Better Collective credits media partnerships as revenue rises 26% in Q3

By Robert Fletcher

Better Collective has posted a 26% increase in revenue to €75.4m in Q3, driven by expanded media partnerships and growth within its paid media business.

EBITDA grew faster than the topline to end the quarter 35% up year on year at €20m with a margin of 26%.

Q3 proved a busy quarter for Better Collective, with the affiliate giant making a string of acquisitions, including Brazilian sports media platform Torcedores.com and Danish football site Tipsbladet.dk.

Shortly after the quarter, it announced its second largest acquisition to date, a €176.0m deal for Playmaker Capital, due to close in Q1 of 2024, with the affiliate saying this will strengthen its presence across both South America and North America.

Also in Q3, Better Collective announced its intention to list its shares on Nasdaq Copenhagen, in addition to Nasdaq Stockholm, with the first day of trading expected to be 17 November.

CEO Jesper Søgaard (pictured above left with co-founder and COO Christian Kirk-Rasmussen) said these developments, coupled with financial success in Q3, places the affiliate in a strong position for further growth in Q4 and into 2024.

“In Q3 we saw continued strong performance across the group working towards sustainable future growth for Better Collective,” Søgaard said. “I am especially pleased to see that the transition into recurring revenue with our North American partners is moving faster than expected, which will provide strong value in the long run.

“Throughout the quarter we continued our global expansion acquiring leading national sports media across four markets. Following the close of Q3, we made a transformational acquisition of Playmaker Capital. This will further accelerate our journey towards becoming the leading digital sports media group. 

“I am pleased to see that the entire team at Better Collective continues to execute strongly on our strategy.”

Publishing and paid media growth in Q3

Taking a closer look at the Q3 figures for Better Collective, the affiliate reported growth across its two core businesses in the three months to 30 September. Revenue increased year-on-year within both its publishing and paid media segments.

Focusing on publishing first, revenue climbed 17.4% to €48.5m, helped by ongoing growth across the Americas. This business covers owned and operated sports media as well as media partnerships. Traffic to these brands is mostly direct or through organic search results.

As for paid media revenue, this jumped 46.7% to €27.0m. Better Collective put this down to the transition in revenue share agreements, while it also noted particularly strong growth in the Americas.

On the topic of geographical performance, North America activities generated €22.5m in Q3 revenue, up 24.3%. Revenue from Europe and the rest of world also increased – by 27.2% to €52.9m for the quarter.

Better Collective also reported a 27.0% increase in the number of new depositing customers (NDCs) to more than 445,000.

Higher costs hit bottom line

Looking at spending, Better Collective said that its costs were higher across the board. Main outgoings for the affiliate were revenue costs at €25.7m and staff expenses at €23.4m. Other spending in Q3 included €7.2m in financial expenses.

After accounting for all costs, Better Collective was left with a pre-tax profit of €5.1m, down 43.3% from last year. The affiliate paid €2.0m in tax on profit and a further €1.8m in income tax.

It also noted a positive €8.1m currency translation of non-current intercompany loans. This meant bottom line, net profit was €10.2m, some 53.4% behind last year’s €21.9m. However, EBITDA for Q3 was 35.3% higher at €19.6m.

Guidance upped for full-year

As to how Q3 impacted year-to-date performance, revenue for the nine months through to 30 September was 31.8% higher at €241.5m. Publishing revenue jumped 26.1% to €161.2m and paid media 45.0% to €80.3m.

Costs were higher across all areas for the reporting period, but such was the level of revenue growth that pre-tax profit was 23.1% higher at €44.3m.

Tax on profit was €12.0m and income tax €671,000. Better Collective also reported a €3.0m positive currency translation of non-current intercompany loans, but this was much lower than €43.3m last year.

As such, net profit was 42.8% lower at €35.2m. On the flip side, EBITDA increased by 63.5% to €81.6m for the period.

Looking to full-year guidance, revenue is expected to be between €315.0m and €325.0m. This is higher than the previously stated range of €305.0m to €315.0m. In addition, EBITDA is set to hit between €105.0m and €115.0m, up from earlier guidance of €95.0m to €105.0m.

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