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  • Q4 2023: Raketech’s sub-affiliation pivot hits profits despite revenue rise
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Affiliate marketing business Raketech reported reduced EBITDA and net profit in Q4 2023 despite an overall increase in revenue.

Raketech reported €22.8m in Q4 revenue, up 45.3% from the same period the previous year. The company said growth in its sub-affiliation segment was largely responsible.

However, the lower relative margins of sub-affiliation saw direct costs more than double to €11.3m compared to 2022’s €4.4m.

Altogether costs amounted to €20m for the three-month period, a 75.3% increase from the previous year.

In addition to the increased sub-affiliation costs, the business was hit with impairments related to the Casumba acqusition, as well as increased product investment and consultancy fees.

As a result, EBITDA declined 6.3% to €6m. The business highlighted the quarter saw growth in the sub-affiliation segment offset by “softer development” for higher margin affiliate marketing.

The business also pointed to slow growth in Sweden and the 2022 FIFA World Cup leading to difficult comparables as responsible.

Raketech recorded €1.17m in profit for the quarter, down significantly from the €2.67m announced in Q4 2022.

On a full-year basis, the company witnessed a 47.6% increase in revenue to €77.7m. The sub-affiliation segment grew 191% over the year long period, where it now represents a significant chunk of overall revenue.

“This result serves as a solid platform for the coming year, where we will focus on identifying new markets, evaluating expansion options, assessing new partnerships, and focusing on business growth,” said Raketech acting CEO Johan Svensson.

“I am fully committed to driving additional value for our company.”

Raketech outlines 2024 strategy

Raketech has announced a strategic review to examine its affiliate marketing performance.

According to Svensson, this will entail a full analysis of its operating model. This will include what markets to prioritise and the best approach to capital allocation.

“Furthermore, we have started with a performance exercise of an entire product portfolio to optimise cash flow and to improve operational efficiency,” said Svensson on the Q4 2023 earnings call.

For sub-affiliation, the company said it intends to capitalise on the “good momentum” of the segment, as well as look to new market expansion.

The strategic direction of the business remains a hot topic. Previous CEO Oskar Mühlbach left the company in January, citing “strategic differences” between himself and the board.

This came in the wake of Raketech appointing M&A expert Marina Andersson to the business’ board in November 2023.

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