Revenue share affiliation was the largest source of Better Collective’s revenue, bringing in €11.8m, down 0.2% year-on-year. The business said it saw record wagering activity on its revenue share accounts, but as most of this betting was low-margin, the amount distributed to Better Collective slightly declined, and added that it would have made an additional €2m had margins been at average levels.
“After a couple of months significantly impacted by cancellations and postponements, we are excited to see activity back at “pre-Covid levels, even though almost half of Q3 was less active because of changes to sports calendars implying a later start of the major leagues than usual,” Better Collective chief executive Jesper Søgaard said.
Cost-per-acquisition affiliation brought in a further €2.5m, up 0.5%. However, while these remained the two largest sources of revenue, their share of the group’s overall revenue declined non-affiliate sources became more prominent.
Subscription revenue, meanwhile, grew 23.2% to €1.6m, while other revenue was up 54.6% to €2.4m.
Better Collective paid €2.4m in direct costs related to revenue, up 25.7%, plus €5.4m in staff costs, up 3.4%.
It paid a further €324,000 in depreciation costs, a 58% year-on-year increase, and €1.9m in other costs, down 30.7%, for an operating profit of €8.0m, up 17.6%.
After paying amortisation costs of €6.6m, Better Collective’s operating profit before special items came to €6.6m, up 20.0%.
Following special items, the affiliate’s income grew to €6.7m, and after accounting for a net financial loss of €126,000 – less than a quarter of its financial loss in 2019 – its pre-tax profit totalled €6.5m, up 45.8%.
The business paid €1.7m in tax for a final profit of €4.9m, 49.3% more than in 2019.
Søgaard said results for the past six months have largely been in line with what the business expected at the start of the pandemic, when it opted not to lower its earnings guidance.
“I am very proud of the way we are steering the business during these difficult times, and that we can maintain our full year financial guidance considering these unusual circumstances,” he said.
Immediately after the quarter ended, Better Collective announced that it had completed the acquisition of pay-per-click specialist Atemi Group in a deal worth £40m (€44.1m/$51.8m), allowing it to significantly grow its presence in this space, as well as social media where Atemi is an approved advertiser.
“This acquisition is a very important step for us to reach our strategic target of becoming the leading sports betting aggregator in the world,” Søgaard said. “Atemi Group has been on an impressive growth journey since the company was founded in 2015, and has reached the large scale it takes to be competitive and profitable within paid media.
“The acquisition will immediately bring us in the absolute leading position when it comes to customer acquisition for the online operators, delivering premium traffic and high intent players.”
In the first half of 2020, Better Collective reported a year-on-year increase in revenue and net profit despite an 18% year-on-year decline in new depositing customers following the suspension of most major sports events.