Better Collective Revenue Drops 13% With Strugges In Brazil And The US

Better Collective has reported a significant decline in year-on-year revenue, revealing a 13% drop in Q1, bringing total revenue to €83 million ($93 million). Concurrently, EBITDA fell by 24%, settling at €22 million compared to Q1 2024.

Despite these decreases, the Danish-based gambling affiliate remains optimistic, maintaining its revenue projection for 2025 at €320–€350 million, with EBITDA expectations of €100–€120 million. The results were published on May 21.

Last year, the company achieved a robust revenue of €386.7 million, setting high expectations for ongoing growth. EBITDA projections for this year align closely with 2024’s figures, anticipated to hover around €118 million.

In the Q1 report, Better Collective outlined its transformative strategy to realign its organizational structure with long-term strategic goals, stating, “By the end of April, we have embarked on a transformative journey to enhance scalability, focus, and global integration, transitioning to a model that supports our growth ambitions more effectively.”

Revenue Declines in North America

The North American segment saw a sharp revenue decrease, dropping by 32% to €23 million from €35 million in Q1 2024. Correspondingly, EBITDA plunged to €4.2 million, reflecting a 54% decline from €9.1 million in the same quarter last year.

• Approximately €5 million of this revenue drop is attributable to a boost received in Q1 last year from North Carolina’s sports betting launch.
• Additionally, a combined decline of €5–6 million was caused by reduced marketing expenditure by U.S. partners, culminating in lower customer acquisition.

Shifting from Cost Per Acquisition (CPA) deals to revenue-sharing models has resulted in deferred payments, affecting immediate performance metrics. The report indicated that while “North American business performed in line with expectations,” the lack of offsetting positives suggests a cautious outlook moving forward.

Impact of Brazilian Regulations

The introduction of regulated sports betting in Brazil at the start of the year has also influenced performance, leading to an estimated €7 million shortfall. Nonetheless, the company noted, “The shift towards a regulated market in Brazil has so far surpassed our expectations.”

New depositing customers (NDCs) totaled 316,000 for the quarter, representing a 30% decline year-on-year, largely due to Brazil’s bonus restrictions and slower acquisition rates. However, an upturn is anticipated later this year.

The report underscores the company’s positive long-term outlook for Brazil, emphasizing expectations for a return to growth by 2026. The statement concluded, “Better Collective anticipates the Brazilian market will regain its high-growth status, offsetting the short-term impacts observed during this transitional phase.”

Cost Efficiency Initiatives to Mitigate Losses

In light of market challenges, Better Collective has rolled out cost-saving measures projected to yield €50 million in savings. In Q1 alone, operational costs decreased by €5 million through substantial reductions in workforce and operational expenditures.

The company’s recent report highlighted its organizational restructuring, aimed at establishing three new global business units: Publishing, Paid Media, and Esports. This strategic pivot from a geography-based structure seeks to minimize complexity, eliminate redundancy, and implement best practices more efficiently across all markets.

Additionally, Better Collective has appointed Christian Kirk Rasmussen as Co-CEO, joining Jesper Søgaard in leadership. This partnership is viewed as a strong leadership duo prepared to steer Better Collective into a renewed growth phase.

The recent inclusion of Playmaker Capital in their results for February has also contributed positively, adding €7 million to revenue. The company aims to leverage better performance in both the U.S. and Brazil to offset the €176 million invested in 2023.

This quarter has been challenging for several gambling affiliate groups, including Raketech, Gentoo, and Catena, all of which reported declines. Conversely, Gambling.com has emerged as an exception, achieving record revenue numbers for Q1.

In summary, while Better Collective navigates a challenging landscape characterized by regulatory impacts and shifts in marketing strategies, its proactive measures and strategic outlook position it for potential recovery and growth in the upcoming years.