Raketech has reported all-time high revenue in Q1 2023 despite a 31% decline in its tipster business.
Raketech set a new record by generating revenue of €15.8m in Q1 2023. This represents a 24.4% growth rate, with all growth being organic.
Revenue from Raketech’s core business area, affiliate marketing, grew by 32% year-on-year to €10.8m.
Sub-affiliation generated a record revenue of €3.6m, marking a 46% year-on-year increase.
According to the company, this growth was mainly due to the strong results from network sub-affiliation in South America.
Raketech’s Q1 performance was largely positive, with one exception: its smallest business area, betting tips & subscriptions, saw a year-on-year decline in revenue by 31% to €1.4m.
This decrease was primarily attributed to lower results from the company’s win-share component, which is based on its sports betting predictions.
EBITDA increased by 20.1% to €6.1m, corresponding to a 39% margin.
CEO Oskar Mühlbach (pictured left) expressed his satisfaction with Raketech’s geographical revenue breakdown, highlighting that non-Nordic revenue had now reached approximately 64%, while revenue from the Nordics had also grown by 7%.
However, he was rather tight-lipped on which Rest of World markets contributed to this growth.
“We have historically not provided guidance for specific markets, so I don’t think it’s a good idea to start now,” he said.
However, he identified three markets: India, Japan and South America, all of which are “showing positive signs and good underlying growth”.
“Regarding the Indian market, our online cricket betting assets target not only India but also other countries in the region.
“The Indian Premier League (IPL) is a major event, and we see a lot of activity on our assets, as well as high demand from operators for advertising,” Mühlbach added.
CFO Måns Svalborn meanwhile hailed Raketech’s sub-affiliation business, which enables the firm “to quickly and efficiently enter new markets”, and consequently was responsible for growing revenue in the Latam region.
Mühlbach also provided some insight into Raketech’s long-term strategy. “We believe that it is essential to invest in fewer but high-quality flasgship brands.
“This strategy does not only apply to traditional affiliation, but also to the betting tips and subscription division, or any other products we might have in the future.
“Simply put, this means that we are in parallel narrowing down and increasing our investments into fewer but stronger products to ensure our offering is sustainable in the long term,” he said.
However, Mühlbach did not provide any more details on the company’s long-term plan for competitive reasons.
Given Raketech’s strong Q1 performance, Marlon Värnik from Nordea asked if it is reasonable to assume that the company’s 2023 performance is trending above initial expectations, or if there is an expectation of market softening during Q3.
CEO Mühlbach responded that, despite the strong start in Q1, the company has chosen not to change its guidance at this point.
“We’re reiterating it and we do so with confidence,” he stated.
“If there’s a reason for us to update the guidance as we move along, we will, of course, address that to the market, but at this point, we’re setting with being confident about the guidance,” he added.
Current trading & outlook
During 2023, Raketech anticipates to generate between €60m to €65m in revenue, excluding any acquisitions.
Additionally, the company predicts an EBITDA of €20m to €24m for the year.
Raketech reported revenue of €5.9m in April, driven by the significant growth of its sub-affiliate programme.
The company sees this positive performance at the start of Q2 as an encouraging sign and is confident in meeting its full-year guidance.
Raktech shares were trading nearly 6% higher at the time of writing.