Better Collective enjoys “exceptional” Q2 despite US headwinds

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Better Collective CEO Jesper Søgaard has told investors that the affiliate firm enjoyed an “exceptional” quarter of trading in Q2, with EBITDA jumping by 135% year-over-year. 

Publishing its Q2 financial report, the sports media group reported revenue of €78m, a 39% increase on €56m the year prior, alongside EBITDA growth of 135% to €29m (€12m), with a margin of 37%.

Headline results were bolstered by a 32% increase in new depositing customers to 500,000, driving the uptick in revenue and in turn, generating a significant 54% uptick in operating profit from €9.6m to €20.7m. Significantly, 87% of these new depositors were via rev share deals, which are notoriously better for the affiliates. 

The group undertook a review of its full-year 2023 financial targets in June, revising revenue expectations to €315m-€325m, which would mark growth of 3% on 2022 full-year revenue.

Jesper Søgaard, Co-Founder & CEO, said: “Q2 turned out to be an exceptional quarter with strong growth building on the momentum generated in previous quarters. This was driven by a great performance across the group, highlighting the Americas and our media partnerships as key factors. 

“Driven by successful acquisitions and a strong team to execute on our strategy, I am pleased with the progress we are making towards our vision to become the leading digital sports media group.”

As witnessed through XLMedia updates and Catena’s financial report yesterday, the affiliate scene in the US is weaker than in previous years due to the lack of state launches on the sports betting and online casino front. 

Despite this, Better Collective is reinforcing its strategy in the country, and the CEO asserted his belief that the group’s content is its biggest strength. 

Asked about the poor state of the US market for affiliates, Søgaard told investors: “I think it related to that we had a very big launch of the state of New York was a big spend by sportsbooks, which probably caused them to reduce suspend a bit on the back of that. 

“But as we have believed since the start of the American market, we invest for the long term, and last year, we still saw a lot of opportunity and wanted to improve our position from a brand and content perspective.

“So, for us, it was about keeping the foot on the pedal even though there was maybe a slight pullback in spend, but fundamentally in the long term, we believe in this market so we’ll continue to invest to secure our position.”

Despite the tough conditions, Better Collective reached positive contributions from North American operations in Q2. Going from a negative EBITDA last year, it made a positive 33% margin from the region, giving a confidence boost for increased spend in better conditions. 

And those conditions could be coming up soon, Søgaard stated, as the upcoming NFL season, particularly in Ohio and Massachusetts, could provide a welcome boost to the US sports betting scene. 

He added: “The NFL is a big one for North America but, in general, there are a lot of sports ongoing in North America. For European football, it’s business as usual from now for the rest of the year. So in that sense, it should be similar to most other years where last year was probably the one that was unusual due to the World Cup.”

Moving further south, Brazil has been on the industry’s mind and that interest has swelled since President Lula signed the provisional measure for sports betting.

Better Collective noted that it had opened an office in Rio de Janeiro as the country became a key region of focus for the affiliate in the last year. 

 “We have spent more than a decade developing and implementing this formula in Europe and executed it successfully in North America. 

“During the first half of 2023, focus was on establishing a strong local presence in the South American region by leveraging our global expertise and resources. 

“We are now working to put together a local team that can excite sports fans through premium content and engaging communities.”