven by increased operating expenses. operating profit in the fourth quarter decreased 86% to $0.6 million compared to $4.4 million in 2020. the decrease was driven primarily by a decrease in adjusted ebitda and an increase in share-based payments expense. net income in the fourth quarter totaled $0.9 million, or $0.02 per diluted share, compared to net income of $8.5 million, or $0.35 per diluted share, in the prior year. net income in the forth quarter 2021 was positively affected by a usd/euro foreign currency exchange gain of $1.1 million (zero in 2020). while net income in the fourth quarter of 2020 was positively affected by the recognition of deferred tax assets of $5.4 million (deferred tax asset reduction of $0.2 million in 2021). conference call details date/time: thursday, march 24, 2022, at 9:00 am est webcast: https://www.webcast-eqs.com/gamb20220324/en u.s. toll-free dial in: 877-407-0890 international dial in: +1-201-389-0918 to access the call, please dial in approximately ten minutes before the start of the call. an accompanying slide presentation will be available in pdf format within the “news & events” section of the company’s website. an archived webcast of the conference call will also be available in the news & events section of the company’s website at gambling.com/corporate/investors/news-events. about gambling.com group gambling.com group limited (nasdaq: gamb) is a multi-award-winning performance marketing company and a leading provider of digital marketing services active exclusively in the online gambling industry. founded in 2006, the group operates from offices in ireland, the united states and malta. through its proprietary technology platform, the group publishes a portfolio of premier branded websites including gambling.com, bookies.com and rotowire.com. as of march 24, 2022, the group owns and operates more than 50 websites in seven languages across 15 national markets covering all aspects of the online gambling industry, including igaming and sports betting. cautionary note concerning forward-looking statements this press release contains forward-looking statements within the meaning of section 27a of the securities act, section 21e of the exchange act and the safe harbor provisions of the u.s. private securities litigation reform act of 1995, that relate to our current expectations and views of future events. all statements other than statements of historical facts contained in this press release, including statements relating to 2022 financial performance, including the 2022 financial outlook, are all forward looking statements. these statements represent our opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. in some cases, you can identify forward-looking statements by terms such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” “could,” “will,” “would,” “ongoing,” “future” or the negative of these terms or other similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. these forward-looking statements involve known and unknown risks, uncertainties, contingencies, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance or achievements to be materially and/or significantly different from any future results, performance or achievements expressed or implied by the forward-looking statement. important factors that could cause actual results to differ materially from our expectations are discussed under the caption “risk factors” in gambling.com group’s prospectus pursuant to rule 424(b) filed with the us securities and exchange commission (“sec”) on july 23, 2021, and gambling.com group’s other filings with the sec as such factors may be updated from time to time. any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. gambling.com group disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law. consolidated statements of comprehensive income and (loss) (usd in thousands, except per share amounts) three months ended december 31, year ended december 31, 2021 2020 2021 2020 (unaudited) revenue 10,291 10,267 42,323 27,980 sales and marketing expenses (4,632 ) (2,442 ) (14,067 ) (8,103 ) technology expenses (1,190 ) (798 ) (3,947 ) (2,503 ) general and administrative expenses (3,877 ) (2,609 ) (13,014 ) (5,956 ) movements in credit losses allowance and write offs 31 (48 ) 97 (287 ) operating profit 623 4,370 11,392 11,131 (losses) gains on financial liability at fair value through profit or loss — (393 ) — 1,417 finance income 1,145 (25 ) 2,581 303 finance expense (457 ) (463 ) (1,809 ) (2,099 ) income before tax 1,311 3,489 12,164 10,752 income tax (charge) benefit (444 ) 5,052 289 4,399 net income for the period attributable to the equity holders 867 8,541 12,453 15,151 other comprehensive (loss) income exchange differences on translating foreign currencies (1,825 ) 1,730 (4,812 ) 2,480 total comprehensive (loss) income for the period attributable to the equity holders (958 ) 10,271 7,641 17,631 net income per share attributable to ordinary shareholders, basic 0.03 0.39 0.40 0.55 net income per share attributable to ordinary shareholders, diluted 0.02 0.35 0.37 0.49 consolidated statements of financial position (usd in thousands) december 31, 2021 december 31, 2020 assets non-current assets property and equipment 569 515 intangible assets 25,419 23,560 right-of-use assets 1,465 1,799 deferred tax asset 7,028 5,778 total non-current assets 34,481 31,652 current assets trade and other receivables 5,497 5,506 cash and cash equivalents 51,047 8,225 total current assets 56,544 13,731 total assets 91,025 45,383 equity and liabilities equity share capital — 64 capital reserve 55,953 19,979 share options and warrants reserve 2,442 296 foreign exchange translation reserve (2,282 ) 2,530 retained earnings 23,796 11,343 total equity 79,909 34,212 non-current liabilities borrowings — 5,937 lease liability 1,286 1,562 total non-current liabilities 1,286 7,499 current liabilities trade and other payables 3,291 2,428 borrowings and accrued interest 5,944 23 lease liability 393 413 income tax payable 202 808 total current liabilities 9,830 3,672 total liabilities 11,116 11,171 total equity and liabilities 91,025 45,383 consolidated statements of cash flows (usd in thousands) three months ended december 31, year ended december 31, 2021 2020 2021 2020 (unaudited) cash flow from operating activities income before tax 1,311 3,489 12,164 10,752 finance (income) expenses, net (688) 488 (772) 1,796 losses (gains) on financial instruments valuation — 393 — (1,417) adjustments for non-cash items: depreciation and amortization 600 650 2,401 2,227 movements in credit loss allowance and write offs (31) 48 (97) 287 other operating loss — — 70 — share option charge 529 371 1,995 315 income tax paid (807) (434) (2,092) (642) cash flows from operating activities before changes in working capital 914 5,005 13,669 13,318 changes in working capital trade and other receivables 192 (2,015) (549) (3,053) trade and other payables 70 603 877 629 cash flows generated by operating activities 1,177 3,593 13,997 10,894 cash flows from investing activities acquisition of property and equipment (78) (14) (305) (46) acquisition of intangible assets (2,910) (46) (5,269) (44) cash flows used in investing activities (2,988) (60) (5,574) (90) cash flows from financing activities issue of ordinary shares and share warrants — 2,955 35,910 3,483 equity issue costs — (14) — (55) proceeds from issuance of financial instruments — 6,000 — 6,000 financial instruments issuance costs — (94) — (89) repayment of notes and bonds — (14,397) — (17,352) interest paid (124) (997) (509) (1,656) warrants repurchased — — — (133) principal paid on lease liability (66) (49) (225) (198) interest paid on lease liability (45) (56) (188) (201) cash flows (used in) generated by financing activities (235) (6,652) 34,988 (10,201) net movement in cash and cash equivalents (2,046) (3,119) 43,411 603 cash and cash equivalents at the beginning of the period 53,160 10,851 8,225 6,992 net foreign exchange differences on cash and cash equivalents (67) 493 (589) 630 cash and cash equivalents at the end of the period 51,047 8,225 51,047 8,225 supplemental information constant currency changes in our financial results include the impact of changes in foreign currency exchange rates. we provide “constant currency” analysis, as if eur-usd exchange rate had remained constant period-over-period, to enhance the comparability of our results. when we use the term “constant currency,” we adjust for the impact related to the translation of our condensed consolidated financial statements from eur to usd by translating financial data for the prior year using the same foreign currency exchange rates that we used to translate financial data for the current year. constant currency metrics should not be considered in isolation or as a substitute for reported results prepared in accordance with ifrs. refer to “results of operations” for management’s discussion of the constant currency impact for these periods. for foreign exchange rates used, refer to “note 3 significant accounting policies,” within the notes to the condensed consolidated financial statements. rounding we have made rounding adjustments to some of the figures included in the discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto. accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them. non-ifrs financial measures management uses several financial measures, both ifrs and non-ifrs financial measures in analyzing and assessing the overall performance of the business and for making operational decisions. ebitda, adjusted ebitda and adjusted ebitda margin ebitda is a non-ifrs financial measure defined as earnings excluding net finance costs, income tax charge, depreciation, and amortization. adjusted ebitda is a non-ifrs financial measure defined as ebitda adjusted to exclude the effect of non-recurring items, significant non-cash items, share-based payment expense and other items that our board of directors believes do not reflect the underlying performance of the business. adjusted ebitda margin is a non-ifrs measure defined as adjusted ebitda as a percentage of revenue. we believe ebitda, adjusted ebitda and adjusted ebitda margin are useful to our management as a measure of comparative operating performance from period to period as they remove the effect of items not directly resulting from our core operations including effects that are generated by differences in capital structure, depreciation, tax effects and non-recurring events. while we use ebitda, adjusted ebitda and adjusted ebitda margin as tools to enhance our understanding of certain aspects of our financial performance, we do not believe that ebitda, adjusted ebitda and adjusted ebitda margin are substitutes for, or superior to, the information provided by ifrs results. as such, the presentation of ebitda, adjusted ebitda and adjusted ebitda margin is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with ifrs. the primary limitations associated with the use of ebitda, adjusted ebitda and adjusted ebitda margin as compared to ifrs results are that ebitda, adjusted ebitda and adjusted ebitda margin as we define them may not be comparable to similarly titled measures used by other companies in our industry and that ebitda, adjusted ebitda and adjusted ebitda margin may exclude financial information that some investors may consider important in evaluating our performance. below is a reconciliation to ebitda and adjusted ebitda from net income for the period attributable to the equity holders as presented in the condensed consolidated statements of comprehensive income and for the period specified: three months ended december 31, change year ended december 31, change 2021 2020 $ % 2021 2020 $ % (in thousands usd, unaudited) (in thousands usd, unaudited) net income for the period attributable to the equity holders 867 8,541 (7,674) (90)% 12,453 15,151 (2,698) (18)% add back: net finance (income) costs (1) (688) 881 (1,569) (178)% (772) 379 (1,151) (304)% income tax charge (benefit) 444 (5,052) 5,496 (109)% (289) (4,399) 4,110 (93)% depreciation expense 52 33 19 58% 176 123 53 43% amortization expense 548 617 (69) (11)% 2,225 2,104 121 6% ebitda 1,223 5,020 (3,797) (76)% 13,793 13,358 435 3% share-based payments 529 371 158 43% 1,995 371 1,624 438% accounting and legal fees related to the offering (2) — 724 (724) n/m 963 724 239 33% employees’ bonuses related to the offering (2) — — — n/m 1,085 — 1,085 n/m acquisition related costs (3) 520 — 520 n/m 520 — 520 n/m costs related to lease termination — — — n/m — 155 (155) n/m adjusted ebitda 2,272 6,115 (3,843) (63)% 18,356 14,608 3,748 26% n/m = not meaningful below is the adjusted ebitda margin calculation for the period specified: three months ended december 31, change year ended december 31, change 2021 2020 $ % 2021 2020 $ % (in thousands usd, unaudited) (in thousands usd, unaudited) revenue 10,291 10,267 24 0% 42,323 27,980 14,343 51% adjusted ebitda 2,272 6,115 (3,843) (63)% 18,356 14,608 3,748 26% adjusted ebitda margin 22% 60% n/m (38)% 43% 52% n/m (9)% n/m = not meaningful in regard to forward looking non-ifrs guidance, we are not able to reconcile the forward looking non-ifrs adjusted ebitda measure to the closest corresponding ifrs measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items including, but not limited to, fair value movements, share-based payments for future awards, acquisition-related expenses and certain financing and tax items. free cash flow free cash flow is a non-ifrs financial measure defined as cash flow from operating activities less capital expenditures, or capex. we believe free cash flow is useful to our management as a measure of financial performance as it measures our ability to generate additional cash from our operations. while we use free cash flow as a tool to enhance our understanding of certain aspects of our financial performance, we do not believe that free cash flow is a substitute for, or superior to, the information provided by ifrs metrics. as such, the presentation of free cash flow is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with ifrs. the primary limitation associated with the use of free cash flow as compared to ifrs metrics is that free cash flow does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. free cash flow as we define it also may not be comparable to similarly titled measures used by other companies in the online gambling affiliate industry. below is a reconciliation to free cash flow from cash flows generated by operating activities as presented in the condensed consolidated statement of cash flows for the period specified: three months ended december 31, change year ended december 31, change 2021 2020 $ % 2021 2020 $ % (in thousands usd, unaudited) (in thousands usd, unaudited) cash flows generated by operating activities 1,177 3,593 (2,416) (67)% 13,997 10,894 3,103 28% capital expenditures (2,988) (60) (2,928) n/m (5,574) (90) (5,484) n/m free cash flow (1,811) 3,533 (5,344) (151)% 8,423 10,804 (2,381) (22)% n/m = not meaningful earnings per share below is a reconciliation of basic and diluted earnings per share as presented in the condensed consolidated statement of income for the period specified: three months ended december 31, year ended december 31, 2021 2020 2021 2020 (in thousands usd, except for share and per share data, unaudited) net income for the period attributable to the equity holders 867 8,541 12,453 15,151 weighted-average number of ordinary shares, basic 33,806,422 22,020,056 30,886,559 27,595,446 net income per share attributable to ordinary shareholders, basic 0.03 0.39 0.40 0.55 net income for the period attributable to the equity holders 867 8,541 12,453 15,151 weighted-average number of ordinary shares, diluted 36,712,375 24,446,668 33,746,536 30,879,550 net income per share attributable to ordinary shareholders, diluted 0.02 0.35 0.37 0.49
