Raketech upgrades guidance as 2022 goes ‘according to plan or better’

Raketech has put faith in its strategic objectives, updating its 2023 guidance figures to project revenue of between €60-65m and asserting that it will remain active in M&A.

The Nasdaq First North aming marketing technology group revealed this morning that revenue for the full year rose by 36.7% to €52.6 (2021: €38.5m), alongside an increase in reported EBITDA by 23.9% to €20m (€16.1m).

Income for the final quarter of the year, meanwhile, stood at €15.6m, up 32.5% from €11.8m in Q4 of 2021, whilst reported EBITDA reached €6.3m, a growth rate of 16% from €5.5m.

A US remedy for European difficulty

Geographically, the group has been able to find more success in markets outside its founding region of the Nordics, something which has been particularly bolstered by US operations.

Revenue from rest of world markets now accounts for 60% of group earnings, with US revenue rising by 56% to €2.3m (€1m). A specific breakdown saw Nordic revenue rise by 2.3% to €23.4m (€22.9m) for the full year and by 1.6% in Q4 to €6.5m (€6.4m).

On the other hand, the group’s performance in the rest of Europe fell by 18.6% from €3.2m in 2021 to €2.6m in 2022, and by 5.4% year-on-year in Q4 from €681,000 to €644,000 – a continuation of a trend observed in quarterly results last year.

European difficulties were offset to a large extent by the aforementioned performance in the US and in the rest of the world, however, with full year revenue from the former market rising 266.3% from €2.1m to €7.7m.

Quarterly US revenue in the final three months of the year also rose 149.3% to €2.4m (€980m), whilst rest of world revenue rose 83.7% for the full year to €18.4m (€10.2m) and 60% in Q4 to €6.1m (€3.8m).

Raketech Group CEO, Oskar Mühlbach, remarked: “During Q4, we were pleased to see that our US revenues more than doubled compared to last year and sports as a share of total increased from 22% to 27%, much thanks to the late 2021 US acquisitions and the FIFA World Cup respectively.

“The share of non-Nordic revenues during Q4 was close to 60%, thanks to added US revenues and continuous strong performance from rest of the world.”

All systems go across all verticals

On a product basis, Raketech’s betting tips and subscription income experienced the sharpest growth rate, rising by 709% from €777,000 to €6.2m for the full 12 months and 175% in Q4 from €675,000 to €1.8m.

Sports revenue increased 121.3% at year’s end to €15.2m (€6.9m) and 60% in Q4 to €4.2m (€2.6m), and 2022 casino income grew by 18.4% to €37.3m (€31.5m) and in the fourth quarter by 24.6% to €11.5m (€9.2m).

Lastly, affiliation marketing and sub-affiliation also experienced an uptick, the former by 21.9% for the full year and 16.2% in the final quarter to €32.2m (€28.9m) and €10.3m (€8.9m).

For sub-affiliation, full year revenue stood at €11.1m, increasing by 25.9% on Q4 2021 €8.8m and in the fourth quarter at €3.5m, up 53.7% on the previous year’s €2.3m.

“In summary I am very satisfied with our performance during Q4,” Mühlbach remarked. “Our core affiliation assets are performing according to plan or better, including those handed over to us after earn-out periods.”

Having achieved revenue growth across all geographic regions except the rest of Europe and across all product verticals, Mühlbach explained that Raketech has identified ‘three significant growth initiatives’ for 2023.

These are a targeting of ‘fewer but better consumer products’ as a success factor and competitive advantage, with a focus on popular products and established brands.

Secondly, Raketech believes that there is a ‘growing market’ for its AffiliationCloud due to increased demand for ‘smart infrastructure’ in affiliation services’, and finally sees ‘untapped growth opportunity’ for its US pickster assets. 

“These three growth initiatives, in combination with the ongoing global shift from offline to online gambling, puts us in a good position for continued expansion of our business,” the CEO added.

“We expect the core Affiliation Marketing segment to continue to deliver growth and EBITDA margins in line with, or above, the group’s previous financial targets.”

Looking ahead, Raketech has updated its guidance to ‘better reflect’ its ‘current business mi’, including the aforementioned target of  €60-65m in revenue. 

This sites alongside an EBITDA target in the range of €20-24m – including operational costs of €2m associated with taking over Casinofeber and Infinileads – and an increase in free cash flow to around €11-13m, including around €6m due to the two aforementioned integrations.

“We expect our already strong cash flow generation to increase even further going forward, closing the gap to EBITDA as the last earnouts come to an end within the next years,” Mühlbach concluded.

“This puts us in a situation where we can allow ourselves to continue to be active within the area of M&A, keep investing into organic growth while continuously also paying dividends to shareholders in line with current policy.

“With our diversified portfolio within Affiliation marketing, Sub-affiliation and Betting Tips & Subscriptions, we believe we are well-positioned to capture the many opportunities presented by the rapidly growing global digital gambling market.”