Gambling.com cuts 25% as it shifts to AI-first model

Gambling.com Group cut 25% of its workforce after reporting Q1 2026 net revenue of $40.44 million, slightly above analyst estimates. Adjusted EBITDA declined 43.4% year over year to $9.0 million, and adjusted EPS fell to $0.09 from $0.46 a year earlier.

The company attributed the margin decline-adjusted EBITDA margin narrowed to about 22% from roughly 39%—to higher cost of sales, increased marketing spend to scale non-SEO channels, and volatility from Google search algorithm updates. Sports Data Services revenue rose 13% while legacy marketing revenue declined about 5%.

Incoming CEO Kevin McCrystle described the cuts as part of a transition to an AI-first operating model intended to lower costs and change the traffic mix from organic SEO toward AI-powered and paid channels. Management expects the reductions to generate $13 million in annualized savings, with roughly half realized in the second half of 2026. One-time restructuring costs are estimated at about $2.5 million, CFO Elias Mark added.

The company trimmed full-year 2026 guidance to $165 million–$170 million in revenue, down from $170 million–$180 million, and narrowed adjusted EBITDA guidance to $45 million–$50 million from $50 million–$58 million. Leadership cited traffic diversification costs, regulatory developments in Finland and tax increases in the U.K. and Ireland as factors behind the revisions, and expects sequential revenue and adjusted EBITDA growth in the second half as restructuring savings take effect.

McCrystle said about 80% of new engineering code across the business is generated by AI. Gambling.com is integrating with AI platforms including Anthropic’s Claude and Perplexity. The OpticOdds product has an integration with Claude, and the company has partnered with Perplexity to supply odds data across that platform.

Analysts pressed management on execution risk and the potential impact of cutting a quarter of staff. Jeffrey Stantial of Stifel asked how delivery would be affected; Mark and McCrystle reassured investors that output and quality would be maintained and that AI integrations would help offset lost human capacity.

Shares fell about 28% after hours to $2.97. Management pointed to growth in recurring revenue, which now accounts for 49% of total revenue, while regulatory and tax headwinds and changes to search traffic remain near-term challenges as the company implements the restructuring.