Better Collective Reports Solid Revenue Growth Despite Flat Q2 EBITDA

27% Revenue Increase in Q2

In Q2 2024, Better Collective recorded €99 million in revenue, a 27% year-over-year increase, largely driven by €62 million in recurring revenue streams.

While group EBITDA before special items remained flat at €29 million for Q2 2024, representing a margin of 29%, the results were in line with expectations.

This flat result is primarily attributed to the limited near-term contribution from the recent acquisitions of Playmaker Capital and Playmaker HQ, as well as increased investments in building adtech and AI competencies.

By comparison, Q2 2023 saw an exceptional EBITDA growth of 135%, with a margin of 37%, driven by the strong upfront CPA payments in the North American market.

Despite the lower margin in Q2 2024, Better Collective expects profitability to improve in the second half of the year, particularly as Playmaker Capital’s contributions increase. The acquisition of Playmaker Capital came with expected overhead costs in Canada, which have impacted the North American cost base, but margins are expected to rise during the latter half of the year.

Jesper Søgaard, Co-founder & CEO of Better Collective said “Thanks to a great team effort, we managed to deliver a strong Q2 in a time of changing market conditions. Our existing business is back to organic growth, and I am pleased to see that our diversified strategy has performed as envisioned”

Challenging North American Markets

Historically, the majority of  North American revenue was derived from one-time payments through cost-per-acquisition (CPA) contracts. However, the company is now gradually transitioning towards more sustainable revenue-sharing models. This shift is reflected in the company’s North American sports brands, which include well-known platforms such as Action Network, Yardbarker, Playmaker HQ, and VegasInsider.

In Q2 2024, Better Collective generated €26 million in revenue from North America, a 12% year-over-year increase, primarily driven by recent acquisitions. However, the company experienced an 18% decline in organic growth, largely due to comparisons with an exceptionally strong performance in the same quarter last year, as well as the impact of a media partnership affected by Google’s policy changes.

The move toward revenue-sharing contracts has resulted in a temporary decline in immediate revenues, especially compared to Q2 2023, when more New Depositing Customers (NDCs) were acquired through hybrid CPA contracts that logged initial payments as revenue.

As a result, while revenue share income was lower in Q2 2024, the company is laying a foundation for long-term growth through recurring revenue from NDCs under revenue-sharing agreements.

Despite the revenue growth, Better Collective’s North American operations faced profitability challenges in Q2 2024. The region’s operating profit before depreciation and amortization dropped by 75% to €1.9 million, reflecting the impact of lower revenue share earnings and increased acquisition-related costs.

The EBITDA margin in North America fell to 7% in Q2, down from 33% the previous year.

Strategic Shifts and H2 Outlook

The company remains optimistic about achieving its upgraded full-year financial objectives. Revenue projections have been revised upward to a range of €395 to €425 million, with EBITDA expected to reach between €125 and €135 million.

Entering H2, Better Collective is optimistic about navigating industry changes and maintaining its growth trajectory. Søgaard concluded by affirming the company’s commitment to delivering on its promises, stating, “We now look forward to the usual busy second half of the year with most major sports leagues being active.”