Q2 2023: Strong quarter driven by organic growth

QUOTE FROM OSKAR MÜHLBACH, CEO
“Raketech continued to deliver strong growth during the second quarter of 2023, with total revenues of EUR 17.6 million, another all-time high for the group, corresponding to an organic growth of 56% Y/Y. A particularly strong development within Sub-affiliation/Network was complemented by continued stable growth within high-margin Affiliation Marketing, resulting in an EBITDA of 5.5 million, up by 45% from the same period last year. Based on the strong first half of the year, we remain confident about our recently upgraded full-year guidance for 2023. Whereof revenues are expected to amount to EUR 65-70 million, excluding acquisitions, EBITDA is expected to come in between EUR 23-25 million and free cash flow is expected to increase to EUR 13-15 million.”

Q2 2023 FINANCIAL HIGHLIGHTS

• Q2 of 2023 reached an all-time high in terms of revenues, totaling EUR 17.6 million (EUR 11.3 million) with an organic growth of 56.0% (-4.0%).
  • A particularly strong development within Sub-affiliation/Network was complemented by continued stable growth within high-margin Affiliation Marketing, primarily driven by continued strong contributions from Casumba.
• Revenues from Betting Tips & Subscriptions were down by 6%, essentially in line with last year, somewhat impacted by currency effects.
• EBITDA, which grew by 45% Y/Y to EUR 5.5 million during the quarter, was positively impacted by the strong development in Casumba.
• The AGM approved a dividend to shareholders corresponding to EUR 0.094 per share. The first of two installments was distributed to the shareholders in May.

SUBSEQUENT EVENTS AFTER THE END OF THE PERIOD

• Revenues in July 2023 amounted to EUR 6.9 million (EUR 3.9 million).

CEO OSKAR MÜHLBACH COMMENTS ON THE QUARTER
Raketech continued to deliver strong growth during the second quarter of 2023, with total revenues of EUR 17.6 million, another all-time high for the group, corresponding to an organic growth of 56% Y/Y. A particularly strong development within Sub-affiliation/Network was complemented by continued stable growth within high-margin Affiliation Marketing, resulting in an EBITDA of 5.5 million, up by 45% from the same period last year. Based on the strong first half of the year, we remain confident about our recently upgraded full-year guidance for 2023. Whereof revenues are expected to amount to EUR 65-70 million, excluding acquisitions, EBITDA is expected to come in between EUR 23-25 million and free cash flow is expected to increase to EUR 13-15 million.

Revenues from Affiliation Marketing, our largest business area, accounting for 59% of total revenue, grew by 28%, primarily driven by continued strong contributions from Casumba. Furthermore, the Sub-Affiliation business area, providing SaaS solutions and club commercials to affiliates, had an exceptionally strong quarter, driven by favourable market development, with Latin America and the Nordics leading the way. Revenues from Betting Tips & Subscriptions were essentially in line with last year, somewhat impacted by currency effects.

EBITDA, which grew by 45% Y/Y to EUR 5.5 million during the quarter, was positively impacted by the strong development in Casumba. The EBITDA margin was 31.1%, compared to 33.6% in the corresponding quarter of last year, as an effect of the increased contributions from Sub-affiliation/Network, to the groups’ market and product mix.

During the quarter, AffiliationCloud, our affiliation infrastructure solutions as a service (SaaS) offering, continued to deliver according to our long-term operational plan even though revenue growth was somewhat soft and the business area still is small in absolute numbers, compared to our other business areas. We aim to accelerate growth during the last part of the year.

Our geographical position within Affiliation Marketing remained stable compared to last quarter. But as an effect of our Network business being particularly successful in Latin America and the Nordics our revenues from these markets increased more than others on group level.

The calculation period for the majority of the contingent considerations relating to the acquisition of Casumba is coming to an end in December. The calculation period is 18 months in total and considering there are only 5 months remaining, only exceptional events would lead us to change the provisioned amount for this part of the earnout significantly.

OUTLOOK
July revenues amounted to EUR 6.9 million (EUR 3.9 million), mainly driven by continued strong growth in Casumba and Sub-affiliation/Network.

Strengthened by the recent successful development in Casumba and Sub-affiliation/Network, I look forward to driving progress within our strategic growth initiatives, focusing on our flagship products, accelerated US growth and AffiliationCloud.

In conclusion, I would like to thank our strong dedicated teams across the globe, helping our clients to stay ahead of the game. I am confident that we are well-placed to leverage the opportunities ahead and position ourselves as the first choice in the growing iGaming affiliation market.

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, August 17, 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-q2-2023

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=2001424