- COMPANY RESULTS
Better Collective has announced revenue growth of 8% in Q3 thanks to M&A but suffered organic growth decline amid large cuts to its full-year estimates and its staff.
The company posted a revenue of €81 million (£67.4 million / $85.4 million), still up from 2023’s €75 million and a recurring revenue growth of 14% year-on-year to €53 million. EBITDA also rose by 14% from €20 million to €22 million from last year, while new depositing customers fell by 11% to 396,000.
Jesper Søgaard in his remarks admitted that Better Collective parted ways with over 300 employees post Q3, which represented around 15% of the entire workforce. Back in October, the Better Collective CEO confirmed that the company would make €50 million in cuts and lower the full-year estimations for revenue to around €355-375 million and EBITDA to fall between €100-110 million.
"The recent changes leave Better Collective a leaner organisation, poised to attack future opportunities and challenges head-on," said Søgaard on the layoffs and financial cuts.
The CEO also said regarding the tactical adjustments that the company strategically safeguarded direct costs associated with its paid media and media partnerships businesses and that there are no plans to change the business model.
“I have been asked whether the changes we have encountered represent a structural shift to our business model. I want to assure you that it does not,” said Søgaard.
“We operate in the sports media and sports betting industries which are sectors with bright futures and significant growth potential. In an expanding, growing and competitive industry, sportsbooks and other partners will continue to seek growth in new and existing markets through customer acquisition and brand awareness.
“I remain certain that our unique products and offerings will remain a central part of our partners' pursuit for growth in the future, just as it has been the case over the past 20 years.”
Publishing & Paid media declines
Revenue for Better Collective’s publishing arm grew by 16% in the quarter up to €56.4 million, with 20% growth for the year-to-date. However, organic growth for publishing declined by 5% with the main growth coming from M&A activity, notably the Playmaker Capital and Playmaker HQ purchases. Publishing accounted for 69% of the group’s revenues and 73% of its operating profit.
The organic decline stemmed from the reduced activity by Better Collective’s partners in the US and a slowdown in the Brazilian market ahead of an expected regulation in January 2025.
Paid media revenue came in for Q3 at €24.8 million, 8% down year-on-year, alongside a 9% drop in organic growth. The declines are expressed through lower-than-expected CPA revenue from the US and reduced revenue share in Brazil. In total, revenue share income grew by 10% to €12 million, while CPA revenues fell by 18%.
Europe holding down the fort
Better Collective’s financials for Europe and the rest of the world brought in €62.2 million in the period, marking a 15% growth from 2023 and helping to push year-to-date 23% up as well. The regions were responsible for 77% of group revenue in Q3.
While the company’s North American operations as previously mentioned suffered culminating in a 12% drop year-on-year in revenue to €19 million and making up only 23% of group revenue. Organic growth in the region fell by 24% with revenue share dropped to €4 million and CPA down to €5 million.
A brighter future
The affiliate also expressed that it calculates a further €120 million remains on the table in the North American market following an accumulated customer lifetime value analysis amidst its recent strategic shift.
In his closing remarks, Søgaard stated that he remains optimistic that the strategy shift will lead the company to a stronger foundation, where it can return to the negotiating table to continue its expansion.
“Related to returning to growth, our long-term financial guidance remains intact, implying strong growth ahead, including M&A when the timing is right.”
The CEO ended by thanking his colleagues, investors, partners and stakeholders for their support in a challenging moment for the company as it seeks to move on.