Better Collective praises ‘strong’ US amid increasing growth target
Better Collective has cited “strong growth” across the US sector as part of a wider “record financial performance” as the company publishes its Q1 2022 interim report.
Lauding its US operations, the group noted that the North American sector delivered 46 per cent of total revenue in the three months ending March 31, which it states is five times more than during the same period last year.
Moreover, Better Collective noted that the above increase was supported by the opening of New York’s regulated space and the signing of a media partnership with the New York Post.
Jesper Søgaard, Co-Founder & CEO of Better Collective, commented: “2022 got off to a flying start with significant growth across business areas. Q1 showed very strong organic growth and a record quarterly revenue of €67m which was driven by a record intake of new depositing customers and an all-time high gross gaming on revenue share accounts.
“The US market is now the biggest market for Better Collective, and it is gradually reaching the same profitability as our European business. Our US business delivered prime results with revenues exceeding €31m in the quarter, which included the Super Bowl and March Madness.
“In New York state, which recently opened for online sports betting, Better Collective is off to a great start which was further accelerated by our media partnerships with the New York Post.”
Alongside its US growth, the firm also reported an overall increase in group revenue by 74 per cent to €67.4m (Q1 2021: €38.8m), as organic revenue growth was 44 per cent.
However, Better Collective noted that revenue share income was again affected by lower than expected sports win margin within certain geographies, partners and sports, however absolute performance was significantly improved due to strong NDC-performance in the recent year.
The group also noted that, over the last nine to 12 months it has witnessed “average lower sports win margins” for a third quarter in a row, citing specific regulatory changes and increased competitive bonus offers from operators.
Due to this continued low margin, the company stated it has built in lower margin expectations in the recent adjustment of its financial targets.
Bottomline results saw Better Collective declare a Q1 trading EBITDA of €23m, up 75 per cent in Q1 2021 comparatives of €13m.
Better Collective’s cash flow from operations stood at €13m, reflecting a decrease of 18 per cent, attributed to “temporary impacts on net working capital due to its high revenue performance in the quarter” as a result of changes to its publishing network’s income model.
Closing Q1 accounts, Better Collective declared profits after tax of €13.7m (Q12021: €8.3m), which sees the firm achieve 80 per cent of FY2021 profits of €17.3m.
“In addition to the high growth in the US, I was happy to see strong growth in LatAm, Media Partnerships and Paid Media,” Søgaard continued in his CEO statement.
“However, the March performance was lower than expected due to low sports win margin across the industry affecting revenue share income, while the absolute income from revenue share was sustained from strong NDC performance in recent quarters.
“There are certain external factors, including competitive marketing campaigns from operators and unfavourable sports results, that have affected our revenue share income negatively in the past 9-12 months.”
The CEO added: “However we remain positive that this will improve again and what excites me the most is our ability to deliver new valuable customers to our partners.”
Commenting on Russia’s invasion of Ukraine, the firm stated that the impact on its business is limited following its suspension of business activities related to the Russian market, with an estimated full-year effect on revenue and earnings to be approximately €1-2m
Moving forward, Better Collective notified its investors with an updated financial target for revenue growth that is now expected to be 20-30 per cent compared to its previous 15-25 per cent.