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Better Collective A/S maintains confidence in achieving its upgraded full-year financial objectives, despite reporting flat EBITDA results during Q2 trading.
Publishing its Interim H1 2024 accounts, the Stockholm and Copenhagen joint-listed iGaming media group’s year-to-date revenues stand at €194m, up 17% on 2023 YTD comparatives of €166m.
Revenue growth was maintained by Better Collective, generating a 27% increase in Q2 income to €99m (Q2 2023: €78m), with leadership underscoring a contribution of €62m from recurring revenue streams.
As detailed, the KPI of strengthened recurring revenues underscores Better Collective’s prioritisation of its continued shift of media assets onto revenue share contracts, alongside new M&A assets contributing to new advertising revenues.
A breakdown of its network performance shows Better Collective’s publishing segment generated Q2 revenues of €71m, up 33% on 2023 results of €53m.
However, hindered by a lower operating margin of 28%, the publishing segment registered a 5% decrease in operating profits to €20m. The 5% decrease reflected Q2 trading matched against peak US comparatives, with new state launches and high CPA deals.
Period trading saw Better Collective’s Paid Media unit achieve a 14% increase in revenues to €28m, combined with an operating profits contribution of €8m (Q2 2023: €7.4m) – with results reflecting improved recurring income from existing media deals.
In North America, Better Collective generated revenues of €26m (Q2 2023: €22m), yet saw its operating profits decline to €1.9m, from €7.5m reported in 2023.
The decline is attributed to Better Collective transitioning US media deals and customers onto Rev-share or hybrid contracts, matched against peak CPA activity recorded by its US network during Q2 2023. Management underlines that the profit performance of its US network will be streamlined in H2.
The benefits and sustainability of the strategic shift are reflected in Better Collective’s European and Rest-of-World (RoW) network, which generated Q2 revenues of €73m (Q2 2023: €55m), combined with operating profits of €26m (Q2 2023: €21m).
As highlighted, the European and RoW network registered “revenue share income growth of 28%, and CPA growth of 42%. Furthermore, ‘Other’ revenues grew 42% due to the contribution from recent acquisitions with advertising revenues.”
CEO and Co-Founder Jesper Søgaard commented on Q2 results: “Our existing business is back to organic growth despite the exceptionally good performance during the first half of 2023.
“On the back of that, we have delivered a considerable increase in recurring revenue stemming from both organic and acquired growth, while continuing our North American transition to revenue share.”
Better Collective reported a flat Q2 EBITDA of €29m, with a 29% margin, mirroring exceptional performance last year and an expected limited near-term margin contribution from recent acquisitions of Playmaker Capital, AceOdds, and Playmaker HQ.
YTD EBITDA (before special items) stands at €57m, trailing €5m behind YTD 2023 results of €62m. Leadership underlined that EBITDA drags will be overcome in H2 by improved profit performance of paid partnerships, mitigating Google changes, US growth, and the margin contribution of new M&A assets.
Søgaard explained: “As it stands now, the net financial group impact has been fully mitigated. We managed to deliver on our forecasts for revenue, EBITDA, and NDCs, even before these changes took place.
“Hence, we remain on track to deliver on our financial targets, and our robust diversified strategy equips us to navigate through changing industry landscapes while remaining focused on sustainable profitable growth.”
The Group’s balance sheet detailed YTD costs at €137m, up from €104m, with Better Collective noting an increase in the cost base of €29m, directly related to acquisition costs.
Better Collective upholds its revised targets with projected revenue between €395 and €425m, indicating a growth of 21-30% (previously €390-420m), and an EBITDA of €130-€140m, reflecting a growth of 17-26% (previously €120-130m).
Entering H2, CEO Jesper Søgaard declared “full steam ahead.” He added, “We now look forward to the usual busy second half of the year with most major sports leagues being active.
Throughout our six years as a public company, we have consistently delivered on our promises. This is a proud tradition we intend to honour as we continue to seize sustainable growth opportunities.”
