Better Collective is off to a ‘strong and exhilarating start’ for 2021, thanks to ‘record’ acquisitions and US regulatory developments, as the sports betting media company reported organic revenue growth of 19 percent in Q1.
Better Collective announced its financial results for the three months ended March 31, noting that revenue for Q1 increased by 86 percent to $47 million, up from $25.3 million in Q1 2020. Publishing accounted for 61 percent of sales, with Paid Media accounting for 31percent .
EBITDA for the year increased by 46 percent, from $11 million in 2020 to $16 million in 2021. Despite hitting a ‘all-time high,’ Better Collective clarified that “revenue was negatively impacted by the switch from CPA to revenue share in the Paid Media segment, and the lower than average sports betting margin.”
CEO Jesper Sgaard said of the findings: “Revenue growth in Q1 was strong compared to the same quarter last year and marks a record high. Strong April numbers resulting in a record month further underline the growth trend building on a strong finish to 2020.
“Sports wagering in our revenue share accounts was also at a record high continuing the trend from the previous quarter, while sports betting margins were just below average, offsetting revenues slightly.”
Better Collective highlighted its recent acquisitions of Mindway AI, The Action Network, HLTV, Rekatochklart, and Atemi, which it claims would help it “execute its strategy of becoming the leading sports betting media group.”
Better Collective’s cost base increased as a result of these acquisitions, as one would imagine. The cost base (excluding depreciation and amortisation) increased by $16.7 million to $31 million, with the acquisition of Atemi accounting for the bulk of the increase.
Improved US presence
With the acquisition of The Action Network, the sports betting media company will be able to improve its presence in the US industry, where it has already made a “strong start” in Michigan and Virginia.
Søgaard continued: “We consider Action Network to be the absolute best and most complete product in the US market, and we are thrilled to welcome Action Network and its employees to Better Collective.
“This acquisition, which is the largest in Better Collective’s history, gives us a leading position within sports betting media in the US, and creates a strong foundation for benefitting from the continuous regulation of the US betting market.
“Given the continued pace of new states regulating, Better Collective expects the US market to continue growing and our US revenues to surpass $100 million by 2022, with positive and increasing operational earnings. Market analysts expect the US sports betting market to expand >4x until 2025 and >20x in the next decade. This acquisition puts us in pole position to secure market leadership in this rapidly-growing market.”
Looking ahead, the CEO stated that Better Collective “remains committed to continuing industry consolidation through M&A,” and that the company’s financial goals for 2021 have been increased.
Sgaard expects overall group sales to reach $218.1 million (previously about $194 million), EBITDA to exceed $67 million (previously $60.6 million), and organic growth to exceed 25 percent. (previously 20 percent ).