Raketech reports a significant 50% revenue decline during Q1 2025.
*Raketech, a Maltese iGaming affiliate powerhouse, experienced a significant drop in first-quarter 2025 revenues, dipping to €9.8 million compared to €19 million in Q1 2024. This fallout was influenced by various factors, including the sale of a consulting division and a shift away from SEO.
The downward trend was exemplified in the adjusted EBITDA, which plummeted from €5.1 million to €2.4 million, and net EBITDA slipping from €4.3 million to €2.1 million.
Major Pain Points:
- Underperforming Casumba Japan: Raketech's Casumba branch, part of the Affiliation Marketing cluster, faced weak earnings, dragging down the overall revenue.
- Troubled Paid Publisher Network: Raketech's paid traffic sources saw a sharp plunge, attributed to external factors like algorithm changes.
- Losses from US Affiliate Sites: Unprofitable US sites focusing on paid tips and subscriptions were a drag on EBITDA, worsening the financial slump.
Response Strategy:
- Restructuring and Cost-cutting: Despite the setbacks, Raketech managed to complete a restructuring process and reduced operating costs (exclusive of publisher costs) by 34%. This move generated €1.7 million in free cash flow before liability payments.
- AffiliationCloud Focus: The company is leaning heavily on its AffiliationCloud platform, integrating its content sites, affiliate projects, and a SubAffiliation network of publishers. Half of the revenue from its core Affiliation Marketing segment derives from collaborations with external SEO teams and content creators.
- Casumba Agreement Revision: On May 6, the terms of Raketech's Casumba acquisition were revamped, pushing the final €20.6 million earn-out payment to March 2028 and eliminating the share payment option.
- Organic Traffic Growth: The SubAffiliation network brought in €3.4 million, while organic traffic has strengthened, with 80 active publishers (up from 50 a year ago) and new exclusive deals with operators.
CEO Johan Svensson comment:
Q1 2025 marked a period of strategic consolidation and operational focus for Raketech. Though we witnessed a revenue decrease year-on-year, we have made strides in repositioning the business around our platform-centric model and long-term growth objectives. With AffiliationCloud now at the heart of our operations, along with financial improvements from strategic decisions, we are optimistic about our potential to scale efficiently and create sustainable value.
Raketech is striving for long-term, reliable traffic through strategic partnerships and organic channels. The company also aims to diversify into content formats like sports event TV guides, minimizing exposure to turbulent SEO trends. Despite the present circumstances, Raketech remains positive about its ability to bounce back and grow through platform innovation and strengthened affiliate relationships.
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- Raketech, a Maltese affiliate company in the finance and technology industry, aims to secure long-term, sustainable growth by focusing on strategic partnerships and organic traffic channels, while also considering diversification into content formats like sports event TV guides.
- In an attempt to minimize exposure to unstable SEO trends and improve its financial standing, Raketech is repositioning its business around a platform-centric model, with AffiliationCloud at the forefront of operations, following a period of strategic consolidation and operational focus.
- In Q1 2025, despite underperformance in various segments such as Casumba Japan, the paid publisher network, and US affiliate sites, Raketech has managed to implement cost-cutting measures and generate free cash flow, as well as making strategic decisions like revising terms of the Casumba acquisition and growing its SubAffiliation network organically.
- The submarine network brought in €3.4 million, and with 80 active publishers, organic traffic has grown substantially compared to a year ago, providing new exclusive deals with operators and offering opportunities for potential bounce-back and growth within the industry.
