Raketech, a leading gaming affiliate company, has reported a significant decline in revenue for Q4 2024, citing challenges in its Affiliation and Sub-Affiliation segments following the sale of its Tipster business in the U.S. The company’s revenue dropped to EUR 12.3 million ($12.8 million), marking a sharp decrease from EUR 22.8 million ($23.8 million) in Q4 2023. Adjusted EBITDA also fell to EUR 3.2 million ($3.3 million), down from EUR 6 million ($6.3 million) year-over-year. Despite the downturn, Raketech remains optimistic about streamlining its business, cutting costs, and focusing on strategic partnerships to drive growth in 2025.

Q4 2024 Financials: A Challenging Quarter

Revenue Decline: Raketech recorded EUR 12.3 million ($12.8 million) in Q4 2024 revenue, a sharp 46% drop compared to the previous year’s EUR 22.8 million ($23.8 million).
Profitability Impact: Adjusted EBITDA fell to EUR 3.2 million ($3.3 million), reflecting a 47% year-over-year decrease from EUR 6 million ($6.3 million) in Q4 2023.
Affiliation Segment Weakness: Revenue from the Affiliation segment dropped 32% year-over-year, reaching EUR 6.5 million ($6.8 million).
Sub-Affiliation Struggles: The Sub-Affiliation segment declined by 54%, generating EUR 5.2 million ($5.4 million) in Q4 2024.
Cash Flow Stability: Free cash flow before earnouts totaled EUR 14.7 million ($15.3 million) for the year, ensuring the company can meet its EUR 8 million ($8.3 million) earnout commitment due in H1 2025.
Future Financial Obligations: Raketech still has an outstanding earnout liability of EUR 20.6 million ($21.4 million), which must be settled by September 2026.

Cost Reduction and Business Optimization

29% Cost Savings: Raketech implemented significant cost-cutting measures in Q4 2024, resulting in a 29% reduction in operating expenses.
Refining Affiliate Strategy: The company conducted a thorough evaluation of its Affiliation Marketing assets, identifying core strengths to enhance long-term growth opportunities.
Renewed Focus on Key Partnerships: Raketech aims to leverage exclusive commercial agreements with operators while expanding its AffiliationCloud initiative.
CEO Johan Svensson acknowledged the difficulties of 2024 but expressed confidence in the company’s strategy:

"Following a challenging year, we have thoroughly evaluated our Affiliation Marketing assets and their alignment with Raketech’s established commercial and operational strengths. This will enable the company to concentrate more on strategic partnerships, exclusive commercial agreements with operators, and the development of AffiliationCloud."

Looking Ahead: Raketech’s Plans for 2025

Improved Reporting Processes: From 2025, Raketech aims to release financial reports earlier to enhance transparency.
Q1 2025 Expectations: Early indications suggest that Q1 2025 revenue trends remain consistent with Q4 2024, with seasonal challenges contributing to ongoing revenue declines.
Sub-Affiliation Rebound: The Sub-Affiliation business experienced a slow start in January but showed signs of recovery in February.
Strategic Update in Q1 2025: Svensson emphasized Raketech’s commitment to "strategic clarity," stating that the company will provide a detailed financial and operational update in its Q1 2025 report.

Raketech Expecting Potential Recovery in Upcoming Quarters

Raketech faced a turbulent Q4 2024, grappling with declining revenue and profitability following structural shifts in its business model. However, cost-cutting measures, asset optimization, and strategic partnerships are expected to position the company for recovery in 2025. While the Sub-Affiliation segment is showing signs of improvement, Raketech must navigate market headwinds and execute its refined strategy effectively to return to sustainable growth. Investors and industry analysts will closely watch Raketech’s Q1 2025 update for further insights into its recovery trajectory.