Revenue for the three months to 30 September amounted to €45.4m, up from €18.3m in the third quarter of last year.
The affiliate’s publishing business, comprising Better Collective’s online platforms and media partnerships where online traffic comes directly or organic search results, was responsible for the majority of revenue, with this rising 77.8% year-on-year to €31.3m.
Better Collective said that this growth was higher than expected due to the performance of media partnerships and its US business, with the start of the new National Football League season in September contributing to US growth. The affiliate said it was also helped by its acquisition of the Action Network in May.
Revenue from paid media – covering lead generation through paid media and social media advertising – rocketed 1,796.8% to €14.1m as Better Collective continued to feel the impact of its acquisition of pay-per-click specialist Atemi in October of last year.
Better Collective also acquired Dutch online sports media brands Soccernews.nl and Voetbalwedden.net in Q3 as it sought to build its presence in the Netherlands ahead of the launch of the country’s new regulated gambling regime in October.
After the end of the quarter, Better Collective announced it had completed its acquisition of US-based RotoGrinders Network, purchasing the remaining 40% stake in RotoGrinders for a total price of €33.0m.
Looking at geographical performance, US revenue also increased by 453.9% to €14.4m, mainly due to the Action Network purchase earlier this year. ‘Rest of World’ revenue, covering all operations outside of the US, almost doubled from €15.7m to €31.0m.
Turning to costs, spending was up across all areas, with revenue expenses rocketing 558.3% to €15.8m – partly due to the Atemi deal – staff costs 107.0% to €11.8m and other external expenses 121.1% to €4.2m. Better Collective also noted €1.9m in amortisation expenses and €442,000 in depreciation spend.
However, it was net special items costs that impacted the affiliate the most in Q3, with this reaching €11.6m, compared to just €44,000 last year. These expenses were mainly due to earn-out costs related to previous acquisitions.
Higher costs led to an operating loss of €362,000, compared to a profit of €6.7m last year, while after including €601,000 in finance costs, this left a pre-tax loss of €963,000, down from a €6.5m profit in 2020. Earnings before interest, tax, depreciation and amortisation (EBITDA) after special items also declined 76.5% to €2.0m.
Better Collective paid €2.5m in tax, resulting in a net loss of €3.5m, compared to a €4.9m net profit at the end of Q3 in 2020.
“We are very satisfied with the development in the quarter, even though sports win margins have worked against us short term partly due to our own success in sending new customers at a much larger scale than ever before,” Better Collective co-founder and chief executive Jesper Søgaard said.
Looking at the year-to-date and revenue for the nine months to the end of September was 128.1% higher at €124.3m. Publishing revenue increased 58.5% to €81.3m and paid media revenue hiked 1,287.1% to €43.0m.
Costs were higher across the business, including within special items where spending hit €17.0m as a result of recent M&A activity. However, Better Collective was able to post an operating profit of €16.2m, down 12.9% year-on-year.
Financial costs reached €2.2m, leaving a pre-tax profit of €14.0m, a drop of 20.9% on last year, while EBITDA after special items fell 7.7% to €22.4m. The affiliate paid €7.5m in tax, resulting in a net profit of €6.5m, down 51.9% from last year.