Affiliate group Raketech has reported all-time high revenue in Q4 2022, supported by year-on-year growth of 149.3% in US markets.
Topline numbers
Raketech reported Q4 revenue of €15.7m, an increase of 32.5% year-on-year.
Organic growth for the quarter amounted to 23.1%, which Raketech said was driven by an increase in revenue through its affiliate marketing assets, as well as in its software as a service (SaaS) sub-affiliation division.Affiliate marketing generated €10.4m during the quarter, or 65.9% of total revenue, amid year-on-year growth of 16.2%.
The sub-affiliation division generated €3.5m (22.3% of total revenue) amid 53.7% year-on-year growth, while the remaining 11.8% of revenue (€1.9m) came from Raketech’s betting tips and subscription division, up 175.1%.
By vertical, casino was by far and away the biggest sector for Raketech, generating €11.5m in revenue or 73.3% of the total, amid a year-on-year increase of 24.6%.
Sports betting revenue also grew significantly by 60.2%, as the vertical generated the remaining €4.2m in overall group revenue.
Adjusted EBITDA for the quarter was €6.3m, an increase of 15.9% on the prior year, while adjusted operating profit totalled €4.3m, up 11.9%.
Those figures brought full-year revenue for 2022 to €52.6m, up 36.7% from 2021, while adjusted EBITDA hit €20.2m, up 22.4%.
Adjusted operating profit for the full year came to €12.5m, up 29.3%.
The business referred 52,295 new depositing customers (NDCs) during Q4 amid a year-on-year increase of 27.7%. For the full year 2022, Raketech referred 161,146 NDCs, up by just 1.7%.
Geographical breakdown
The Nordics made up the best-earning region for Raketech in Q4, generating €6.5m or 41.3% of total group revenue. Year-on-year growth in the region, however, was a paltry 1.6%.
While generating a more modest 15.6% of total revenue, at €2.4m, the US was Raketech’s fastest growing region in Q4, as stateside revenue shot up 149.3% compared to 2021.
The Rest of the World (excluding Europe) also saw major growth at 60.9%, as it generated 39% of overall group revenue at €6.1m, making it the second largest region by revenue for the affiliate.
The Rest of Europe (excluding the Nordics), meanwhile, generated just €644,000, as revenue slipped by 5.4% compared to Q4 2021.News nugget
The firm’s US growth (149.3% in Q4 and 266.3% in FY 2022) was driven principally by businesses acquired by Raketech in 2021.
Acquired businesses included ATS Consultants Inc, which runs tipster services including Winnersandwhiners.com and Stasalt.com, as well as QM Media and its subsidiary P&P Vegas Group, which runs assets including Picksandparlays.net.
Best question
When asked whether the development of Sweden’s unregulated online gambling market was holding Raketech back, CEO Oskar Mühlbach had the following to say: “Since Sweden re-regulated back in 2019, this has been a major issue for a lot of us affiliates, but also from the operator perspective, of course.
“But we’re seeing a positive change here where the Swedish legislature is finally taking action against the black market, putting in various obstacles and sanctions potentially against the payment providers and as from May this year, also introducing new laws to get to other parts of the value chain that is supporting the black market.
“We’re finally looking positively on the development with regards to the black market in Sweden, where we hope to see that most of this volume over the next one or two years will return to the white market,” he added.
Best quote
Mühlbach echoed his counterpart Michael Daly (Catena Media CEO) on the importance of the Japanese online casino market:
“We see Japan as a pre-regulated market. And we think that it’s very important for Raketech to have a significant share of revenue from pre-regulated markets. This is very opportunistic, and those markets are typically growing faster than others, and are also typically much more profitable than other markets because operators are fighting to gain market share. And once the markets regulate, we come out with pole position.”
Current outlook and trading
Raketech expects revenue (excluding any new acquisitions) to fall between €60m and €65m in 2023, driven by strategic growth initiatives aimed at expanding the reach of its existing product base.
EBITDA for the year is expected to reach between €20m and €24m, when accounting for operational costs of around €2m for the year as an effect of the company taking over Casinofeber and Infinileads following the end of the earnout period.
Free cash flow is expected to increase substantially to between €11m and €13m, including around €6m following the integration of the businesses mentioned above.
CEO Oskar Mühlbach said that would help position the business to continue investing in its organic growth while continuing to be active in M&A.
The firm also expects to continue paying dividends to its shareholders in line with its current policy, he added.
