Raketech struggles continue with revenue down 42%
Dan
Kleiner
Editor
Raketech continued in its struggles during Q3, with the affiliate reporting diminished returns across its key metrics and regions.
The company posted a revenue total of €6.2 million (£5.5 million/$7.1 million) for the period between July and September for its continued operations, down 42% year-on-year, while down by 45.5% with discontinued operations considered.
On a similar note, adjusted EBITDA for continued operations was down by 4.2% to €1.2 million, with discontinued operations down by 42.4% in the same period. The affiliate’s adjusted EBITDA margin for the quarter was 19.6%, up from the 11.8% recorded in 2024.
Free cash flow dropped to €1.1 million from €3.8 million, a decrease of 71%, as cash flow used in investing activities amounted to -€400,000, primarily driven by a minority investment in a US sports betting and casino publisher.
New depositing customers fell by 63.5% in the quarter for Raketech, marking a 63.5% decline year-on-year, to 14,036. However, the figure was only slightly down from the 15,867 the company sent to operators in Q2.
The largest impact on these separate figures of continued operations came in September when Raketech divested the Casumba brand and its assets for a total consideration of €12 million to an unnamed buyer. The sale came amid Japan’s gambling crackdown that saw two arrests of Japanese locals engaging in affiliate activities. Originally purchased for €2 million in 2019, Casumba’s founders would have been due an additional €46.5 million from Raketech based on the uncapped earnout deal had the brand not been moved on.
Johan Svensson, Raketech CEO, did not directly comment on the decision behind the Casumba divestment in the report. However, he did note that “with a cleaner structure, stronger partnerships and growing momentum in our organic publisher network, Raketech enters the final quarter of the year with a sharper focus and enhanced flexibility to deliver on our platform-first strategy.”
Across the board struggles
The affiliate delivered an affiliate marketing revenue of €4.3 million, down by 6.7% year-on-year. However, with divested assets, the drop was slightly larger at 24.4%.
With a cleaner structure, stronger partnerships and growing momentum in our organic publisher network, Raketech enters the final quarter of the year with a sharper focus and enhanced flexibility to deliver on our platform-first strategy
Johan Svensson, Raketech CEO
Sub-affiliation was down by 65% from 2024 to bring in €1.9 million and by €100,000 from the company’s Q2 results of this year.
“The paid publisher network continued to decline in line with market dynamics and is contributing minimal new traffic,” said the CEO. “We continue to ensure that the cost base is sized appropriately for the more focused group.”
Casino-related activities fell by 47% in the quarter, down to €4.4 million, while sport-related activities dropped by 25.8% in the same period to €1.8 million across all regions.
In terms of payment models, revenue share grew in the quarter for Raketech by 15% to be responsible for 50.9% of group earnings, as flat fee payments also grew by 10.5%, while upfront payments decreased by 20%.
All of Raketech’s activities across its regions took a sizeable hit, with revenue from the Nordics down by 24.7% to €4.5 million, the rest of Europe by 33% to €311,000, the US by 30.1% to €660,000 and the rest of the world by 77.9% to €743,000.
World Cup hopes
Svensson acknowledged his wish to combine Raketech’s publishing assets with its sub-affiliation technology to “leverage both pillars commercially through bundled sales and exclusive commercial operator agreements”.
It is the hope that this will allow Raketech to set a strategy around event-driven opportunities like the FIFA World Cup 2026 next summer.