• Revenue Growth: 14% growth for 2024, driven by M&A and solid growth in Europe, Canada, and Esports.
• Q4 Revenue Growth: 13% increase in Q4 2024.
• EBITDA Growth: 2% increase in 2024, with a EUR2 million rise.
• Q4 EBITDA Growth: 14% increase in Q4 2024.
• Recurring Revenue Growth: 28% growth in Q4 and 21% for the full year 2024.
• New Depositing Customers (NDCs): 1.8 million NDCs in 2024, with 81% on revenue share agreements.
• Brazil Revenue: Over EUR70 million in 2024, primarily from revenue share income.
• 2025 Revenue Guidance: EUR320 million to EUR350 million.
• 2025 EBITDA Guidance: EUR100 million to EUR120 million.
• Free Cash Flow Guidance for 2025: EUR55 million to EUR75 million.
• Net Debt to EBITDA: Expected to stay below 3x.
• Esports Revenue: Over EUR20 million in 2024, mainly from advertising and sponsorships.
• Cost Efficiency Program: Expected EUR50 million in cost savings for 2025.

• Warning! GuruFocus has detected 7 Warning Signs with BTRCF.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Better Collective AS (BTRCF) reported a 14% growth in 2024, driven by mergers and acquisitions and solid growth in Europe, Canada, and Esports.
• The company achieved a 28% growth in recurring revenue in Q4 and 21% growth for the full year of 2024, indicating strong financial performance.
• Better Collective AS (BTRCF) successfully implemented a cost efficiency program, resulting in a 14% growth in EBITDA for Q4.
• The company strategically positioned itself in the Brazilian market by acquiring Playmaker Capital, becoming the largest digital sports media group in the region.
• Better Collective AS (BTRCF) is focusing on organic growth, safeguarding cash flow, and maintaining financial agility to capitalize on future opportunities.

Negative Points

• The company faced challenges due to the Google policy update and a slowdown in Brazil, impacting financial performance.
• New online gaming regulations in Brazil, effective January 1, 2025, are expected to impact revenue due to new taxes and player churn.
• The US market showed flat growth, affecting the group's overall organic growth.
• Better Collective AS (BTRCF) anticipates a challenging year in 2025 with an expected EBITDA impact of EUR35 million to EUR50 million due to Brazilian market changes.
• The company had to let go of over 300 employees, representing 15% of its workforce, as part of its cost efficiency program.

Q & A Highlights

Q: Can you provide more details on the free cash flow guidance and expected CapEx for 2025? A: Flemming Pedersen, CFO, explained that the free cash flow guidance includes interest and tax payments, as well as payments to partnerships. It excludes debt payments and earnouts. The expected CapEx will primarily involve new media partnerships and payments to existing ones.

Q: What are your expectations for organic growth in 2026 and beyond? A: Jesper Soegaard, CEO, stated that the main focus for 2025 is the rebasing of the Brazilian business. They expect to return to organic growth in 2026, driven by their strong market position in Brazil and other strategic initiatives.

Q: Can you clarify the expected impact of the Brazilian market changes on your 2025 guidance? A: Jesper Soegaard noted that the Brazilian market's new regulations will lead to a significant churn of existing players, impacting revenue. However, the remaining players are expected to have higher lifetime values, and the market is anticipated to stabilize and grow from 2026 onwards.

Q: How do you plan to approach capital allocation, given the current market conditions? A: Jesper Soegaard mentioned that Better Collective will prioritize organic growth, debt reduction, and share buybacks over M&A in the near term. They aim to enhance financial flexibility and drive long-term shareholder value.

Q: What is your strategy for the US casino market, and how does it fit into your overall business model? A: Jesper Soegaard explained that Better Collective is actively engaging with the US casino market through revenue share agreements and content creation. While sports betting remains the primary focus, the casino segment is seen as a complementary product with significant growth potential.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.