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Raketech CEO Oskar Mühlbach has highlighted a shift towards improved quality in the affiliate sector, emphasising the company’s strategy of prioritising a smaller group of superior products.

Topline numbers

In Q2 2023, Raketech generated revenue of €17.6m, reflecting a 56% increase compared to Q2 2022.

EBITDA grew by 45% year-on-year, reaching €5.5m during the quarter.

However, the EBITDA margin settled at 31.1%, slightly lower than the 33.6% achieved in Q2 2022. This decrease can be attributed mostly to the larger contribution from the lower-margin sub-affiliation business.

Affiliate marketing contributed €10.3m to Raketech’s total revenue in Q2 2023, up 28% on Q2 2022.

Sub-affiliation reached €6.3m, representing phenomenal growth of 191.8% compared to the prior year quarter.

However, betting tips and subscriptions generated just €1m, remaining mostly in line with the levels generated in the prior year period.

News nugget

CEO Oskar Mühlbach commented on the evolving landscape of the iGaming affiliation industry, noting a gradual yet steady shift towards enhanced quality.

This shift aligns with operators’ consolidation efforts, stricter legislative regulations, and the escalating competition within the marketing sector, he said.

“Therefore, we focus on fewer but better products now than we did a few years ago,” Mühlbach highlighted.

To underscore the impact of this focused strategy, Mühlbach cited the trajectory of Raketech’s Casinoguide brand, which has tripled in size “under flagship treatment” and now stands on par with Casinofeber in Sweden.

Moreover, he highlighted that during Q2 2023, Raketech launched its SlotsJava asset across three US states and in Ontario, Canada, a move expected to accelerate growth in North America.

“It is a bit too soon for concrete results just yet, but I’m very much looking forward to revisiting this some time,” he said.

Mühlbach characterised the performance of Raketech’s betting tips and subscriptions division as “disappointing”, although he added that this segment’s performance is always lower in Q2 due to seasonality.

Nevertheless, he highlighted that the websites within this segment constitute some of the largest in the company’s portfolio in terms of monthly users.

He emphasised that this is precisely where the most substantial potential lies, with plans to expand the existing tipster framework by incorporating affiliate marketing as well.

Best quote

“In the US, we are a bit behind schedule. It has proven to be trickier than expected to transfer our affiliation knowledge across the Atlantic. However, with our New York-based MD in place as of last quarter, things have started to move quickly, and we are making progress.”
Raketech CEO Oskar Mühlbach

Best question

Rikard Engberg, equity research analyst at Erik Penser Bank, was keen to know more about progress at Affiliation Cloud, Raketech’s proprietary portal that allows partners to track all links. The portal was beta launched last year and rolled out in Q1.

CFO Måns Svalborn replied that Raketech hasn’t started discussing it separately and revenue from it is included it in the sub-affiliation business segment.

“We’ve had a somewhat slower growth period during Q2 for Affiliation Cloud, but we are looking at accelerating the sales efforts here during the second half of the year with a dedicated team,” he said.

Svalborn added that this is still in line with Raketech’s strategy and things are progressing as planned.

Current trading and outlook

July revenues reached €6.9m, up from €3.9m in July 2022, “once again with sub-affiliation standing out positively, while most other markets stayed stable and strong,” Raketech said.

Building upon its robust performance in 2023 thus far, Raketech has revised its full-year guidance.

The company anticipates revenue to fall within the range of €65m to €70m.

EBITDA is projected to be in the range of €23m to €25m.

Additionally, Raketech said it foresees free cash flow in the range of €13m to €15m.

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