Better Collective A/S remains optimistic about achieving its upgraded annual financial goals despite no changes in EBITDA in the Q2.
In its interim report for the H1 of 2024, the iGaming media group, registered in Stockholm and Copenhagen, announced that its total revenue for the year so far reached €194 million ($209.5 million), which is a 17% increase compared to the same period last year (€166 million/$179.2 million).
Better Collective achieved revenue growth by increasing income by 27% in the Q2 to €99 million ($106.9 million) compared to €78 million ($84.2 million) in the second quarter of 2023, with management noting a contribution of €62 million ($66.9 million) from recurring revenue sources.
As stated, the KPI for recurring revenue growth underscores Better Collective’s priority in transitioning media assets to revenue-sharing contracts and integrating new assets acquired through M&A, which contributes to increased advertising revenue.
Network metrics analysis shows that Better Collective’s publishing segment brought in €71 million ($76.6 million) in the second quarter, a 33% increase compared to €53 million ($57.2 million) in 2023.
However, due to a decrease in operating margin to 28%, the operating profit of the publishing segment declined by 5% to €20 million ($21.6 million). This 5% decrease is attributed to second-quarter activity aligning with peak performance in the US, new project launches in the states, and high CPA deals.
In Q2 2024, Better Collective’s paid media division increased revenue by 14%, reaching €28 million ($30.2 million), and improved operating profit to €8 million ($8.6 million) compared to €7.4 million ($7.99 million) in Q2 2023.
In North America, revenue amounted to €26 million ($28.8 million) compared to €22 million ($23.7 million) in Q2 2023. However, operating profit decreased to €1.9 million ($2.05 million) from €7.5 million ($8.1 million) in 2023 due to the transition to Rev-share or hybrid contracts, linked to peak CPA activity in the network. Profitability in the US is expected to improve in the second half of the year.
The benefits and stability of the strategic shift are evident in Better Collective’s European and Rest of World (RoW) network, which generated revenue of €73 million ($78.8 million) in Q2 (compared to €55 million/$59.4 million in Q2 2023) and operating profit of €26 million ($29.08 million) (compared to €21 million/$22.7 million in Q2 2023).
It was noted that in these regions, the network recorded a 28% increase in revenue share and a 42% rise in CPA. Additionally, “other” revenues grew by 42% due to recent acquisitions and advertising revenue.
Jesper Søgaard, CEO and co-founder of the group, commented on the 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 stable EBITDA of €29 million ($31.3 million) for the second quarter, with a margin of 29%, reflecting last year’s exceptional results and the expected limited short-term margin contribution from recent acquisitions of Playmaker Capital, AceOdds, and Playmaker HQ.
The EBITDA for the entire period (excluding special items) is €57 million ($61.5 million), which is €5 million ($5.4 million) less than the €62 million ($66.9 million) reported for the same period in 2023. Management emphasized that EBITDA challenges will be addressed in the second half of the year through improved performance of paid partnerships, mitigation of Google changes, growth in the US, and margin contributions from 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.”
From the beginning of the year, the Group’s expenses amounted to €137 million ($148.6 million) compared to €104 million ($112 million) last year. Better Collective reported an increase in costs of €29 million ($31.3 million), attributed to acquisition expenses.
The company continues to adhere to its revised forecasts, expecting revenue between €395 and €425 million ($426 to $459 million), indicating growth of 21–30% (previously €390–€420 million / $421–$454 million), and EBITDA between €130 and €140 million ($141 to $152 million), reflecting growth of 17–26% (previously €120–€130 million / $129–$141 million).
At the beginning of the H2 of the year, CEO Jesper Sørgaard stated: “Full steam ahead.” He added that the company eagerly anticipates an active second half of the year, with most major sports leagues in full swing.
“Since going public six years ago, we have consistently delivered on our promises. This is a proud tradition that we intend to uphold, continuing to seize opportunities for sustainable growth.”
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