Raketech has posted a third consecutive record revenue total of €21.5m in the third quarter of 2023, driven by an all-time high organic growth rate of 66%.
The Malta-based affiliate business also raised EBITDA by 16.5% year-on-year, attributed to development of its Japan-facing Casumba brand and growth within its network offering, referred to by the company as sub-affiliation, both in the Nordics and RoW.
Network the star
Revenues from sub-affiliation grew 264% YoY to €11.1m supported by an uptick in new client onboarding and a twofold month-over-month increase in NDCs. Sub-affiliation includes its AffiliationCloud SaaS platform, winner of the Best Tech for Affiliates in the 2023 iGB Affiliate Awards. The lower margin nature of this segment however had “a somewhat dampening effect on the group EBITDA” in Q3, admitted CEO Oskar Muhlbach.
Muhlbach emphasised that the performance had been underpinned by stable growth with its higher-margin core segment of conventional affiliate marketing. There its flagship strategy of refocusing on fewer, more-established brands was credited with helping generate increased 3Q23 revenues of €9.5m versus €8.6m in the comparable quarter last year.
Casumba clarity
Adjusted operating profit however tumbled to €2.3m from €2.9m impacted by non-cash amortisation associated with adjustments to earnout commitments on the Casumba deal.
The Nasdaq First North-listed business said today that the largest part of the contingent consideration for Casumba was due to be calculated in December this year, meaning they could then “with a high degree of certainty” determine the majority share of the earnout.
Geo challenges
From a geographic perspective, market dynamics in the Nordics proved slower than expected. Muhlbach revealed the company continued to invest there. “During the quarter we initiated our first-ever radio advertising campaign for Casinofeber.se on the Swedish market. Initial results look promising with a more than 50% increase in direct traffic, and in the long term, we hope the branding effect will also spill over to organic rankings.”
The US also lagged expectations, despite a pick-up towards the end of the quarter. Several technical initiatives went live during Q3 including an AI-driven Pick Prediction product and a more sophisticated CRM platform, and additional expertise was hired within SEO and product management.
Race to the finish
The company reiterated earlier guidance that it expected to close 2023 with EBITDA in the range of €23-25m with net cash of €13-15m, and to beat previous guidance on revenue by coming in between €65-70m.