Better Collective confirms more than 300 redundancies despite 8% rise in Q3 revenue

Better Collective has announced an 8% year-on-year (YoY) revenue rise for Q3 2024 to €81.2m (£67.5m), although the affiliate giant did note a 6% decline in organic revenue growth for the quarter.

Bosses said the 6% dip was due to “lower activity than expected” in the US and an “accelerated slowdown” in Brazil.

The Danish firm had communicated these concerns last month when it announced a €50m streamlining plan involving redundancies and a reduction in full-year 2024 guidance.

Today’s Q3 earnings report revealed more than 300 staff have been let go, representing over 15% of the affiliate’s workforce.

The firm said most of its cost-cutting measures had been executed, leaving the company on track to feel the full effect of the changes from the start of 2025.

The results showed EBITDA for Q3 had ticked up from €19.1m to €21.9m YoY while operating profit declined from €11.5m to €8.9m.

The firm delivered 396,000 new depositing customers (NDCs) during the reporting period, 84% of which were on revenue share contracts.

However, NDCs declined 11% YoY as management again pointed to the difficulties posed by the US and Brazilian markets.

Breaking revenue down by segment, publishing revenue jumped 16% YoY from €48.5m to €56.4m and accounted for 69% of group revenue.

However, organic growth dipped 5% as Better Collective said revenue gains were driven by its M&A activity. Paid media revenue slipped 8% from €27m to €24.8m.

Geographically, North America revenue dropped 12% YoY from €21.4m in Q3 2023 to €19m, with organic growth crashing 24%.

Better Collective said the decline was exacerbated by its revenue share agreement pursuit.

The group noted: “The North American group’s largest partners primarily operate on revenue share contracts. This approach is focused on sustainable long-term growth, however amplifying the short-term revenue decline.

“In response to these market changes, the management has initiated a restructuring of its operations to ensure sustainability and profitability in North America.”

Staying in North America, Better Collective confirmed it had acquired a “smaller social media asset” in the region for $7m, although the business did not disclose the identity of the acquired brand.

In Europe and the Rest of the World, revenue was up 15% YoY to €62.2m despite the ongoing slowdown in Brazil.                                                                                                                                       

Looking ahead to the South American country launching its regulated market in January, Better Collective said it expects around 100 operators will be granted Brazilian licences.

In turn, this should create a “highly competitive market dynamic that offers a favourable business environment for Better Collective”.

The Q3 report did not alter the group’s full-year 2024 guidance, which had been reduced in an earlier update announcing the decision to streamline operations.

As per the revised guidance, revenue is expected to land between €355m and €375m, down from €395m to €425m, with EBITDA hitting between €100m and €110m, lowered from €130m to €140m.

Better Collective CEO Jesper Søgaard said the structural changes made within the business had made the group a “leaner organisation, poised to attack future opportunities and challenges head on”.

He remarked: “By ensuring our operations reflect current demand, we retain the flexibility to scale up as opportunities arise.

“I am optimistic that this strategic recalibration will lead to a stronger foundation for future growth, allowing us to continue delivering exceptional value to our partners and stakeholders.

“Related to returning to growth, our long-term financial guidance remains intact, implying strong growth ahead, including M&A when the timing is right.”