Affiliate and network business Raketech has reported a 39.9% year-on-year drop in revenue to €12.9 million and of adjusted EBITDA by 45% to €3.1 million for the third quarter of 2024.
CEO Johan Svenssson warned that it will now be “difficult” to reach the lower end of its previously issued full-year guidance in the range of €17-19 million.
Svensson blamed tough prior year comparatives and lower sales across the board, with revenues from the core, higher-margin affiliation marketing segment down 28%.
Revenues from the SubAffiliation area dipped 51% largely due to “external factors beyond our immediate control”, said Svensson, as publishers within Raketech Network continued to battle Google-related headwinds.
Within the core affiliation segment, Swedish returns were hit by the July 2024 hike in operator gaming taxes from 18% to 22% of GGR, while the affiliate group added that it had “not yet seen any sustained recovery" from its prized Japanese-facing Casumba assets.
Raketech also informed investors it had taken steps to “strengthen the organization working with the Casumba assets where the founders remain in strategic roles”.
The Nasdaq Stockholm-listed group also reported cost savings of18% in the quarter vs.1Q24 arising from an ongoing review of its operating model which saw it divest its US betting tips advisory business.
It had also seen a “sequential improvement” into November 2024 with adjusted EBITDA for Q4 on track to come out marginally ahead of Q3 2024, with the performance of Raketech Network also stabilising.
“Our relationships with operators and publishers remain strong and mutually beneficial, with both parties continuing to value our services and post-quarter revenue trends indicate some improvement in Q4”, said Svensson.
Post-quarter highlights included a strategic partnership signed with the founders of its slots portfolio designed to drive growth across Southern Europe and LatAm, as well as a new agreement with a large US operator via its AffiliationCloud SaaS platform overseeing their tier 2 and tier 3 affiliates.
Svensson said this provided “a strong reference point for our future ambitions in the US market” as well as for its proprietary SaaS platform AffiliationCloud, which continued to expand during a challenging Q3.
Its free cash flow position of €3.8 million would in combination with the proceeds from a new share issue enable Raketech to meet an upcoming Casumba earnout commitment of €9.9 million. The business has until September 2026 to settle the remaining €20.6 million of the total consideration of €46.5 million due to the founders under an uncapped earnout deal agreed in 2019.