Better Collective prepared for €50m Brazil hit in 2025 as Q4 revenue jumps 13%

Better Collective has announced a 13% year-on-year (YoY) rise in Q4 revenue from €85.2m to €96.2m (£79.6m), with the affiliate giving deeper insight into headwinds in Brazil which hampered growth in 2024.

While the Danish business reported a 2% decline in organic revenue growth, operations in Europe, Canada and esports were “in line with expectations”.

However, the impact from Brazil in the lead up to the launch of the regulated market on 1 January, along with a slowdown in the US, hampered the affiliate giant.

It was also announced that Q4 EBITDA rose 14% YoY from €29.5m to €33.5m, creating a corresponding EBITDA margin of 35%.

Meanwhile, EBIT slipped from €20.6m to €17.2m, while post-tax profit jumped from €7.5m to €15m.

New depositing customers for the final three months of 2024 amounted to 407,000, a 15% YoY decline management said was mainly due to issues in Brazil.

On operations in the South American country, Better Collective said the slowdown in preparation for the regulated market’s launch had “accelerated in Q3 as well as further in Q4”.

Better Collective stated it expects Brazil to return to growth in 2026, when it will become a “highly profitable and high growth market for the group in the mid to long term”.

It was revealed that Brazil accounted for around 19% of group revenue last year, or approximately €70m, most of which was derived from revenue-share agreements.

With the market accounting for almost a fifth of the business, Better Collective said newly implemented regulations could result in a €30m to €50m impact on revenue and EBITDA before special items in 2025.

Bosses said a local GGR tax and “added costs on NGR” is estimated to come in at 26%, which in turn is expected to impact revenue by between €15m and €20m.

Additionally, as part of the regulation of the Brazil market, customers were required to re-activate accounts, leading to customer churn.

Better Collective said this churn, as well as greater competition in a regulated space, would impact its revenue-share agreement income by around €20m to €30m this year.

Overall, the group anticipates a 50% to 70% decline in Brazilian revenue-share income in the short term.

The company added: “Throughout 2023 and 2024, Better Collective has expanded its localisation efforts by building a team of over 100 employees in Brazil to meet all onshoring requirements under the regulation.

“The market has launched with some sportsbooks being granted licences while the market is in low season. The activity is expected to pick up from March when the high season for sports begins.”

Looking at revenue by vertical, the group’s publishing arm reported €70.9m in revenue for Q4 versus the €25.3m derived from paid media.

Geographically, Europe and the Rest of the World revenue jumped 16% YoY to €67.6m, and EBITDA rose 18%, despite the impact from Brazil.

In North America, revenue growth was 6% YoY to €28.6m. EBITDA slipped 1% to €6.8m and EBIT plummeted 57% to €3m.

Explaining the performance in the region, Better Collective said “lower-than-expected” activity in the lead up to the NFL season as well as a lack of state launches were to blame.

Elsewhere, the cost-saving programme implemented last year, which saw more than 300 staff made redundant, is expected to have a full annual effect of €50m in 2025.

“Approximately 65% of the total programme cost is allocated to salaries, with 2% attributed to executive management. Additional cost savings include 13% from editorial reductions, 9% from procurement, 3% from office closures, and 10% from other savings,” Better Collective said.

CEO Jesper Søgaard

On a full-year 2024 basis, revenue rose 15% to €371.5m while EBITDA remained flat with a 2% downturn to €102.5m.

The affiliate set 2025 guidance, with revenue expected to land between €320m and €350m. EBITDA before special items is forecasted to be €100m to €120m.

The group also hinted that capital allocation may pivot away from M&A, which historically helped turn Better Collective into the industry’s largest affiliate, and more towards share buy-backs and debt reduction.

CEO Jesper Søgaard said: “We recognise there are multiple ways to create shareholder value.

“While M&A has been a key driver in the past, our near-term focus will shift toward driving organic growth and safeguarding the robust cash flow of the business to bring down debt and buy back own shares.

“This approach ensures we remain agile and resilient, laying the groundwork for long-term value creation, and eventually getting us back to the M&A agenda that still offers many great opportunities.

“As we close this chapter and look forward to 2025, I am incredibly confident about the future of Better Collective. The resilience and dedication of our teams have been instrumental in navigating a challenging year, and I want to express my deepest gratitude to all our employees.”