Raketech reported lackluster second-quarter earnings as the company restructured its business operations in North America.
The online affiliate and content marketing company generated $18.7 million in revenue in Q2 2024, a roughly 3.7% decrease compared to the same period last year. Raketech also reported an EBITDA of $4.4 million during the quarter, down 20% compared to Q2 2023.
Raketech attributed the results in Q2 to a decrease in affiliation marketing revenue. It also cited the operational challenges of a Google Update mishap impacting its assets.
The Malta-based company is taking steps to improve its bottom line, which includes an overhaul of its U.S. business to streamline operations and drive revenue.
“We completed a strategic review of our U.S. business, which resulted in a decision to divest our non-core advisory operations,” said CEO Johan Svensson during the company’s Q2 earnings call earlier this week. “In July, we successfully sold the tipster advisory business for $2.25 million and also secured an exclusive lead generation deal.”
The tipster advisory business, ATS Consultants Inc., was acquired by Raketech in 2021.
Raketech completed the transaction with a partial cash payment and an ongoing revenue share agreement. The transaction is subject to a one-off non-cash impairment charge. According to the Q2 earnings call, the impairment charge is approximately $10 million.
New opportunity for Raketech
Raketech is also expecting to drive U.S. profits through the opening of new markets.
“We got a kick start in North Carolina with it launching [sports betting] in March,” said CFO Måns Svalborn during the call. “The U.S. is acquisition driven but we expect to grow especially during football season as it starts at the beginning of September.”
Raketech is poised to generate revenue from its sub-affiliation business, which made its U.S. debut when North Carolina became a regulated sports betting market in March.
Raketech projects full-year adjusted EBITDA in FY2024 to range between $18.7 million and $20.9 million. The company previously estimated an adjusted EBITDA of $22 million.
