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  • Q1 2024: Better Collective shares drop amid 13% EBITDA decline
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Shares in Better Collective were trading lower this morning (22 May) after the affiliate reported a 13% year-on-year EBITDA decline for Q1 2024.

Topline numbers

Better Collective generated an 8% year-on-year revenue increase to €95m during the quarter.

Recurring revenue of €53m represented growth of 14%, but organic revenue declined by 6% over the same period.

The affiliate said this growth was achieved despite challenging comparisons to the previous year, which saw the launch of online sports betting in two major US states.

These launches operated on a CPA-based model, generating significant upfront revenues. In Q1 2024, Better Collective’s launch in North Carolina combined recurring revenue share and CPA.

Moreover, the sports win margin in Q1 was lower compared to last year, and core markets in Europe and South America experienced a reduction of over 10% in the number of major league soccer games.

EBITDA before special items reached €29m, down 13% year-on-year, corresponding to an EBITDA margin of 31%.

This decline was attributed to the short-term margin dilution from recent acquisitions of Playmaker Capital and Playmaker HQ.

CEO commentary

Better Collective co-founder and CEO Jesper Søgaard described Q1 as a “good start to 2024,” emphasising a strong focus on further business diversification to future-proof revenues.

He highlighted the successful integration of Playmaker Capital, Better Collective’s second-largest acquisition, noting encouraging early performance marketing results.

However, he pointed out that Playmaker Capital’s advertising business sees its lowest season in Q1.

Performance is expected to improve over the year, with the strongest results anticipated in Q4.

Søgaard also noted the positive impact of the company’s dual listing in Copenhagen, which significantly increased interest from investors, market analysts, and media.

This heightened interest enabled Better Collective to raise €145m in new capital during Q1 and attract BLS Capital Fondsmæglerselskab A/S, which now holds 11.7% of Better Collective’s voting rights.

Søgaard described these developments as “very encouraging for executing our future strategy and continued focus on M&A.”

Current trading & outlook

Following the acquisition of AceOdds in mid-May, Better Collective updated its 2024 financial targets.

The company now projects revenue between €395m and €425m, representing 21% to 30% year-on-year growth, up from the previous forecast of €390m to €420m.

EBITDA before special items is expected to be between €130m and €140m, reflecting 17% to 26% growth.

The long-term 2027 EBITDA margin target was updated to 35-40% following the Playmaker Capital acquisition and remains unchanged following the purchase of AceOdds.

Investors were rather disappointed with Better Collective’s Q1 results, with shares in the business dropping more than 13% in early trading.

CEO Søgaard, however, remained optimistic.

“We anticipate that the European Championship will be a significant sporting event for our group, positively contributing to growth.

“Due to our limited experience with Copa America, we take a more cautious approach here, although we acknowledge the tournament’s interest and relevance,” he said.

The affiliate business also noted a positive impact from Google’s new policy focusing on third-party content across a variety of commercial categories, which took effect in May.

Some of Better Collective’s owned and operated sports media portfolios have since seen an increase in traffic and rankings.

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