- COMPANY RESULTS
Better Collective reported a mostly positive end to 2024 in the last quarter with revenue of €96 million (£79.5 million/$100.3 million), but a large hit expected in Brazil and slow organic growth has caused a short-term shift in strategy.
The affiliate’s end to the year helped to push its revenue for 2024 up 14% from 2023, while organic growth was still negative with a drop of 2% year-on-year.
Recurring revenue was also increased in Q4 by 28% year-on-year to €63 million with a full-year up by 14% with a result of €231 million. EBITDA before special items also rose by 14% to €34 million with a margin of 35% in Q4, with the full-year metric up by 2% to €113 million with a 31% margin.
Better Collective CEO Jesper Søgaard reaffirmed that despite the company’s short-term challenges it remains “uniquely positioned at the forefront of the global sports media and betting media landscape”.
“Our diversified portfolio of leading brands, combined with strong financial discipline and a commitment to innovation, positions us well for sustained growth.”
He also confirmed that while M&A has previously been a key driver for the company, it will “shift toward driving organic growth and safeguarding the robust cash flow of the business to bring down debt and buy back own shares.”
Brazil slowdown
Better Collective is the latest affiliate to have acknowledged struggles following the regulation of the igaming market in Brazil on 1 January 2025. The affiliate recorded €70 million of revenue from the market in 2024, which made up 19% of the group’s revenue and most of this from revenue share agreements.
The company noted that the local GGR tax and added costs on net gaming revenue, currently estimated at 26%, are expected to affect 2025 revenue by €15-20 million. While the fact that all players in Brazil are required to re-active their accounts will further negatively impact the market costing Better Collective another €20-30 million in 2025.
The affiliate expects Brazil to return to growth by 2026 and become a “highly profitable and high growth market for the group in the mid-to-long term, which will outweigh the short-term impact”.
Mixed Q4
In the last quarter of 2024, Better Collective largely posted positive results including its revenue and EBITDA metrics. Its profit before tax came in at €16.4 million, an increase from 2023’s €13.7 million in the same period, while its earnings per share was up by €0.1 year-on-year.
However, in addition to the negative organic growth metric the affiliate’s operating profit before depreciation and amortisation had dropped by 13% to €26.1 million from the previous year’s €29.9 million. Cash flow was also reduced to €19.7 million from 2023’s €37.5 million in Q4.
Better Collective delivered 407,000 new depositing customers (NDCs) during Q424, of which 82% were on revenue share contracts. This number was down 15% year-on-year and was mainly due to the slowdown in the Brazilian market.
Back in October 2024, Søgaard announced that the company would make €50 million in cuts and lowered the full-year estimations, which resulted in over 300 employees being let go.
Publishing up by 20%
The super affiliate recorded growth in its publishing operations by 20% during the final quarter which took its revenue up to €70.9 million. It matched the growth across the full year to earn €264.7 million from publishing activities, up from 2023’s €220.3 million.
Better Collective listed the growth in revenue share as due to acquisitions, despite being negatively impacted by the Brazilian and US markets. CPA was down and driven also by the US market mainly.
Publishing made up 74% of group revenue in Q4 compared to 2023’s 69%, while across the whole year, the activities were responsible for 71% of revenue, up by 4% year-on-year.
Paid media however took a 3% dip in revenue during the quarter from 2023 with €25.3 million, while there was no movement across the whole year on paid media revenue from the previous result. Naturally, the share of group revenue dropped to match the metrics of publishing listed above to account for 26% of Q4 revenue and 29% in 2024 in full.
Growth across the globe
Revenue for Better Collective’s Europe and the rest of the world operations rose by 16% in Q4 to €67.6 million and was up by 21% in the full year to €264.1 million. These markets represented 70% of group revenue in the quarter and 71% for 2024 in total.
Revenue share income was also increased by 15% to €42 million, while CPA held flat at €12 million and was again impacted by the slowdown in Brazil. The CMP revenue grew by 84% to €6 million and was driven by the acquisition of Playmaker Capital.
North American revenue increased by 6% in Q4 to €28.6 million from 2023’s €27.1 million with a negative organic decline of 8%. The affiliate also suffered a negative 1% drop in its revenue in the region for the full year down to €107.3 million.
Søgaard admitted that despite a strong start to 2024 in the US with the launch in North Carolina, it faced lower-than-expected activity leading into the NFL season. “The US market’s dynamics, dominated by few sportsbooks, highlighted the importance of active challengers,” the CEO said. “Many challenger brands shifted focus away from the US, reducing competitive pressure as well as lowering marketing spending by market leaders.”
2025 targets
The affiliate expects to reach revenue between €320-350 million during 2025 alongside EBITDA between €100-120 million. It also has a target to bring the free cash flow range to €55-75 million and net debt to EBITDA below 3.