Growth in Q1 was driven by a rise in revenue from the core Publishing business at Better Collective. This is despite tough year-on-year comparisons in the US. Meanwhile, Paid Media revenue remained flat year-on-year, helped by the Skycon acquisition in April last year.
Better Collective also hailed its product diversification efforts within North America. While revenue in the region fell in Q1, it said this strategy is supporting longer-term growth plans in the market.
Add in the acquisition of sports betting media company AceOdds after the end of Q1, and Søgaard said there is plenty to be positive about. Incidentally, the AceOdds deal led Better Collective to increase its guidance for the full-year.
“In Q1, we saw good performance across all markets. Europe and Rest of World (RoW) showed outstanding performance with an impressive 20% growth of which 5.0% was organic,” Søgaard said. “This achievement was fuelled by a widespread impact across markets, facilitated by our owned and operated channels alongside strategic media partnerships.
“Turning attention to the North American market, we are delighted with the progress made in Q1. Our commercial position has never been stronger with active partnerships established across all major players in the region. We achieved notable successes during the North Carolina state launch and the Super Bowl events.”
Publishing growth pushes revenue up in Q1
Breaking down the Q1 performance, growth in the Publishing business was the main reason behind the overall revenue increase.
Publishing revenue, derived from proprietary owned and operated sports media and media partnerships, climbed 12.0% €66.3m. This increase came despite tough comparisons in the US where Q1 2023 included two states launches with upfront revenues through cost per acquisition (CPA)-based contracts. This year the state launch of North Carolina was based on a mix of revenue share and CPA.
Furthermore, Better Collective said segment revenue share income was hit by a lower-than-expected sports win margin. In addition, it noted more than 10.0% fewer football matches in major leagues across Europe and South America compared to 2023.
Turning to the Paid Media business, revenue here remained level at €28.7m. This segment draws revenue from paid advertising on search engines and advertising on third-party sports media.
This, Better Collective said, represents a solid performance by the business, seeing as it had similar high comparisons to the Publishing segment from last year.
Better Collective hopeful on North America despite revenue dip
Looking now at geographical performance, around 64.0% of all revenue came from Europe and RoW. Revenue here jumped 20.1% to €61.0m, despite fewer football matches and a lower sports win margin.
As for North America, revenue declined 8.4% to €34.0m. This, Better Collective said, was as impacted by an ongoing revenue share transition and the comparison from the two state launches in Q1 2023.
However, despite the decline, Søgaard said remains upbeat on longer-term growth prospects in the region.
“We increased our investment in revenue share, which will set us up well for sustained revenue in years to come,” he said. “The mix of new depositing customers (NDCs) on revenue share versus upfront CPA was similar as in previous quarters.
“Additionally, our expansion into high-level media has proven successful following last year’s acquisition of Playmaker HQ.” This purchase is not to be confused with Playmaker Capital, which the group also acquired in November last year.
On the subject of NDCs, group NDC figures in Q1 surpassed 450,000, with more than three-quarters sent on revenue share contracts.
Better Collective also noted that revenue share accounted for approximately 45.0% of total Q1 revenue. Some 31.0% came from CPA, 4.0% subscription sales and 20.0% other income.
Net profit slips as spending increases in Q1
Turning to spending, expenses were higher across the board during Q1. The main outgoing for Better Collective was staff costs at €28.7m, up 35.4% year-on-year. Other major areas of costs include revenue expenses (€27.9m) and external costs (€9.4m).
After also accounting for depreciation, amortisation and impairment, special items and net finance costs, this left a pre-tax profit of €10.3m, down 62.3%.
Better Collective paid €2.7m in tax, meaning it ended Q1 with a net profit of €7.6m, a drop of 62.0%. In addition, EBITDA declined 10.2% to €29.0m.
Reasons for optimism
As noted, last week’s €42.0m acquisition of AceOdds saw Better Collective raise guidance for its full-year. AceOdds was founded in 2008 and, based in the UK, offers betting tools, reviews, odds and streaming programmes.
FY24 revenue is now expected to fall between €395.0m and €425.0m. This is higher than the initial guidance of €390.0m to €420.0m. In addition, EBITDA before special items is set to be between €130.0m and €140.0m, compared to €125.0m to €135.0m.
“I would like to round off by thanking all my colleagues at Better Collective, now also including the full Playmaker Capital group,” Søgaard said.
“As a co-founder it is a true pleasure being surrounded by so many ambitious colleagues that have taken ownership of our strategy and vision and continue to deliver strong results.”
Original article: https://igamingbusiness.com/finance/quarterly-results/better-collective-ceo-hails-strong-q1/
