Better Collective A/S continues to navigate adjustments in the US and Brazilian markets, as leadership introduces its 2027 sustainability target to restore the business to organic growth.
The Stockholm and Copenhagen dual-listed media group cited improved year-end trading, following a challenging 2024, in which the company failed to meet its market guidance for the first time since 2017.
Under revised guidance, Q4 trading saw Better Collective record corporate revenues of €96m ($102.72m) , up 13% YoY, compared to €85m ($90.95m) in Q4 2023. The company also reported a stronger contribution from recurring revenues, which increased to €65m ($69.55m), making up 65% of total group revenue.
For the full-year 2024, revenue reached €371m ($396,97 m), up 14% YoY, but fell short of the original FY2025 forecast of +€395m ($421,65m). However, improved year-end trading helped Better Collective achieve its revised EBITDA guidance of €34m ($36.38m) (Q4 2024: €29m, $31,03m), aided by the company’s cost-efficiency programme being implemented faster than expected.
Initiated in October 2024, the cost-efficiency programme delivered a partial effect of €10m ($10.6m) in Q4 2024, alongside one-off savings of €5m ($5.3m) from bonuses and other reductions, improving EBITDA by €15m ($15,9m). Leadership remains committed to achieving annualised cost savings of €50m ($53.2m) in 2025.
For the full year, Better Collective reported EBITDA before special items of €106m ($112,6m) (0% growth YoY)—in line with its revised forecast of +€100m ($105.3m) but below the original projection of +€130m ($137,9 m).
CEO and co-founder Jesper Søgaard described 2024 as a year of” unexpected challenges, shaped by significant external headwinds. While the first half of 2024 delivered strong results, difficulties emerged in May with Google’s Policy Update, which negatively impacted Better Collective’s Media Partnership business.”
Further setbacks arose from Better Collective revising the earn-out settlement for its €55m ($58,3 m) acquisition of Playmaker HQ (finalised in November 2023), based on the “under-performance of the asset” and “creating some market uncertainty” related to the M&A growth strategy.
Brazil hits hard on liabilities
Despite generating €70m ($74,9m) in revenue from Brazil in 2024 (circa 19% of total group revenue), the market outlook remains uncertain due to multiple regulatory liabilities.
Brazilian liabilities include a 26% GGR tax charge, which is expected to have a negative revenue outcome in the range of €15-20m. ($16,05m-$21,4m). In addition, a negative churn is expected from rules related to user reactivations, which will impact partnership performance, in which Better Collective anticipates a €20-30m ($21,4m-$32,1m) reduction in revenue share income.
Moving into 2025, Better Collective maintains a commitment in which it has built an HQ of 100 localised staff, but noted that Brazilian adjustments would bear an overall negative on revenue and EBITDA estimated between €35-50m ($37,45m-$53,5m).
US streamline takes shape
Q4 2024 trading saw Better Collective increase its North American revenue by 6% to €29m ($31,03m), contributing 30% of total group revenue. However, organic growth declined by 8%, primarily due to reduced marketing activity from sportsbook partners.
For FY2024, North American revenue declined 1% YoY to €107m ($114,49m) , with organic growth down 18% due to sportsbooks cutting marketing investments. This shift resulted in a 45% increase in revenue share income but a sharp decline in CPA revenue, leading to a 45% YoY drop in operating profits to €17m ($18,19m).
In response, Better Collective implemented cost-saving measures and streamlined its North American operations. The company remains optimistic about its 2025 outlook, aiming for a minimum 20% EBITDA margin and a 35%+ margin including revenue share growth.
2025 Targets for stability in 2027
Closing year accounts , Better Collective set its 2025 corporate guidance of achieving a revenue range of €320-350m ($342,4m-$374,5m) and EBITDA before special items: €100-120m ($107m-$128,4m). Financial KPIs will reflect a free cash flow of €55-75m ($58,85m-$80,25m) and Net debt to EBITDA ratio of below 3x.
The guidance factors in an expected 50-70% decline in Brazilian revenue share income, impacting EBITDA for 2025 by €35-50m ($37,45m-$53,5m).
For the long term, Better Collective has renewed its 2027 guidance, targeting a return to organic growth from 2026, maintaining EBITDA margins before special items at 35-40%, excluding M&A actions.
CEO Jesper Søgaard reflected on the company’s strategic position, stating:”In just a few years, Brazil and the US have emerged as key growth drivers, now representing over half of our 2024 group revenues. We have strategically leveraged both organic and inorganic growth to secure leading positions in these markets.
Despite the unforeseen challenges in the second half of 2024, we remain confident in the long-term potential. I am pleased with the growth we achieved in Europe, Canada, and South America, as well as our advancements in esports. As we move into 2025, our focus will be on commercial execution, business development, and capital allocation. With our exceptional team and our leading House of Brands, we are well-positioned to seize the many opportunities ahead.”
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