- COMPANY RESULTS
Raketech announced in its Q2 report that revenue was up from 2023 and that its sub-affiliation revenue performed better than that from affiliate marketing.
Total revenue decreased by 3.7% year-on-year from €17.6m (£15.1m/$19.4m) down to €17m, while adjusted EBITDA dropped by 20.3% from the same period in 2023 to €4.37m.
Across different regions, Raketech recorded a 2.5% revenue drop from the Nordics down to €7.03m, a 52.3% rise from the rest of Europe revenue, a 14.4% increase from the US and a 12.4% decline in revenue from the rest of the world.
Modest decline
The affiliate cited the lower performance of its Casumba assets along with a “modest decline” for Swedish casino assets for the drop in EBITDA. Raketech completed its Casumba earnout at the end of July and has kept its existing core team in place.
Back in July, Raketech reached an agreement to sell off its non-core US advisory business ATC Consultants for $2.25m. The sale resulted in a one-off non-cash impairment charge of €10.5m for the assets, which contributed to its operating profit of just €1.6m for the quarter.
The company launched a business audit with the end of the Google updates earlier this year that caused issues for organic search results for affiliates. This led to several initiatives around audience-based content, technical product improvements, SEO optimization and user experience.
Affiliate marketing took a tumble of 25.9% year-on-year down to €7.65m and sat at 45.1% of the group’s total revenue for the quarter. While casino activities also decreased by 5% to €13.54m as sport grew by 2% from 2023 to €3.42m.
Network growth
Both Raketech Network and AffiliationCloud delivered year-on-year organic growth with sub-affiliation increasing revenue by 29.7% to €8.16m. Yet, the affiliate noted that Raketech Network’s growth slowed a bit due to operational challenges for some of its publishers. The company also launched its sub-affiliation in the US during the quarter.
AffiliationCloud experienced steady, organic, growth during Q2 helped by the exclusive deal with Spelklubbem. The deal meant all affiliates who want to promote the brand have to go through the AffiliationCloud network. Raketech confirmed that discussions are underway with other operators about similar partnerships.
The company plans to increase its CRM activities by leveraging high direct traffic products to maximise opportunities and enhance lifetime value in Q3.
Financial flexibility
Considering its performance so far this year, Raketech CEO Johan Svensson, said that it is able to specify the full year guidance to “further specify the full year guidance of around €20m to a range of €17m to €19m in adjusted EBITDA.”
“Free cash flow before earnouts is estimated to come in just below EBITDA. Our current cash flow gives us financial flexibility to settle the current Casumba earnout and ensure long-term growth and value creation.”