In a year marked by soaring ambitions and strategic investments, Better Collective has outstripped its financial targets, reporting a robust 21% increase in year-on-year revenue—a notable follow-up to the impressive 52% growth achieved in the preceding year. The digital sports media group’s financial performance not only surpassed its revenue goal, set between €315m and €325m, but also showcased a significant climb in recurring revenue of 47%, reaching €189m.
With a flourishing performance that aligns seamlessly with its vision of being at the forefront of digital sports media, Better Collective saw its EBITDA before special items advance by 31% to €111m. This commendable figure nestled comfortably within the higher spectrum of its projected €105m-€115m range. Moreover, the EBITDA margin stood at an enviable 34%, echoing the group’s prior target range of 30%-40%.
At the helm, Jesper Søgaard, the founder and chief executive of Better Collective, hailed 2023 as a year of profitable growth accentuated by collective efforts across various facets of the organization. Søgaard emphasized that the year was particularly distinguished for marking significant strides towards the company’s lofty ambition.
The company’s financial success was undeniable during the final quarter, with €85m in revenue, affirming its ability to achieve the targeted revenue for the year. Notably, the quality of revenue seemed to have improved, with recurring revenue in Q4 witnessing a 15% uptick at €47m.
However, it wasn’t all smooth sailing. The Q4 group revenue experienced a slight €1m dip compared to the same quarter in the previous year, and organic growth saw a 7% decline. Similarly, the company’s EBITDA before special items for Q4 fell by 16% to €30m, although the EBITDA margin of 35% was indicative of a strong finish within the bounds of the 2023 target range. The downtrend in EBITDA was attributed to the strategic shift towards a revenue share model in the US market.
January trading in the new year brought a 27% revenue decline to €27m—however, this was measured against the backdrop of an exceptionally strong month the previous year, attributable to the launch of sports betting in Ohio. Given the variability seen during quarters such as Q4 of 2023, Better Collective has decided to refrain from reporting trading figures for the first month of subsequent quarters.
Regarding customer acquisition, the fourth quarter saw a 17% decrease in new depositing customers (NDC), totaling 483,000. This was largely due to the high of 300,000 NDCs during the 2022 World Cup. Despite this drop, Better Collective reached a record-setting 1.9 million NDCs throughout the year, marking a 14% rise.
The financial health of the company was further bolstered by a robust cash flow from operations before special items, which stood at €38m, a considerable increase from Q4 2022’s €21m. By year’s end, the company’s capital reserves were impressive, with €122m comprising cash, financial assets, and unused credit facilities.
Post-Q4, Better Collective finalized the acquisition of Playmaker Capital for €176m, sealing its second-largest deal ever and strengthening its North American presence while establishing a commanding position in the South American market. Following this strategic move, the company refined its financial targets for the period from 2023 to 2027, lifting its EBITDA margin before special items target to a range of 35%-40%, from the previously anticipated 30%-40%.
In the wake of these developments, Better Collective announced a substantial shareholder, BLS Capital Fondsmæglerselskab A/S, owning 6.7% of voting rights. The group also garnered recognition by being listed on Nasdaq Stockholm and Nasdaq Copenhagen.
With a fortified financial framework, Better Collective has uplifted its fiscal outlook for 2024, setting ambitious targets of €390m-€420m in revenue, which would imply growth of 19%-29%. The company is also aiming for an EBITDA progression of 13%-22%, generating between €125m-€135m, and maintaining net debt to EBITDA comfortably below 3x.
Despite expecting the acquisition of Playmaker Capital to initially yield flat revenue and earnings in 2024, Better Collective is confident that the long-term benefits will be substantial, and that they will indeed ‘ramp up over time.’
