Quote from Johan Svensson, CEO “Q4 2024 revenues reached EUR 12.3 million, compared to a strong Q4 2023 of EUR 22.8 million (including EUR 1.3 million from the divested advisory business). Adjusted EBITDA for Q4 2024 amounted to EUR 3.2 million (EUR 6.0 million), while EBITDA was EUR 3.0 million (EUR 6.0 million), consistent with the trading update issued on 4 February 2025. Following a challenging year, we have thoroughly evaluated our Affiliation Marketing assets and their alignment with Raketech’s established commercial and operational strengths. This will enable the company to concentrate more on strategic partnerships, exclusive commercial agreements with operators and the development of AffiliationCloud.”
FINANCIAL HIGHLIGHTS
- Q4 2024 revenues reached EUR 12.3 million, compared to a strong Q4 2023 of EUR 22.8 million (including EUR 1.3 million from the divested advisory business). Adjusted EBITDA for Q4 2024 amounted to EUR 3.2 million (EUR 6.0 million), while EBITDA was EUR 3.0 million (EUR 6.0 million), consistent with the trading update issued on 4 February 2025.
- Free cash flow before earnouts for the full year 2024 totalled EUR 14.7 million, aligning with EBITDA. This ensures we can fulfil our upcoming earnout commitment of EUR 8.0 million, due by the first half of 2025, with EUR 3 million already paid in January 2025. The remaining earnout liability of EUR 20.6 million, payable after H1 2025, can be settled at our discretion anytime until September 2026.
- On February 4, 2025, Raketech announced that a non-cash impairment charge of EUR 48.5 million had been recognised in the fourth quarter of 2024, relating primarily to a reduction in the intangible book value of non-core assets acquired pre-IPO.
OPERATIONAL HIGHLIGHTS
- As part of our previously announced review of our operating model, we achieved cost savings of 29% in Q4 2024 (excluding publisher costs) compared to the first quarter of the same year.
- We have assessed our Affiliation Marketing portfolio to identify key opportunities for profitability and growth, forming four strategic partnerships with proven entrepreneurs. Approximately 50% of our affiliation marketing revenue is now already in strategic partnerships. Our partnership model leverages each party’s strengths. Raketech provides commercial agreements, sales, finance, reporting, data management and tech, while partners focus on entrepreneurialism, product development, content creation, SEO and execution.
SUBSEQUENT EVENTS AFTER THE END OF THE PERIOD
- As from this year going forward, we will report earlier and will as such adapt our trading update accordingly. This change aims to enhance the timeliness of our reporting. So far, performance for our Affiliation Marketing assets in Q1 2025 are in line with Q4 2024, but with somewhat overall lower revenues, as expected due to seasonality. SubAffiliation had a slower start in January compared to the end of the fourth quarter but is gradually picking up in February.
CEO COMMENT
Q4 2024 revenues reached EUR 12.3 million, compared to a strong Q4 2023 of EUR 22.8 million (including EUR 1.3 million from the divested advisory business). Adjusted EBITDA for Q4 2024 amounted to EUR 3.2 million (EUR 6.0 million), while EBITDA was EUR 3.0 million (EUR 6.0 million), consistent with the trading update issued on 4 February 2025.
Affiliation marketing revenues declined slightly from Q3 this year, primarily due to the performance of the Casumba assets. Excluding these assets, the remaining portfolio grew by 3% compared to the third quarter, driven by improved performance and favourable seasonality.
SubAffiliation showed steady improvement throughout Q4, recovering from the low point seen at the end of the previous quarter. While short-term visibility within Network (paid) remains somewhat uncertain, our relationships with operators and publishers remain strong.
Following a challenging year, we have thoroughly evaluated our Affiliation Marketing assets and their alignment with Raketech’s established commercial and operational strengths. This will enable the company to concentrate more on strategic partnerships, exclusive commercial agreements with operators and the development of AffiliationCloud.
Affiliation Marketing
Evaluation & Optimization: We have conducted a comprehensive review of our Affiliation Marketing portfolio to identify the most promising opportunities for profitability and long-term organic growth. This initiative has led to the establishment of four strategic partnerships with experienced entrepreneurs with a strong track record in managing affiliation assets and proven SEO capabilities.
Raketech’s Role, Leveraging Core Strengths: Our partnership structure, whilst retaining ownership, seeks to leverage each party’s core strengths. Raketech brings its commercial and operational expertise, enabling centrally managed commercial agreements, sales, finance, reporting, data management and tech. By focusing on what we do best, we are building an ecosystem that fosters efficiency, scalability, and long-term success.
Partnership Structure & Synergies: We have partnered both with founders from previous acquisitions and other entrepreneurs who has a successful track record of running affiliation marketing assets. These partners bring expertise in product development, content creation, and SEO strategy execution while minimising operational complexities.
Impact & Future Focus: These partnerships have and will continue to streamline our in-house operations. Additionally, centralising more resources at our headquarters in Malta has created a more efficient organisational structure. Looking ahead, these strategic partnerships will ensure a sharper focus and stronger performance whilst benefiting from retaining ownership. This should result in improved growth and sustained margin performance.
Since 2015, the Company has successfully maintained operating strategic partnerships in the Nordic markets, with the slot’s portfolio added last year with a presence in Southern Europe and Latin America.
We currently have almost 50% of our affiliation marketing revenue in partnerships. We continue to explore other partnership opportunities and improve the performance of the assets managed in-house. In particular, we are focused on the performance of the Casumba assets, where performance remains challenging in Q4 compared to the previous quarter, with somewhat lower revenues. The leadership team, including the founders, remains focused on returning these assets to growth.
SubAffiliation
Network (paid): The Network business area experienced positive momentum despite slightly lower overall revenues compared to the previous quarter. Performance steadily improved each month throughout the quarter, however still not on par with levels seen in the first half of 2024.
AffiliationCloud: AffiliationCloud continued to deliver 74% organic growth compared to last year, building on the success of our exclusive commercial agreements with operators established in 2024. These agreements, where we manage operators' affiliation marketing, remain an important strategic focus for 2025.
Platform Investments & Migration: We continue investing in our platform, with plans to start migrating the Raketech Network business to AffiliationCloud in Q1. This transition will significantly enhance operational efficiency and broaden our ecosystem. We see a significant opportunity to expand our SubAffiliation business by securing exclusive agreements with operators and by providing a diverse group of publishers access to the deals Raketech negotiates with its extensive network of operators. We expect to be able to share our more detailed ambitions for AffiliationCloud in connection with the Q1 Report.
Betting tips and Subscription
Post-Sale Strategy: Following the sale of our land-based tipster business in the US, we have been focused on improving conversion rates and monetisation for our digital tipster platforms. While traffic volumes remain strong, we have not yet fully realised our expected outcomes.
Strategic Review: Given the relatively small scale and non-core nature of the US Tipster & Subscription business, we began a strategic review in January. A final decision on the future of this business area will be made by the end of Q1.
Cost Savings & Streamlined Operations
Centralised Operations and Streamlined Asset Management: Consolidating resources at our new Malta headquarters has resulted in cost savings and improved operational efficiency. Managing fewer assets in-house will reduce our operational overhead, further improve our focus, and drive overall performance.
Conclusion & Next Steps
This update emphasises our ongoing efforts to optimise operations, strengthen strategic partnerships, and capitalise on the growth opportunities in Affiliation Marketing and SubAffiliation. Our strategic partnership-driven model in Affiliation Marketing continues to unlock scalability and efficiency, allowing us to team up with experienced entrepreneurs. Meanwhile, AffiliationCloud is evolving into a key driver of growth in SubAffiliation, with our continued investment in the platform expanding both operational efficiency and market reach.
We recognise the challenges in the current environment but remain fully committed to strategic clarity as we execute our objective of delivering sustainable long-term growth and value creation. Our priority is delivering results, and we look forward to providing a strategic update in connection with the Q1 Report, which will include insights into our growth strategy, financial outlook, and key milestones. Additionally, we will finalise our decision on the US Tipster & Subscription business by the end of Q1.
Johan Svensson, CEO
LINK TO REPORT
The full Interim Report is available on https://raketech.com/investors/
REPORT PRESENTATION
CEO Johan Svensson and CFO Måns Svalborn will present the report in a conference call on Wednesday, February 19, 2025, at 09:00 CEST.
The presentation can be followed via both a conference call and an online audio cast, including a Q&A session open to all listeners at the end of the presentation.
If you wish to participate via webcast, please use the link below. Via the webcast you are able to ask written questions.
https://raketech.events.inderes.com/q4-report-2024
If you wish to participate via teleconference, please register on the link below. After registration, you will be provided with phone numbers and a conference ID to access the conference. You can ask questions verbally via teleconference.
