Better Collective posts €99m in Q2 revenue as fee for Playmaker HQ slashed

Better Collective has announced a 27% year-on-year (YoY) rise in group revenue as bosses said Q2 was marked by “good growth and progress” despite a weaker-than-expected contribution from Playmaker HQ.

The Copenhagen-headquartered affiliate’s top-line figure increased by €21m (£17.8) when compared to the €78m posted in the corresponding quarter last year, landing at €99m.

Organic growth recorded at 5% represents a 24 percentage-point decline from Q2 2023’s total, although bosses labelled as an “extraordinary performance”.

EBITDA met internal expectations to sit at €29m for Q2 2024, alongside a margin of 28%. However, EBITDA remained flat YoY.

That margin represents an eight-percentage point decrease when compared to Q2 2023, but Better Collective has outlined that the slight slump was expected due to recent acquisitions.

Most significantly, the Danish giant’s move for Playmaker HQ sanctioned last year has underperformed as costs rose, resulting in Better Collective also renegotiating its earn-out commitments.

Playmaker HQ was snapped up in July last year for an initial $15m, with up to $38m to be paid in potential earn-outs.

However, the Florida-based sports media platform has not met expectations, with a final price of $23m being determined against an initial $54m deal.

The affiliate said: “Better Collective remains very optimistic about the future of the brand, with the commercial team being replaced resulting in a ramp up in performance.

“Based upon the current commercial pipeline, the performance is expected to be lifted during the second half of 2024.”

The deal for Playmaker Capital, the Latam-facing media giant, has not been reworked, with bosses noting the integration has “proceeded according to schedule”.

Elsewhere, new depositing customers between April and June totalled 501,000, a sharp quarter-over-quarter (QoQ) uptick when compared to the 450,000 posted in the opening three months of this year.

Of that 501,000, 82% were sent to operators on revenue share contracts, while 100,000 were attributable to Euro 2024.

Analysing Better Collective’s revenue total by vertical, the group’s publishing segment contributed the lion’s share with a 33% YoY rise to €71.2m, making up 72% of the affiliate’s entire revenue.

Elsewhere, revenue from its paid media business came in at €27.9m, representing 14% growth.

The segment contributed to 28% of Better Collective’s entire revenue total, though that is a smaller share of the topline figure than the 31% posted in Q2 2023.

Geographically, Better Collective’s Europe and ‘Rest of the World’ arm saw revenue climb 33% to €73.3m, with bosses citing strong performances from media partnerships within this market as a contributary factor.

North American operations saw its total revenue share drop from 29% to 26%, although its total revenue figure was recorded as €26m, largely driven by acquisitions as organic growth actually fell by 18%.

Meanwhile, costs increased from €49m to €70m, an increase of 43%, which bosses explained was sparked by the acquisitions of Playmaker Capital and Playmaker HQ.

In terms of guidance, revenue is expected to land between €395m and €425m, which would imply around 21%-30% growth.

Full-year 2024 EBITDA total is now anticipated to be somewhere between €130m and €140m, which would represent 17%-26% growth.

Those ranges were boosted by the €42m acquisition of UK affiliate AceOdds during the reporting period, which management said was “seamlessly blending” with the wider business.

Reflecting on the group’s Q2 display, CEO Jesper Søgaard said: “I am pleased to share the overview of our Q2 performance – a period that saw good growth and progress across different fronts as well as a smaller hiccup. 

“Our group revenue increased by 27%, fuelled by 5% organic growth. This organic growth comes on top of outstanding growth last year.”

He signed off by adding: “Thanks to a great team effort, we managed to deliver a strong Q2 in a time of changing market conditions. Our existing business is back to organic growth, and I am pleased to see our diversified strategy has performed as envisioned.”

Better Collective shares are down 6% at the time of writing.