Affiliate marketing network Raketech has released its financial results for FY2024, revealing a steep downturn in both topline revenue and profitability. The company reported a 23% year-on-year decline in revenue to €61.2 million, coupled with an operating loss of €55 million, a stark contrast to the €11.7 million profit achieved the year prior. The firm attributes these figures to a challenging year marked by margin pressure, increased operating expenses, and a shift in revenue mix. Despite the turbulence, management is optimistic about a turnaround, driven by cost rationalization and structural refinements introduced throughout 2024.

Revenue Contracts Sharply in FY2024

Raketech’s annual revenue fell from €79.5 million in 2023 to €61.2 million in 2024, a drop of 23% year-over-year, driven largely by a strategic pivot in its business model and volatility in its Sub-Affiliation operations.

Key highlights:

Total revenue: €61.2 million

Year-over-year change: -23%

Revenue in USD equivalent: $69.7 million

This contraction reflects not only industry-wide headwinds in affiliate marketing but also internal restructuring that altered the company’s revenue composition.

Operating Loss Widens 308% to €55 Million

The most eye-catching figure in the financial statement was the 308% decline in operating performance, resulting in an operating loss of €55 million in 2024. This compares to an operating profit of €11.7 million in FY2023, highlighting the extent of the fiscal setback.

Adjusted EBITDA dropped by 38.5% to €15.7 million, while the EBITDA margin compressed from 30.4% to 24%. The sharp decrease was driven by elevated costs and a shift in the revenue mix toward lower-margin businesses.

Cost Base Surges to €116.2 Million

While revenues dropped, Raketech’s cost base ballooned. Total operating expenses surged from €66.4 million in 2023 to €116.2 million in 2024, representing a 75% increase.

This disproportionate rise in costs relative to revenue severely impacted the company's bottom line, culminating in a net loss of €7.7 million, compared to retained earnings of €48.9 million just a year earlier.

This fiscal imbalance forced a reassessment of Raketech’s cost structure, leading to efforts in streamlining operations and preserving core capabilities.

Management Commentary Reflects Cautious Optimism

Raketech CEO Johan Svensson acknowledged the difficult year, but emphasized the corrective measures undertaken to stabilize the business. He noted:

“2024 has been a challenging year for Raketech, although the actions we have taken leave us well placed for a strong recovery moving forward.”

Svensson pointed to:

Realignment of the business in response to declining revenues

Reductions in the cost base to align with earnings

The increasing share of Sub-Affiliation revenue, which has lower margins but broader scalability

Profitability Mix Under Pressure Due to Sub-Affiliation Shift

One of the structural trends affecting Raketech’s margin profile is the growing share of Sub-Affiliation revenue, which contributed significantly to topline figures but carried thinner margins. This shift, while expanding reach, diluted overall profitability.

Svensson acknowledged that the margin compression is tied to this evolving business model, and suggested future efforts will focus on balancing scalability with margin resilience.

Leadership Changes and Strategic Alliances Define FY2024

Despite financial challenges, Raketech maintained momentum on the strategic front:

January 2024: Entered a three-year collaboration with Danske Spil, enhancing exposure to the Danish market

May 2024: Johan Svensson appointed CEO, bringing fresh leadership during a critical transitional phase

July 2025 (Upcoming): Chairman Ulrik Bengtsson to step down, following his appointment as CEO at another organization

These leadership shifts signal an ongoing evolution in governance and strategy, potentially setting the stage for operational recalibration and renewed investor confidence.

Looking Ahead: Rebuilding from a Position of Adversity

Raketech enters 2025 with a markedly different outlook than it had at the start of 2024. The business is leaner, more introspective, and committed to returning to profitability through disciplined capital allocation and selective growth initiatives.

Areas of focus moving forward:

Margin stabilization through improved cost controls

Expansion in regulated markets via strategic partnerships

Portfolio optimization, with a focus on higher-margin verticals

While 2024 marked a financial low point, the groundwork laid by executive leadership—particularly in operational efficiency and regional alignment—suggests a cautiously optimistic trajectory for 2025 and beyond.

Conclusion: A Year of Reset for Raketech

Raketech’s FY2024 report is a sobering reminder of the volatility inherent in the affiliate marketing sector. With declining revenue, spiraling costs, and net losses replacing prior-year gains, the firm faces a pivotal moment in its evolution.

Yet, within the numbers lie signs of strategic introspection and recovery planning. The shift toward scalability via Sub-Affiliation, coupled with cost rationalization and leadership realignment, positions Raketech to potentially rebound stronger in FY2025.