Raketech Presents a Trading Update for the First Quarter 2024 and Revised Full-Year 2024 Guidance

Rhea-AI Summary

Raketech Group Holding Plc (NASDAQ:RAKE) provided a trading update for the first quarter of 2024 and revised its full-year 2024 guidance. Revenues for Q1 2024 are expected to be EUR 19 million, with adjusted EBITDA at EUR 5.1 million. The company revised its full-year guidance to an adjusted EBITDA of around EUR 20 million, lower than the previous estimate of EUR 24-26 million. Google's Core update impacted Casumba assets negatively, leading to the revision of the guidance.

Positive

• Raketech's in-house assets showed good performance, with positive results for sports products.

• Sub-affiliation saw a decrease in revenues but strong EBITDA contribution with increased margins and good partner engagement.

Negative

• Raketech's Swedish assets had a softer Q1 compared to the previous year, affected by seasonality, but with stable performance.

• The Betting tips and subscription business area experienced a slight decrease, prompting a review of the strategy for digitization.

Insights

Financial Analyst

The reduced revenue and adjusted EBITDA forecast by Raketech for the full-year 2024 appears to reflect current challenges in the digital marketing space. The reported EUR 19 million in revenue for Q1 2024, although higher than the previous year's EUR 16 million, may not be indicative of a positive trend due to the downward revision in annual guidance. The decline in EBITDA from EUR 6.1 million to EUR 4.3 million certainly warrants investor attention. The efficiency measures and focus on prioritized products could be a strategic move to improve cash flow and operational execution long-term. However, the negative impact from Google's Core update on the Casumba assets highlights the potential volatility in digital marketing reliant on search engine algorithms. A close watch on Raketech's next moves, especially concerning their underperforming Betting tips and subscription segment, is advisable.

Market Research Analyst

The digital marketing industry is known for its susceptibility to seasonal variances and dependency on tech giants like Google. The impact of the Google Core update, as mentioned by Raketech, exemplifies the risks associated with algorithm changes. It's important for investors to understand that entities operating in this space must constantly adapt to maintain their competitiveness. The stable performance of Raketech's Swedish assets and the positive uplift in sports products is a silver lining; however, the decrease in sub-affiliation revenues could signal a broader industry trend affecting future quarters. Investors should consider both the company's agility in adjusting its strategy and the broader market dynamics when evaluating the potential of their investment.

TRIQ I-IMSIDA IL-GZIRA, MALTA / ACCESSWIRE / May 1, 2024 / Raketech (STO:RAKE) Raketech Group Holding Plc (NASDAQ:RAKE) today issued preliminary results for the first quarter 2024 and revised its guidance for the full year 2024.

• Revenues for the first quarter of 2024 are expected to amount to EUR 19 million (EUR 16 million)
• EBITDA in the first quarter of 2024, adjusted for costs related to re-structuring, is expected to amount to EUR 5.1 million (EUR 6.1 million)
• Reported EBITDA in the first quarter of 2024 is expected to amount to EUR 4.3 million (EUR 6.1 million)

The company has decided to revise its full-year guidance:

• Current trading, including April, implies an adjusted EBITDA of around EUR 20 million for the full year, compared to the previous guidance of an EBITDA of EUR 24-26 million
• Free cash flow before earnouts for the full year is estimated to come in just below adjusted EBITDA

During the quarter, Google initiated an extensive Core update. The update was finalized towards the end of April, and we can, to date, conclude a net negative impact related to the Casumba assets, leading us to revise our previously communicated full-year guidance for 2024. The Casumba team is intact, with the original founders onboard, dedicated to continuing to run and oversee the strategy for these products.

Our Swedish assets had a softer first quarter compared to the corresponding quarter of last year, and somewhat impacted by seasonality compared to the previous quarter, but with a stable performance. Our other in-house assets showed good performance, with a positive uplift for our sports products.

Sub-affiliation decreased in revenues compared to the fourth quarter of last year, but EBITDA-contribution was strong, with an increased margin during the quarter and a continued good appetite from our partners.

Our smallest business area, Betting tips and subscription, decreased slightly compared to the previous quarter, coming out from the US sport high season. As previously communicated, we are reviewing our strategy for this area, including digitization of the tipster business.

During the quarter, we implemented efficiency measures following a review of our operating model, to ensure execution power with a better focus on prioritized products and markets and to optimize cash flow.

Raketech's full interim report for the first quarter of 2024 will be published as planned on May 15, 2024.

For more information, please contact:

investor@raketech.com

About Raketech Group

Raketech is a leading online affiliate and content marketing company, with expertise in delivering comparison services for sports and gaming, online guides, communities, and social media products. Raketech guides sports and gaming enthusiasts to the best possible services, while also delivering high-quality traffic and leads to its partners. Raketech grows both organically and via acquisitions and operates its business in accordance with a clear framework for responsible affiliate marketing services. The company's shares are listed in Nasdaq First North Premier Growth Market with ticker RAKE. Carnegie Investment Bank AB (publ) is the company's Certified Adviser. For more information, visit www.raketech.com.

This information is information that Raketech is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-05-01 22:20 CEST.

Attachments

Raketech presents a trading update for the first quarter 2024 and revised full-year 2024 guidance

SOURCE: Raketech

View the original press release on accesswire.com

FAQ

What are Raketech's revised full-year 2024 guidance figures?

Raketech revised its full-year EBITDA guidance to around EUR 20 million for 2024, lower than the previous estimate of EUR 24-26 million.

When will Raketech's full interim report for Q1 2024 be published?

Raketech's full interim report for the first quarter of 2024 will be published on May 15, 2024.

How did Google's Core update impact Raketech's business?

Google's Core update had a net negative impact on Casumba assets, leading to the revision of Raketech's full-year guidance for 2024.