Operating profit, adjusted for costs related to re-structuring, dropped 47.4% year-on-year to €2m.
“Although these results are below expectations, they were largely influenced by the softer performance within affiliation marketing due to the unexpected magnitude of the Google update completed at the end of April,” said Raketech’s acting CEO Johan Svensson.
“We remain confident in our market-leading product offerings and see promising growth opportunities through our strategic initiatives in sports offerings, exclusive partnerships, and media deals.
“These efforts will position us well for continued growth in the coming years, and we remain committed to maximising shareholder value,” Svensson added.
Performance by business area
In the affiliation marketing sector, revenue experienced an 18.5% year-on-year decline to €8.8m, primarily attributed to the Google update’s effect on the ’s Casumba assets.
Raketech said efforts are underway to address this challenge, including SEO recovery strategies and content quality improvements.
Despite being a lower-margin business area, sub-affiliation demonstrated a nearly 150% year-on-year revenue increase to to €9m, driven by improved revenue share with partners.The betting tips and subscriptions segment saw a 14.9% year-on-year decline to €1.2m following the US sports high season. The company is reviewing its strategy with a focus on its subscription-based digital platform.
Review outcomes
The also said it has concluded a thorough operational review, reaffirming its strategic priorities and aligning resources with its long-term growth objectives.
Additionally, the firm has implemented efficiency measures and cost-cutting initiatives designed to optimise its operations and enhance profitability.
Strategic initiatives include reducing SEO dependency by leveraging high direct traffic products and enhancing marketing strategies, growing the sports vertical by monetising existing assets and focusing on affiliation revenues in the US, increasing customised partnerships, and broadening reach by expanding into new geographies.
Current trading & outlook
Current trading including April suggests an adjusted EBITDA of around €20m for full-year 2024.
April 2024 revenues remained flat compared to Q1 2023, at €5.9m.
Free cash flow before earnouts for the full year is estimated to be slightly below adjusted EBITDA.
To maintain “financial flexibility” and its “long-term growth ambitions,” Raketech opted to retract its previously announced proposal to distribute dividends in 2024.
