Kindred has “great confidence” in new US proprietary tech platform amid early gains

Kindred Group interim CEO Nils Andén has hailed the “really strong significant improvements” to the operator’s US business following the transition to new proprietary technology in New Jersey and Pennsylvania.

Andén was speaking as part of the Stockholm-listed operator’s Q2 financial report, with Kindred reporting a 17% year-on-year (YOY) increase in its revenue from the North American market, which hit $10.8m (£8.4m)in the quarter.

Kindred reduced its underlying EBITDA losses from the market by 31% YOY, from a negative $9.5m (£7.4m) in Q2 2022 to a negative figure of $6.6m (£5.1m) just 12 months later, attributing this reduction to strong cost control over the intervening period.

During the quarter, Kindred launched its new proprietary technology platform in New Jersey, transitioning its operations in the state over to its in-house developed tech stack, a crucial part of the firm’s plans to reduce its operational costs.

Post quarter, the operator followed this up with a transition in Pennsylvania, with the firm keen to concentrate its efforts on so-called ‘multi-product’ states in the US, where both igaming and sports betting are legal.

In Kindred’s results presentation, Andén hailed the new platform, ascribing his “great confidence” in it following early gains in the New Jersey market.

“We strongly believe that the Kindred platform is the best in the business,” the interim CEO said.

“We are very keen to bring that to all the customers we have in all markets and brands. In Q2 we launched the platform in New Jersey and in the beginning of Q3, we launched it in Pennsylvania.” 

Expanding on specific areas of improvement, Andén continued: “We’ve seen some really strong significant improvements in retention and conversion numbers for our New Jersey business on the back of the platform migration.

“We have seen a daily average crosswind go up by almost two times and similarly the conversion rates from registration to new depositing players have almost doubled. This is really bringing us great confidence in our platform,” he concluded.

Andén sounded a note of caution on the potential for further cost reductions going into the traditionally busy period, with Q2 marketing expenses of $4.5m set to increase in the more sporting-event-packed H2 period.

“If we look forward to the second half of the year, we do see that some of these losses will increase as the weighting of the partnerships and sponsorships we have in North America are focused on the second half of the year when the American football season is active,” he explained.

However, the Kindred interim CEO suggested that if the early gains in New Jersey and Pennsylvania continued, then the group would consider increasing its investment in the US over international investment should it prove to be more profitable.

“As we scale our investments, we’re not going from zero to 100 overnight, anywhere we operate, but we do it in a very sort of consistent fashion to ensure we have really good fundamental unit economics,” Andén explained.

“Irrespective of the market we’re in, if we see really good unit economics, we increase investments and it’s the same for North America as it is for Denmark or the Netherlands,” he concluded.