Q1 2023: Record first quarter supporting full year guidance

QUOTE FROM OSKAR MÜHLBACH, CEO
“2023 started on a strong note for Raketech, with revenues totaling EUR 15.8 million, which is a new all-time high for the group, corresponding to 24.4% organic growth. The strong result was mainly generated within our core, high margin segment, Affiliation Marketing. Based on the successful start of the year, we remain confident around our full year guidance.”

Q1 2023 FINANCIAL HIGHLIGHTS

• Q1 of 2023 reached an all-time high in terms of revenues, totaling EUR 15.8 million (EUR 12.7 million) with an organic growth of 24.4% (6.8%).
  • The core portfolio of affiliation marketing increased to EUR 10.8 million (EUR 8.2 million), with exceptional results from Rest of World and a solid performance from flagship assets in the Nordics.
  • Additionally, the quarter showed significant growth from the expanding sub-affiliation offering, totaling EUR 3.6 million (EUR 2.5 million).
  • US revenues decreased to EUR 1.9 million (EUR 2.4 million), an effect of a somewhat unfavourable outcome in sport betting predictions related to the US focused subscription offering.
• EBITDA amounted to EUR 6.1 million (EUR 5.1 million), positively affected by a favorable market mix and immediate benefits of scale as a consequence of strong revenues.

SUBSEQUENT EVENTS AFTER THE END OF THE PERIOD

• Revenues in April 2023 amounted to EUR 5.9 million (EUR 3.8 million)

CEO OSKAR MÜHLBACH COMMENTS ON THE QUARTER
2023 started on a strong note for Raketech, with revenues totaling EUR 15.8 million, which is a new all-time high for the group, corresponding to 24.4% organic growth. The strong result was mainly generated within our core, high margin segment, Affiliation Marketing. Based on the successful start of the year, we remain confident around our full year guidance.

During the first quarter, we continued to pursue our strategy for profitable growth, leveraging on our diversified portfolio within Affiliation marketing, Sub-affiliation and Betting Tips & Subscriptions.

Revenues from Affiliation Marketing, our core, high-margin business, grew by 32%, with exceptional results from Rest of World, with Casumba and OnlineCricketbetting leading the way. Additionally, our flagship assets in the Nordics continued to deliver according to plan, which is comforting considering that Casinofeber since March is being operated entirely by Raketechs’ central team, post earn out.

EBITDA amounted to EUR 6.1 million in the quarter, corresponding to a 39% margin, positively affected by a favorable market mix and immediate benefits of scale on the back of strong revenue development.

Sub-affiliation also had a strong quarter with a revenue growth of 46%, setting another record for this business area. Affiliation Cloud, our affiliation infrastructure solutions as a service (Saas), continued to deliver progress according to expectations but the majority of the growth was attributed to strong results from Network sub-affiliation in first and foremost South America.

Revenues from our smallest business area, Betting Tips & Subscriptions were down with 31%, compared to the strong Q1 of last year, as an effect of lower results from our win-share component which is based on our sport betting predictions.

Efforts to accelerate affiliation in the US, where growth is expected to come by adding affiliation offerings to existing Pickster assets is progressing well, but somewhat at a slower pace than anticipated. During Q1 we enforced the US team with an MD and are in the midst of launching several initiatives to increase speed of delivery. Effects from these initiatives are expected to be seen by the end of the year and come into full effect as of 2024.

All in all, our share of revenues originating from Rest of world increased, and the total share of non-Nordic revenues during Q1 increased to 64%, while revenues in the Nordics increased by 7%.

As a consequence of the strong performance in Casumba, contingent considerations related to the acquisition increased during the quarter. As previously communicated, the remaining part of the purchase price is based on performance up until July 2024 and will be settled as from 2024 up until 2026. Overall, we are very pleased with the return on the investment in Casumba, which is well above our expectations in terms of growth and projected post earn out cash flow contributions.

OUTLOOK
Considering the strong start of the year, we are confident reiterating our previously communicated revenue guidance for the full year, excluding acquisitions, of EUR 60-65 million in 2023 and an EBITDA of EUR 20-24 million. Free cash flow is, in line with the guidance, expected to increase substantially to around EUR 11-13 million.

April revenues amounted to EUR 5.9 million, mainly driven by continued strong growth in Sub-affiliation, a solid start to the new quarter, further supporting our full year guidance.

Oskar Mühlbach, Group CEO

LINK TO REPORT
The full Interim Report is available on https://raketech.com/investors/

REPORT PRESENTATION
CEO Oskar Mühlbach and CFO Måns Svalborn will present the report in a conference call and webcast today, May 11, at 09:00 CEST. The presentation will be held in English and can be followed via both a conference call and an online audio cast, including a Q&A session open to all listeners at the end of the presentation.

If you wish to participate via webcast, please use the link below. Via the webcast, you are able to ask written questions.

https://ir.financialhearings.com/raketech-q1-2023

If you wish to participate via teleconference, please register on the link below. After registration, you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

https://conference.financialhearings.com/teleconference/?id=200750