Better Collective AS has declared a ‘record financial performance’, attributed to outstanding US growth that has surpassed all management expectations. 

Publishing its Q1 trading update (period ending 31 March), the Stockholm-listed media publisher registered corporate revenues of €67m, up 74% on corresponding 2021 results of €39m.

Topline growth was attributed to US market gains, that delivered ‘46% of group revenue in the quarter, a 5x compared to Q1 2021, supported by the opening of New York state and the signing of a media partnership with New York Post’.

A breakdown of unit performance saw Better Collective’s Publishing segment double its period revenues to €48m (Q12021: €23m), led by the organic growth of its proprietary online portals and the optimised performance of media partnerships with NY Post, NJ.com and The Daily Telegraph.

The publisher’s Paid Media segment registered a 27% increase in revenues to €19m (Q12021: €14.5m) – as the unit adopts revenue share and hybrid revenue contracts on key accounts over its previous CPA model.

Period trading saw Better Collective’s network register 360,000 New Depositing Customers (NDCs) (up 95%), of which 230,000 were on revenue share contracts.

“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 67 mEUR which was driven by a record intake of new depositing customers and an all-time high gross gaming on revenue share accounts,” commented Jesper Søgaard, Co-Founder & CEO of Better Collective.

Bottomline results saw Better Collective declare a Q1 trading EBITDA of €23m, up 75% in Q1 2021 comparatives of €13m – figures that reflected a corporate EBITDA margin of 34% (Publishing 42% and Paid Media 15%).

EBITDA growth was maintained against Better Collective’s revenue share being impacted by ‘lower than expected sports win margin within certain geographies.’

Better Collective’s cash flow from operations stood at €13m reflecting a decrease of 18%, which the publisher attributed to ‘temporary impacts on working capital due to its high revenue performance in the quarter’ due to 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% 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.”

Period trading saw Better Collective execute the acquisitions of FIFA e-sports gaming community Futbin for €113m (its second-biggest M&A), alongside Canada Sports Betting for €22m, expanding its North American media network.  

In connection with the transactions, Better Collective has updated its financial targets for the full year 2022 for operational earnings (EBITDA) to approximately €85m above its previous guidance of €75m.

Better Collective notified investors: “With the publication of the Q1 report the financial target for revenue growth is updated and is now expected to be 20-30% (previous 15-25%). 

“The financial target relating to debt leverage remains unchanged <3.0x. In the update, the low sports win margins seen over the last 9-12 months have been taken into account for the rest of 2022 with an expected dampening effect.

“With the US market growing in relation to the rest of the business and with the addition of FUTBIN, seasonality is increasing significantly with the majority of the group’s business activities being in Q4 followed by Q1.”