Better Collective revenue more than doubles to €45.4m in Q3 2021
Better Collective’s financial results for the third quarter of 2021 showed revenue of €45.4m, up 148.2% from the €18.3m earned in Q3 2020.
In addition to growth driven by acquisitions undertaken since Q3 2020, organic revenue growth for the quarter was 29%. The total brought the business’ year-to-date revenue to €124.3m, 128% ahead of the first nine months of 2020, during which it brought in €54.5m.
After revenue-related costs of €31.9m, operating profit for the quarter came to €13.6m, which after special items left the business with EBITDA of €2.0m. Excluding special items, the company’s EBITDA was €13.6m, at a margin of 30% – lower than the 46% margin recorded in Q3 2020.
The majority of the quarter’s revenue, €31.3m, came from Better Collective’s publishing segment, consisting of the business’ proprietary online platforms and media partnerships where online traffic is coming either directly or through organic search results.
The remaining €14.1m came from the company’s paid media segment. Better Collective said that this segment was impacted by its decision to switch more new depositing customers (NDCs) from pure cost-per-acquisition (CPA) agreements to revenue share contracts or hybrid revenue models.
This, Better Collective said, is expected to have a positive impact in the long run, but revenue and EBITDA margins are impacted negatively in the short term, with the paid media segment generating an EBITDA margin of just 9% during the quarter.
By geography, the US generated 31.8% of Better Collective’s revenue, at €14.4m, with the rest of the world generating the majority, €31.0m.
Better Collective said its acquisition of The Action Network in May this year puts the business in a leading position within sports betting media in the US, and creates a strong foundation for benefitting from the continuing regulation of the US betting market.
The performance of The Action Network has been strong across its KPIs, including significant audience growth, it said, and the US business overall delivered a strong performance on the back of Arizona opening up for sports betting and the start of the NFL season in September.
September delivered €8.9m in revenue from the US business, accounting for 62% of US revenue in the quarter.
In Europe, Better Collective said the newly introduced regulatory regime in Germany has not had a significant impact on player behaviour, and while some market adjustments are to be expected in the short term, the overall market outlook for the business is positive.
In the Netherlands, it said that following acquisitions of Soccernews.nl and Voetbalwedden.net, a well-established Dutch online sports betting community, Better Collective has a leading position in the country’s online betting market.
The Netherlands is expected to produce high growth for several years, it said, not least due to regulations stating that users must register a new account, even if they previously held accounts with unlicensed operators prior to the regulation of the market.
Other key markets from which Better Collective expects future growth include Brazil, where the confirmation of a GGR-based tax regime has had a highly positive effect on market forecasts, and Sweden, where temporary online gambling restrictions including a SEK5,000 monthly deposit cap for online casinos ended following the end of Q3.
Better Collective also said it is preparing to roll out its key US and international brands in Canada as soon as regulation allows.
The business’ financial targets for the full year 2021 include over €180m in revenue, organic growth of more than 25%, and EBITDA of over €55m.