Better Collective revenue jumps 26% YoY as US rev share shift continues

Affiliate giant warns over difficult start to Q4 due to sports margins as it gears up for Nasdaq Copenhagen listing  

Better Collective has announced Q3 revenue of €75.4m, representing a 26% year-on-year (YoY) rise on Q3 2022’s €59.7m.

Alongside the jump in group revenue, recurring revenue increased by 49% to €46m.

Group EBITDA rose 35% from €14.6m to €19.6m during the quarter, with a corresponding EBITDA margin of 26%.

In what the affiliate described as an “eventful quarter”, strong growth in the firm’s paid media division delivered positive results.

The group’s paid media arm returned a 46% YoY jump in revenue to €27m, with Better Collective highlighting strong growth in the Americas and the transition to revenue share deals with its partners as the main drivers.

Revenue from publishing increased 17% YoY to €48.5m, with the segment accounting for 64% of total group revenue.

Geographically, North American revenue increased 24% YoY to €22.5m as the company noted its transition towards revenue share deals in the US and Canada was moving faster than expected.

EBITDA in the region soared 54% to €3m, with EBITDA margin landing at 11%.

In Europe and the rest of the world, revenue increased 27% to €52.9m while EBITDA increased 32% to €16.6m.

New depositing customers (NDCs) landed at 445,000, representing a 27% YoY increase from Q3 2022, with 87% of NDCs sent on revenue share contracts.

Post-Q3, Better Collective noted that revenue in October was down 6% YoY to €24.3m.

The affiliate giant’s revenue and earnings were negatively impacted to the tune of €8m due to “significantly lower sports win margin than expected”.

Elsewhere, the group is set to dual list on the Nasdaq Copenhagen from 17 November after announcing its intention to do so in September.

Better Collective CEO Jesper Søgaard said the shift to revenue share in the US would have a short-term impact but he was confident it was the right move.

He said: “Personally, I like to think of our revenue share transition as growth in disguise.

“I remain highly excited about the transition as our data tells us that North American customer lifetime values are very high compared to anywhere else in the world, and to fully capture this potential we need to operate on revenue share agreements.

“I would like to stress that this transitional phase will continue to have a short-term dampening impact on our financial performance in the coming quarters, also heading into 2024.

“However, given the aforementioned factors, this is something we must see through, as it simply is not an opportunity we want to miss out on,” the CEO added.


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