Better Collective (BETCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 8% to €81 million, but organic growth declined 6% due to US and Brazil headwinds.

• EBITDA before special items rose 14% to €22 million, with a margin of 28%.

• The first financial guidance downgrade since IPO was issued, reflecting lower expectations in key markets.

• A €50 million+ cost reduction program was initiated, including layoffs of over 300 employees (15% of workforce).

• Long-term growth targets and M&A ambitions remain unchanged despite short-term challenges.

Financial highlights

• Recurring revenue increased 14% to €53 million, now 65% of group revenues, mainly driven by M&A.

• Net profit after tax for Q3 was €1.1 million; YTD net profit €19 million.

• Cash flow from operations before special items was €32 million; cash conversion rate 131%.

• North American revenue exceeded €100 million since 2018, with strong margins even before revenue share build-up.

• Estimated €120 million in unrecognized US revenue share to be reported in future years.

Outlook and guidance

• 2024 revenue guidance revised to €355–€375 million (previously €395–€425 million); EBITDA guidance to €100–€110 million (previously €130–€140 million).

• Long-term 2023–2027 targets: revenue CAGR +20%, EBITDA margin 35–40%, net debt/EBITDA below 3x.

• US business targeted for minimum 20% reported EBITDA margin and 35% pro forma margin including revenue share build-up.

• Pure US revenue share income expected at €10–€15 million in 2025, with further growth anticipated.