Better Collective Reports Revenue Growth in Q3 2024 

EBITDA 14% Up

Organic growth was down 6% due to lower than expected partner activity in the U.S. and an accelerated slowdown in Brazil where the market expects new regulations in 2025.

Recurring revenue was up 14% to €53m, 65% of total revenue, and EBITDA (excluding extraordinary items) was up 14% to €22m.

With market conditions changing fast Better Collective has implemented a cost reduction program to streamline the business and support long term growth.

U.S. and Brazilian Market Conditions Impact Q3 Performance

In the U.S. Better Collective saw a decline in partner activity which impacted overall revenue. Despite this Better Collective had success with revenue share agreements which sets the foundation for long term growth.

To adapt Better Collective has started to restructure its North American operations to achieve a minimum EBITDA margin of 20% and over 35% by leveraging increasing revenue share deals.

In Brazil which accounts for around 20% of group revenue Better Collective felt the impact of declining activity among international sportsbooks who are waiting for official regulations to come into effect in early 2025.

U.S. Market: Challenges and Long-Term Strategy

Despite the recent setbacks Better Collective sees the U.S. market as an attractive and high growth opportunity and is confident in the long term.

Since entering the U.S. in 2019 Better Collective has maintained healthy margins but the Q3 2024 decline in partner activity impacted the results.

The U.S. market is evolving and is full of changes and Better Collective is moving from cost-per-acquisition (CPA) revenue models to revenue share agreements to ensure long term financial stability but this shift has impacted short term revenue.

Jesper Søgaard, co-founder and CEO of Better Collective, assured that the changes the company has encountered do not indicate a structural shift in its business model.“I have been asked whether the changes we have encountered represent a structural shift to our business model. I want to assure you that it does not,” he said.

Better Collective’s U.S. operations have a data pool of over €155m under revenue share agreements with around €120m to be recognized. This big base will continue to grow as revenue share goes forward. In 2025 Better Collective will recognize around €10-15m from pure revenue share in the U.S. and will be well established in the U.S. market.

Workforce Restructuring for Long Term Stability

In response to the changing market Better Collective launched a cost reduction program of over €50m. As part of this program the company announced redundancies of over 300 employees, 15% of the workforce, at the end of October following its Q3 review.

The redundancies and operational cost savings are part of a bigger effort to streamline the business, to align with recent acquisitions and the current market.

“It was a tough decision but the redundancies were necessary for long term stability and profitability. The decision to streamline our operations comes against the backdrop of 35 acquisitions, as the complexity introduced by such rapid expansion has made it essential to find efficiencies and optimize our structure. Furthermore, the changed market outlook makes it important to readjust. Regrettably, as part of this process, more than 300 valued colleagues have left our team post Q3, representing around 15% of our workforce,” remarked Søgaard.

The restructuring is largely complete and Better Collective will benefit fully from the cost savings by early 2025.

Although Better Collective lowered its 2024 guidance Better Collective is still on track to meet its 2023-2027 goals of 20% revenue growth, EBITDA margin of 35-40% (excluding extraordinary items) and net debt to EBITDA below 3.