Raketech endured a difficult Q3 after reporting double-digit slumps in revenue and adjusted EBITDA, and its share price dropped by nearly 24% at the time of writing.
The affiliate’s shares are trading at SEK4.9 (39p), down from opening at SEK5.7, and roughly SEK70m was wiped off the company’s market cap.
Revenue stood at €12.9m for the three months ending 30 September, a 40% year-on-year (YoY) slump, while EBITDA fell significantly by 46.5% YoY to €3m and adjusted EBITDA dropped 45% YoY to €3.1m.
The number of new depositing customers for the quarter was 38,437, a 49.1% YoY drop, while adjusted operating profit plummeted 79.4% to €479,000.
Management said the declines were because of the lingering effect of Google’s core update in May, Sweden’s GGR tax hike and “operational challenges” within its sub-affiliation arm.
In fact, sub-affiliation revenue tumbled by 50.8% from €11.m to €5.5m, with affiliation marketing revenue standing at €6.8m – down 28% YoY.
Betting tips and subscription revenue sunk 29% YoY from €933,000 to €661,000.
Sport revenue decreased 22.6% YoY to €2.4m and casino revenue plunged 42.9% YoY, leaving the figure at €10.5m.
Revenue in multiple markets dropped significantly, with the largest fall coming in the Rest of Europe region at 58% YoY to €464,000, while Nordics revenue nosedived 40.7% YoY to €5.9m.
Rest of the World revenue fell 39.9% YoY to €5.6m and revenue from the US dipped 15.1% to €945,000.
Despite the weaker performance in Q3, bosses said there was a “sequential improvement into November”, with the group forecasting Q4 adjusted EBITDA to be “slightly ahead” of Q3.
Commenting on the reporting period, Raketech CEO Johan Svensson reaffirmed that despite downturns in Q3, there were positives on the horizon.
“Affiliation marketing revenues declined 28%, with Casumba assets particularly affected by the Google core update earlier this year. Additionally, Swedish casino assets were affected by increased gaming taxes from July,” he said.
“Despite the substantial decline year on year, affiliation marketing revenues were stable between the months during Q3 and into October.”
He added: “SubAffiliation revenues declined by 51% impacted by the operational challenges within Raketech Network, which has been consistent for the entire industry throughout the quarter. Raketech Network began to stabilise after the quarter in October. AffiliationCloud continued to grow sequentially.
“We have continued our evaluation of all products and business areas to better position ourselves for sustainable, long-term growth and operational efficiency.”
The post Raketech’s shares down 24% after double digit slump in Q3 revenue first appeared on EGR Intel.