Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Raketech Group Holding PLC (OSTO:RAKE, Financial) achieved cost savings of 18% in Q3 compared to Q1, excluding publisher costs.
- The company has successfully formed two strategic partnerships within affiliation marketing and several exclusive partnerships within subaffiliation.
- AffiliationCloud, Raketech's in-house developed subaffiliation platform, continued to deliver year-on-year organic growth.
- The digital tipster business experienced 24% organic growth year-on-year, adjusted for the divested assets.
- Raketech has a flexible approach to settling its remaining earnout obligations, with options to settle in cash or shares up until September 2026.
Negative Points
- Raketech Group Holding PLC (OSTO:RAKE) reported a 39.9% organic decrease in revenues for Q3.
- Adjusted EBITDA decreased by 44.6% year-on-year, indicating significant financial challenges.
- The company faces operational challenges with its publishers, particularly due to external factors like Google ad campaigns.
- The Swedish gambling tax increase from 18% to 22% has negatively impacted investment willingness and revenue share databases.
- Visibility remains limited for achieving the lower end of the full-year guidance for adjusted EBITDA due to ongoing operational challenges.
Q & A Highlights
Q: Can you provide insights on the start of Q4, considering October's performance and any improvements in November?
A: October's revenue was EUR4 million, with a notable drop due to the sale of ATS Advisory and challenges in the Raketech Network. Some improvements have been observed, but we are not back to last year's levels. - Johan Svensson, CEO
Q: Regarding subaffiliation operator challenges, do you foresee any improvements or resolutions?
A: The situation is somewhat out of our control, but we maintain strong relationships with publishers and operators, ready to scale up when market conditions improve. - Johan Svensson, CEO
Q: Is it still possible to meet the lower end of your guidance, considering potential improvements in November and December?
A: It looks difficult at the moment due to limited visibility and ongoing operational challenges within the Raketech Network. - Johan Svensson, CEO
Q: Could you provide an outlook on the online casino market in Japan, especially concerning Casumba's recovery?
A: There are operational challenges, including issues with payment providers. Despite high demand for traffic, we haven't fully recovered from the Google core update earlier this year. - Johan Svensson, CEO
Q: How does the increased Swedish gambling tax impact your operations and market outlook?
A: The tax increase has affected our revenue share databases, leading to more conservative investments by operators. However, Sweden remains a crucial market with strong operator relationships. - Johan Svensson, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
