Home Finance Better Collective CEO hails a strong first quarter as revenues rise 8.1%

Better Collective CEO hails a strong first quarter as revenues rise 8.1%

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Better Collective’s co-founder Jesper Sogaard, CEO of the group and its affiliates, has praised their “strong” Q1 performance. Revenues increased by 8.1% on a year-over-year basis to EUR95.0m ($103.1m/PS81.1m).

The growth in the first quarter was driven by an increase in revenues from Better Collective’s core Publishing division. The growth in Q1 was driven by a rise in revenue from the core Publishing business at Better Collective, despite difficult year-on-year comparations. Paid Media revenues remained unchanged year-over-year thanks to the Skycon purchase in April of last year.

Better Collective praised its efforts to diversify products in North America. Although revenue fell in the first quarter, the company said that this strategy supports the longer-term plans for growth in the market.

Sogaard says there are many reasons to feel positive, including the recent acquisition of the sports betting media firm AceOdds at the end of the first quarter. In fact, Better Collective’s guidance was increased for the year due to the AceOdds acquisition.

In Q1, all our markets performed well. Europe and Rest of World showed an outstanding performance, with a 20% increase of which 5,0% were organic,” Sogaard stated. This achievement was fueled by the widespread impact in markets that our channels, both owned and operated by us as well as strategic media partnership have had.

We are pleased with our progress in the first quarter of the North American Market. We have never had a stronger commercial position with the active partnerships formed across major players of the region. “We achieved significant success during the North Carolina State Launch and Super Bowl Events.”

Revenues increase in Q1 due to publishing growth

The main driver of the revenue growth was the publishing business.

The publishing revenue derived by proprietary media owned and operated and from media partnerships has increased 12.0% to EUR66.3m. The increase was achieved despite the fact that Q1 2023 saw two state launches in which upfront revenue came from cost-per acquisition contracts. The state launch in North Carolina this year was based on both revenue sharing and CPA.

Better Collective also said that segment revenue shares were affected by lower than expected sports win margins. It also noted that there were more than 10,0% less football games in the major leagues of Europe and South America by 2023.

The revenue in the Paid Media segment remained flat at EUR28,7m. The segment generates revenue through paid search engine advertising and third-party advertising in sports media.

Better Collective stated that this is a good performance for the company, as the Publishing segment had a similar comparison to last year.

Better Collective hopeful on North America despite revenue dip

Examining the geographical breakdown, we can see that 64.0% all revenues came from Europe or RoW. The revenue here increased by 20.1%, to EUR61.0m despite less football matches and lower sports winning margins.

North America saw a revenue decline of 8.4%, to EUR34.0m. Better Collective stated that this was due to the ongoing transition of revenue sharing and the comparison between the Q1 launches for the two states in 2023.

Sogaard, however, said that despite this decline, she remains optimistic about the longer-term prospects for growth in the area.

He said, “We have increased our revenue-sharing investment. This will help us to generate revenue for years to come.” The mix of NDCs on revenue sharing versus CPA upfront was the same as previous quarters.

The group’s expansion into high level media following the acquisition of Playmaker HQ last November has proved successful. This is not to confuse with Playmaker Capital which it also purchased in November.

In Q1, the number of NDCs in a group exceeded 450,000. More than three quarters were sent under revenue-sharing contracts.

Better Collective reported that the revenue sharing accounted for about 45.0% (or more) of its total revenue in Q1. CPA accounted for 31.0% of revenue, followed by subscription sales at 4.0% and other sources accounting for 20.0%.

Spending increases Q1 and reduces net profit

Spending was up across the board in Q1. Staff costs were the main expense for Better Collective, at EUR28.7m. This is up by 35.4% on an annual basis. Revenue expenses (EUR27.9m), and external costs (9.4m) are also major cost areas.

This left an after-tax profit (before depreciation and amortisation, as well as special items, and net financing costs) of EUR10,3m. That’s a drop of 62.3%.

Better Collective had to pay EUR2.7m tax. This meant that it finished Q1 with an overall net loss of EUR7.6m. That’s a decline of 62.0%. EBITDA also fell 10.2%, to EUR29.0m.

There are many reasons to be optimistic

Better Collective raised its guidance for the full year following last week’s EUR42,0m purchase of AceOdds. AceOdds, founded in 2008, is a UK-based company that offers betting tools and odds, as well as reviews and other services.

The revenue for FY24 is expected to be between EUR395.0m – EUR425.0m. The initial forecast of EUR390.0m-EUR420.0m has been exceeded. EBITDA is also expected to range between EUR130.0m to EUR140.0m – compared with EUR125.0m – EUR135.0m.

Sogaard concluded by saying, “I’d like to thank all of my colleagues from Better Collective and Playmaker Capital.

As a founder, it’s an honor to be surrounded by such ambitious coworkers who have embraced our vision and strategy. They continue to produce strong results.

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