Raketech reports double-digit adjusted EBITDA decline in “challenging” Q2
Affiliate points towards low performance in several regions as revenue drops to €17m
Raketech endured a tough Q2 with adjusted EBITDA falling to €4.4m due to lower performance from several assets and the “significant Google update completed at the end of April”.
Earnings declined 20.3% year on year (YoY) from Q2 2023’s €5.5m as bosses pointed to Swedish casino dips and a lower performance in the Casumba assets.
Revenue also dropped 3.7% YoY to €17m, with the firm pointing to a decrease in affiliation marketing revenue of 25.9% to €7.6m offsetting 29.7% YoY growth in sub-affiliation revenue of €8.2m.
Betting tips and subscription revenue stood at €1.1m – growth of 15.9% YoY.
While revenue in the Nordics fell 2.5% YoY to €7m, revenue from the rest of Europe grew to €1.1m – a 52.3% YoY rise.
Revenue in the US grew by double-digits, 14.4% YoY, to €1.4m. However, there was a similar drop in the rest of the world’s revenue, with the figure standing at €7.3m, a 12.4% YoY drop from €8.4m.
New depositing customers fell 14.8% YoY to 49,500.
In addition, casino revenue dropped 5% YoY to €13.5m, though sport revenue grew 2% YoY to €3.4m.
The affiliate’s operating loss for the quarter stood at €8.9m as Raketech swung into the red after posting a €2.8m operating profit in the corresponding period last year.
There was also a 35.1% YoY decline in adjusted operating profit, with the figure standing €1.6m.
Raketech’s challenging quarter saw free cash flow before earnouts fall 45.2% YoY to €2.7m.
The Malta-based firm also revealed its July performance is down against July 2023, with revenue at €4.6m compared to €6.9m.
Bosses said this was driven by “weak performance in the lower margin sub-affiliation area”.
CEO Johan Svensson, who was given the role permanently in May after a five-month interim stint, reflected on the challenges posed by the Google update and noted his confidence for the rest of the year.
He said: “A comprehensive business audit was finalised in connection with the end of the Google update. This has led to several initiatives around enhanced content focused on a broader audience, technical product improvements, SEO optimisation and full focus on user experience.”
Svensson added: “We have made progress in stabilising performance, albeit at a reduced level, and we feel confident that our actions will return the assets to growth.
“These efforts continued to pay off during Q2 with continued strong results despite the US sport season slowing down.
“Performance is anticipated to improve even more in H2 as US sports activity gains momentum throughout the year.”
During the period, the firm also executed on its plan to issue shares in connection with an earnout consideration payment to the founders of Casumba.