Raketech encounters choppy US waters as Europe provides lifeboat

The second quarter ended on a positive note for Raketech as the betting marketing technology group reported revenue growth across several markets, although its performance in sports and in the US stalled.

In an update to its Nasdaq First North investors, the Malta-based firm outlined group-wide revenue growth of 56% to $19.2m (Q2 2022: $12.3m), with EBITDA growth of 44.6% to $5.6m ($4.1m), although the margin did drop slightly from 35% to 31%.

Operating profit, meanwhile, rose 25% from $2.2m to $2.7m, driving profit for the quarter 42% to $6m ($1.3m). Although affiliate marketing as a proportion of revenue dropped to 59% from 71% in Q2, this vertical still recorded growth of 38% to $11.2m ($8.7m).

Geographically, the US proved a tricky market for the company as revenue declined 7% from $1.4m to $1.3m. Europe provided a bulwark against this, as Nordic revenue rose 37% to $7.8m ($5.8m) to account for 41% of group-wide revenue, whilst Rest of World rose 110% to $9.1m ($4.4m) and Rest of Europe 10% to $742,369 (€819,661).

Group CEO Oskar Mühlbach said: “Our geographical position within Affiliation Marketing remained stable compared to last quarter. But, as an effect of our Network business being particularly successful in Latin America and the Nordics, our revenues from these markets increased more than others on group level.”

From a product perspective, the group’s performance in sports betting did slow somewhat during the quarter by 4.4%, dropping from $3.8m to $3.6m – however, this was buoyed by a resounding success for casino, which saw revenue rise 84% to $15.6m ($8.5m).

In his statement, Mühlbach highlighted in particular the performance of the Casumba brand, Affiliation Cloud product and its sub-affiliation business, the latter having performed well in the Nordics and Latin America

At the end of the first six months of the year, Raketech’s group-wide revenue closed at $36.4m, 39% higher than $26.1m in H1 2022. EBITDA grew by 30% from $9.7m to €12.6m, although as in Q2 the margin for the full six months dropped slightly from 37% to 35%.

In contrast to the quarter, however, revenue for the full H1 from the Rest of Europe fell by 2.2% to $1.43m ($1.46m), and the US continued to face difficulties with a decline of 16% to $3.3m ($4.1m).

Once again, Nordic and Rest of World revenue provided a solid bulwark against this with respective increases of 22% to $14.1m ($12m) and 95% to $17m (€8.7m). 

A similar narrative was seen from a product perspective as sports revenue in H1 closed 9% lower than the previous year at $7.7m ($8.5m) but casino revenue increased heavily by 63% to $28.6m ($17.4m).

Based on an overall increase in revenue during the quarter, driven heavily by casino as well as Nordic and Rest of World operations, Raketech remains confident that it will achieve its projections for the full trading year in the face of US difficulties.

The group currently expects revenue between $70.7m-$76.2m, excluding acquisitions and EBITDA between $25m-$27.2m as well as an increase in free cash flow by $14.1m-$16.3m. Again citing the Casumba and sub-affiliate network, Mühlbach noted that July revenue had risen 43% to $7.5m ($4.2m).

Mühlbach concluded: ”Strengthened by the recent successful development in Casumba and sub-affiliation/Network, I look forward to driving progress within our strategic growth initiatives, focusing on our flagship products, accelerated US growth and AffiliationCloud.

“In conclusion, I would like to thank our strong dedicated teams across the globe, helping our clients to stay ahead of the game. I am confident that we are well placed to leverage the opportunities ahead and position ourselves as the first choice in the growing igaming affiliation market.”