Better Collective ‘never been better positioned’ after strong Q1 growth

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Better Collective is reporting “strong growth” in the first quarter of 2023 as the group continues to expand across North America, Latin America and Europe.

Commenting on the results during the group’s Q1 earnings call, CEO Jesper Søgaard stated the company has “never been better positioned and prepared for the future” with ambitions to become the sector’s leading digital sports media group.

For Q1, Better Collective declared a total group revenue of €88m, a 30 per cent increase year-over-year (Q1 2022: €67.4m) and a record-breaking quarter.

Group recurring revenues improved by 75 per cent YoY to €41m (2022: €23.4m), contributing 46 per cent of the total revenue for the period.

Reflecting on the results in Better Collective’s earnings call, Søgaard highlighted how the group’s strategy is paying off, stating: “We continue our strong focus on recurring revenue and are proud to see this grow 75 per cent year-on-year. 

“We are now also beginning to see encouraging developments in the US after changing parts of our business, from upfront payments, also called CPA, to now recurring revenue share.

“In Latin America, we have laid out a clear strategy for how to become the market leader just like we have done in Europe and North America. This is paying off as our strong growth continues.”

Breaking down the growth, CFO Flemming Pedersen noted that Europe drove 50 per cent of the revenue uptick, while North America accounted for 19 per cent whilst organic growth attributed for 23 per cent of the group-wide increase.

Pedersen also noted how revenue share contracts have contributed to Better Colective’s success, as well as earnings per share, which was up in Q1 by a record 52 per cent.

Better Collective reported a 35 per cent increase in new depositing customers to 488,000, and 71 per cent of these customers were acquired by revenue share contracts.

The group’s EBITDA before special items came in at €33m, a 44 per cent improvement (2022: €23m) with a margin of 38 per cent. Cash flow from operations before special items amounted to €33.4m (2022: €13.1m).

Looking ahead with regards to Better Collective’s business strategy, new long-term financial targets for the period 2023-2027 were established to aim for revenue CAGR of +20 per cent, EBITDA-margin before special items of 30-40 per cent and net debt to EBITDA below three.

During the earnings call, Søgaard noted that the company’s strategy won’t be adjusted following success in Europe and North America with those lessons now being applied in Latin America.

The CEO said: “Moving forward we will focus on utilising our Affiliation Foundation, as well as our other media capabilities. On top of this, we already have several media partnerships in the region. And we expect to sign more in the near future.”

Søgaard added that Better Collective’s M&A and organic expansion approach will not change either. During Q1, the group agreed to partnerships with digital soccer platform Goal, the Polish news portal Wirtualna Polska, and Nigeria’s leading news media, PUNCH.

The company also added further investment and development towards the in-house AdTech platform to target marketing ads directly to sports fans across their media and betting portfolio.

With full-year targets of revenue between €305m-€315m and EBITDA between €95m-€105m, Søgaard is confident that the company is in a good position to succeed.

“After another great quarter, I believe we’ve never been better positioned and prepared for the future as we expect to realise our vision of becoming the leading digital sports media group,” noted Søgaard.