Gentoo Media: Slight Q3 miss but reiterated FY sales guidance - ABG

- Pre-announces Q3 sales 5% below ABGSCe...
- ... and ~7% below on adj. EBITDA, but reiterating FY sales guidance
- Showing good resilience compared to peers

Q3 slightly below ABGSCe, but showing resilience compard to peers
Gentoo Media pre-announces Q3 sales and an adj. EBITDA range of EUR 30.4m and 46-48%, respectively, which can be compared to our current Q3 estimates of EUR 32.0m and an adj. EBITDA margin of 48%. As such, the pre-announced adj. EBITDA, assuming the mid-point adj. EBITDA margin, corresponds to a 7% miss to our estimates. Revenue came up 35% y-o-y, of which 4% organically assuming our current M&A contribution estimates. However, the acquired companies might have come in below our expectations as well, which would imply that the organic growth was even better. ~4% organic growth is of course a slowdown compared to previous quarters, but in the light of Betco's and CTM's recent big profit warnings for Q3, Gentoo is showing good relative resilience. Gentoo has a lot of recurring revenue, and are more tilted towards Casino, which we believe has held up better than the Sports Betting affiliate market.

FY sales guidance reiterated
Gentoo keeps its FY guidance of delivering EUR 125-135m, with an adj. EBITDA margin of 45-50%. To compare, we currently have EUR 128m in sales, and a margin of 49%. As such, the implied Q4 expectations from the company does not seem to have deteriorated significantly. Again, compared to e.g., Betco, Gentoo is looking more resilient and the management's execution remains strong.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/gentoo-media/Equity-research/2024/10/gentoo-media---slight-q3-miss-but-reiterated-fy-sales-guidance-/