Q3 2023: Better Collective hails US revenue share transition
Group EBITDA before special items stood at €20m, marking year-on-year growth of 35%.
The EBITDA margin before special items was 26%.
“In Q3 we saw continued strong performance across the group working towards sustainable future growth for Better Collective,” said co-founder and CEO Jesper Søgaard.
“I am especially pleased to see that the transition into recurring revenue with our North American partners is moving faster than expected, which will provide strong value in the long run,” he added.
However, investors were not fully convinced of Better Collective’s performance, leading to a nearly 13% drop in the stock during the early hours of trading.
New depositing customers (NDC) increased by 27% year-on-year to 445,000.
Of these NDCs, 87% subscribed to revenue share contracts.
Better Collective said the shift to revenue share contracts in North America has progressed faster than anticipated.
In the US, Better Collective saw approximately 65,000 NDCs during Q3, up 73% on Q3 2022.
Among these, 64% opted for revenue share agreements, totalling 42,000 NDCs, translating to a 159% growth.
Søgaard emphasised the group’s concerted effort toward transitioning partners to revenue share agreements in North America since the repeal of PASPA in 2018, aligning with the model used across the rest of the group’s operations worldwide.
“We favour revenue share as this model puts us in the same boat as our partnering sportsbooks, allowing us to develop more strategic and long-term partnerships. In short, we succeed when they succeed.”
Throughout the quarter, Better Collective continued its expansion strategy by acquiring national sports media across four markets.The acquisition spree kicked off at the beginning of Q3 with the purchase of Playmaker HQ, a content and social media firm.
This move significantly bolstered Better Collective’s capabilities in social media and sports content production.
The group also purchased four prominent sports media brands from the Everysport Group in Sweden.
These brands – SvenskaFans.com, Hockeysverige.se, FotballDirect, and Innebandy Magazinet – were acquired for a total of €3.7m.
Additionally, Better Collective expanded its footprint in South America by acquiring Torcedores.com, a Brazilian sports media platform.
This move not only brought the first Brazilian sports media brand into the Better Collective fold but also included the acquisition of an office in Sao Paulo.
In Denmark, Better Collective acquired Tipsbladet.dk for €6.5m.
Better Collective maintained its full-year financial targets.
The company anticipates revenue between €315m and €325m for the year, with an EBITDA before special items in the range of €105m to €115m.
For October, the group reported a 6% revenue decline to €24.3m. The decrease was attributed to an estimated impact of €8m due to a lower-than-expected sports win margin.
However, in November, Better Collective marked a significant milestone with its second-largest acquisition to date, Playmaker Capital, a digital sports media group.
Better Collective described the €176m acquisition as “transformational,” propelling the company into a leading position in North America and further solidifying its presence in South America.
The company also revealed that Nasdaq Copenhagen has conditionally approved Better Collective’s admission to its regulated market.
The first day of trading is expected to be tomorrow (17 November), and the ticker symbol will be BETCO DKK.
More to follow.