Raketech Q2 Revenue and EBITDA Decline Year-on-Year

EBITDA and Expenses

The company’s EBITDA also saw a 20% decrease settling at €4.4 million. Consequently, the EBITDA margin contracted to 25.8%, down from 33.4%.

Raketech reported a net loss of €9.9 million for the quarter, a significant downturn compared to a profit of €1.8 million in Q2 2023.

The decline was partially driven by a 14.8% reduction in new depositing customers (NDCs).

Publisher costs saw an increase, rising to €6.3 million from €5.5 million, largely due to heightened activity in the sub-affiliation segment.

Other direct expenses remained stable at €1.1 million, compared to €1.2 million in the previous year. Employee benefit expenses also remained relatively consistent, amounting to €2.5 million, slightly down from €2.6 million in the prior year, with the company’s full-time employee count growing to 130 from 124.

There was a slight reduction in other expenses, which decreased to €2.7 million from €2.8 million. This decrease is primarily attributed to the positive effects of organizational restructuring.

Additionally, the number of contractors employed by the company decreased from 102 to 68 by the end of the quarter. Depreciation and amortization costs were slightly lower, totaling €2.8 million compared to €3.0 million in the same period last year.

A significant event during the quarter was an impairment review on goodwill, websites, and domains within the US market, resulting in impairment costs of €10.5 million.

Cash Flow and Financial Position

Raketech’s cash flow from operating activities was €3.3 million, down from €5.5 million in the same period last year. Cash flow from investing activities was relatively stable, at €-0.3 million.

Cash flow from financing activities also amounted to €-0.3 million, an improvement from the €-2.3 million recorded in Q2 2023.

This was primarily due to lease and interest payments made during the quarter. By the end of the quarter, Raketech’s cash and cash equivalents had decreased to €9.8 million, down from €12.2 million at the same time last year.

Raketech’s revenue decline was influenced by several factors, including a drop in the performance of its core Swedish casino operations and a decrease in affiliation marketing revenues. However, the company did see some positive trends in other areas, such as growth in sub-affiliation revenues and increased earnings from betting tips and subscription services.

The company’s sports-related assets continued to perform well, particularly during major events like UEFA Euro 2024 and the Indian Premier League, which helped to offset some of the revenue losses.

Looking ahead, Raketech has revised its financial outlook for the year. The company now expects its adjusted EBITDA to range between €17 million and €19 million, a decrease from earlier projections.