Raketech Group (RAKE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was EUR 17.0 million, a 3.7% organic decrease year-over-year, with EBITDA at EUR 4.4 million, down 20.3% year-over-year and a margin of 25.8%.

• Sub-affiliation segment grew 29.7% year-over-year, while Affiliation Marketing declined 25.9%, mainly due to weaker Casumba and Swedish casino performance.

• A EUR 10.5 million impairment was recognized after the sale of the non-core US advisory business, resulting in a net loss of EUR 9.9 million for the quarter.

• July revenues were EUR 4.6 million, impacted by weak sub-affiliation performance and operational challenges among larger publishers.

• Strategic focus remains on strengthening the Casumba team, optimizing operations, and expanding exclusive affiliate partnerships.

Financial highlights

• Sub-affiliation revenues grew 29.7% year-over-year to EUR 8.2 million, now representing about 48% of total Q2 revenues.

• In-house operated assets saw revenues of EUR 7.6 million, a 25.9% decline year-over-year, mainly due to weaker Casumba and Swedish casino performance.

• Betting tips (US tipster sales) delivered EUR 1.1 million in Q2 revenue, up 15.9% year-over-year.

• Gross profit margin for Q2 was 21.3%, with sub-affiliation gross profit margin at 23%.

• Free cash flow before earnouts was EUR 2.7 million, lower than EBITDA due to timing effects, and is expected to normalize in H2.

Outlook and guidance

• Full-year 2024 adjusted EBITDA guidance narrowed to EUR 17–19 million.

• Free cash flow before earn-out expected just below EBITDA, providing flexibility for Casumba earn-out settlement.

• Q4 is expected to be a seasonally strong quarter.

• July 2024 revenue was EUR 4.6 million (vs. EUR 6.9 million last year), with expectations for improvement in the remainder of Q3.

• Revenue decline in Sub-affiliation expected to recover during the rest of the quarter.