Raketech Group (RAKE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined 39.9% year-over-year to EUR 12.9 million, with adjusted EBITDA down 44.6% to EUR 3.1 million and a margin of 24.1%, reflecting sector-wide challenges, divestment of the advisory business, and lower sales across all business areas.

• Cost-saving initiatives led to an 18% reduction in operating costs (excluding publisher costs) compared to Q1 2024, with headcount reduced by 25%.

• October revenue was EUR 4 million, a significant drop from EUR 7.7 million in October last year, mainly due to the Raketech Network.

• Free cash flow before earnouts increased to EUR 3.8 million, supporting upcoming EUR 9.9 million earnout payments.

• Strategic focus shifted to digital tipster assets after the sale of the land-based betting tips advisory business in July.

Financial highlights

• Q3 2024 revenue: EUR 12.9 million (down 39.9% year-over-year and 23.8% sequentially); nine-month revenue: EUR 48.8 million (down 11.0%).

• Adjusted EBITDA: EUR 3.1 million (down 44.6% year-over-year and 28.9% sequentially); nine-month adjusted EBITDA: EUR 12.5 million (down 27.1%).

• Free cash flow before earnouts: EUR 3.8 million in Q3 (up 21.3% year-over-year); EUR 13.1 million for nine months (down 4.9%).

• Sub-affiliation revenues were EUR 5.5 million, down 51% year-over-year, with a gross margin of 25%.

• Q3 operating profit: EUR 0.4 million; Q3 net loss: EUR 0.1 million; nine-month net loss: EUR 9.8 million.

Outlook and guidance

• Q4 2024 adjusted EBITDA is expected to slightly exceed Q3, but reaching the lower end of full-year guidance (EUR 17–19 million adjusted EBITDA) is unlikely due to ongoing operational challenges.

• Visibility remains limited, especially for the Raketech Network and the typically stronger second half of Q4 for casino and U.S. sports.

• Some improvement in traffic and revenue has been seen in Q4, but not yet at prior year levels.