‘Record’ acquisitions and US regulatory developments have allowed Better Collective to get off to a ‘strong and exhilarating start’ for 2021 as the sports betting media group recorded organic revenue growth of 19% in Q1.
Publishing its financial results for the three months ending 31 March, Better Collective noted that revenues for Q1 grew by 86% to $47m, up from $25.3m in Q1 2020. Publishing made up 61% of revenues, while Paid Media accounted for 31%.
EBITDA for the period jumped from $11m in 2020 to $16m – an increase of 46%. But despite reaching an ‘all-time high’, Better Collective explained that ‘revenue was negatively impacted by the switch from CPA to revenue share in the Paid Media segment and the lower than average sports betting margin’.
Commenting on the results, CEO Jesper Søgaard said: “Revenue growth in Q1 was strong compared to the same quarter last year and marks a record high. Strong April numbers resulting in a record month further underline the growth trend building on a strong finish to 2020.
“Sports wagering in our revenue share accounts was also at a record high continuing the trend from the previous quarter, while sports betting margins were just below average, offsetting revenues slightly.”
Better Collective drew particular attention to its acquisitions of Mindway AI, The Action Network , HLTV, Rekatochklart and Atemi – all of which it believes will help ‘to execute its strategy of becoming the leading sports betting media group’.
As would be expected, these acquisitions led to an increase in the cost base for Better Collective. The cost base (excluding depreciation and amortization) rose by $16.7m to $31m, with ‘the majority coming from the acquisition of Atemi’.
The take over of The Action Network will allow the sports betting media group to strengthen its position within the US market – having already got off to a ‘strong start’ in Michigan and Virginia.
Søgaard continued: “We consider Action Network to be the absolute best and most complete product in the US market, and we are thrilled to welcome Action Network and its employees to Better Collective.
“This acquisition, which is the largest in Better Collective’s history, gives us a leading position within sports betting media in the US, and creates a strong foundation for benefitting from the continuous regulation of the US betting market.
“Given the continued pace of new states regulating, Better Collective expects the US market to continue growing and our US revenues to surpass $100 million by 2022, with positive and increasing operational earnings. Market analysts expect the US sports betting market to expand >4x until 2025 and >20x in the next decade. This acquisition puts us in pole position to secure market leadership in this rapidly-growing market.”
Looking to the future, the CEO explained that Better Collective ‘remains committed to continuing the industry consolidation through M&A’, having raised the group’s financial targets for 2021.
Søgaard believes that total group revenue will exceed $218.1m (previously circa $194m); EBITDA to exceed $67m (previously $60.6m) and organic growth to exceed 25% (previously 20%).