Raketech Reports 53.8% Revenue Drop in Q2 2025 Amid Strategic Restructuring

US Assets Divestment Drives Revenue Decline

The majority of Raketech’s revenue decline stemmed from three key areas: struggling Casumba assets, the Paid Publisher segment within SubAffiliation, and the fully divested US business. The company completed the sale of its non-core US tipster and subscription assets for €1.25 million at the end of June.

“These assets, along with a related U.S. operation, had a negative EBITDA impact of half a million euros in Q2,” CEO Johan Svensson explained during the earnings call. “As of July 1st, we no longer have any costs related to the divestiture of the business, which is expected to result in improved profitability going forward.”

The divestment will generate additional cost savings of approximately €150,000 per month starting in Q3. Adjusted EBITDA excluding the divested US tipster assets reached €2.6 million in the quarter, showing the underlying business performs better without these loss-making operations.

Affiliation Marketing Shows Resilience

While overall revenues declined, Raketech’s core Affiliation Marketing business demonstrated surprising strength in certain areas. Excluding the troubled Casumba assets, the remaining portfolio grew 5% quarter-over-quarter, driven primarily by Nordic and Italian markets.

The company’s new entrepreneurial partnership model proved particularly successful. Four new partnerships launched in Q1 2025 are now fully operational, with these partnerships accounting for over 60% of total Affiliation Marketing revenues.

“The background to what we now refer to as entrepreneur partnerships is the challenges we have experienced in operating our products at scale,” Svensson noted. Under this model, partners manage daily operations including SEO, content creation, and product development, while Raketech provides central support for sales, finance, reporting, and technology.

SubAffiliation Faces Continued Headwinds

SubAffiliation revenues fell to €2 million in Q2, maintaining a 48% gross margin. The Paid Publisher network within SubAffiliation experienced severe challenges due to structural changes in Google’s advertising ecosystem that began in March.

“We have not seen any notable improvements since then for our paid focused publishers,” Svensson admitted. The company has shifted focus to its organic publisher network, which performed as expected given seasonal effects from fewer US sports events in Q2.

Despite current challenges, Raketech remains cautiously optimistic about the upcoming US football season. The company continues pursuing exclusive network agreements with operators for its AffiliationCloud platform in the US market.

Cost Reduction Delivers Results

Raketech’s aggressive cost-cutting initiative, launched in Q1 2024, delivered substantial savings. The company reduced full-time employees from 130 to 87 and contractors from 68 to 37, achieving 35% cost savings excluding publisher costs.

CFO Måns Svalborn highlighted the financial discipline: “We initiated a cost cutting initiative and similar to last quarters, we’re now seeing this initiative realized with an overall decrease in total costs.”

Free cash flow before earnout payments reached €1.849 million, though after €2 million in planned earnout payments, free cash flow turned negative at €-0.151 million. The company extended its remaining €2.6 million earnout payment originally due September 2026 to March 2028, with partial installments scheduled through 2028.

Platform Strategy Advances

Development of AffiliationCloud continued steadily with the Q2 launch of “Rakecollect,” a proprietary software solution designed to gather performance data directly from operators. This positions Raketech ahead of competitors in data accuracy and efficiency.

The company also restructured its commercial teams to enable bundled sales across all platform assets, regardless of ownership. This allows Raketech to offer operators increased traffic volumes through single platform deals.

“Our focus going forward is clear to continue developing AffiliationCloud into a leading commercial affiliate platform in our gaming industry,” Svensson stated. “By enabling bundle sales across our internal assets and external publishers on a platform, we create commercial synergies.”

Looking Ahead

Raketech signed a comprehensive agreement for its TV sports guide with a leading Nordic TV streaming provider, marking a step toward diversifying beyond traditional SEO-dependent affiliate marketing. The company is also preparing intensively for the 2026 FIFA World Cup.

July preliminary data shows Affiliation Marketing performing in line with typical seasonal trends, reflecting softer early summer activity. The Paid Publisher network continues facing headwinds while the Organic Network performs as expected.

When asked about share buybacks, management indicated their priority remains paying down earnout obligations rather than returning capital to shareholders. The company appears focused on stabilizing operations and building sustainable growth through its platform strategy and entrepreneurial partnerships.