Better Collective A/S

Good morning, everyone, and thank you for joining us today for our Q2 webcast. My name is Mikkel Munk-Jakobsgaard, and I'm the Vice President of Investor Relations Group Strategy and Corporate Communications here at Better Collective. And as always, I'm joined by our co-founder and CEO, Jesper Søgaard, and CFO, Flemming Pedersen, who will help me walk you through our Q2 performance. Please follow me to the next slide. We ask you to pay attention to this slide where we display our disclaimer regarding any forward-looking statements in today's webcast. Please turn to the next slide. Here you see today's agenda. Jesper will start by taking you through the highlights of Q2. Hereafter, Flemming will take you through the financial performance before handing the work back to Jesper for a business review. And then we, of course, end the call with a Q&A session. Let's get going. Please turn to the next page as I hand over the work to Jesper.

Thanks a lot, Emil. I want to start out by expressing my gratitude to the entire Better Collective group. Your relentless efforts play a vital role in our growth and the successes we have celebrated are testaments to your hard work. Specifically for this quarter, our group has come together to deliver great results in a time with changing market conditions in the search landscape. We've managed to navigate big changes and come out on top with continued strong performance in our global media partnership business, as well as improved rankings from our owned and operated sports media network and increasing interest in our paid media business. I'm very proud of our team. Our existing business is back to organic growth despite the exceptional performance during the first half of 2023 and the addition of significant new revenue growth from two major acquisitions. On the back of that, we delivered a considerable increase in recurring revenue stemming from both organic and acquired growth while continuing our North American transition to revenue share. The three major acquisitions of PlayMaker Capital, PlayMaker HQ, and Azots have substantially enriched our group and provided us with a much stronger foundation for the future. Despite the delay in performance from PlayMaker HQ, something I'll come back to, we have negotiated a much better deal, generated a fast turnaround, and have yet to harvest all the synergies. Overall, a deal that makes me very pleased as a large shareholder myself. While making large strategic acquisitions and investing in our business, we have still maintained a low debt ratio and improved our capital reserves, remaining a robust financial position with a significant level of preparedness compared to the start of the year. Furthermore, we have made significant investments in establishing our in-house ad tech platform advantage and secured proof of concept and first operational success along with AI technology investments, while also establishing a commercial organization focusing on non-endemic sales. We continue our projected path and will now delve into these developments in greater detail. Please turn to the next page where Flemming will dive into the financials.

Thank you, Jesper, and good morning all. Please follow me to the next slide where we'll dive deeper into the group's financial performance during Q2. During the second quarter, we saw a strong revenue growth development of 27%, with organic growth of 5%. This organic growth came on top of exceptional growth last year, where we as a reminder saw 29% organic growth. In the light of this, we really believe that the performance is highly satisfactory. The expected flat development in EBITDA is the result of last year's exceptional performance as well as the recent acquisitions of PlayMaker Capital and PlayMaker HQ that have only limited contribution to the Q2 earnings and are of course margin dilutive in percentages. We can see that the acquisitions are performing well now and we expect to have the best yet to come. As Jesper mentioned, we have for some time been investing in new technologies such as Advantage, both tech and commercial, and AI. Just noting that, as usual, we are taking the conservative approach by charging all of these costs to the P&L with no capitalization. Please follow me to the next slide. Our recurring revenue grew by 26% to 62 million euros, which was driven by good growth in recurring revenue share income, as well as advertising revenue from Playmaker Capital. Recurring revenue growth is a key metric for us, and as it signals, another quarter with revenue and earnings of higher quality. Recurring revenue made up 62% of total group revenue. Really an impressive performance for Better Collective's sustainable future growth. Please follow me to the next slide. As announced with the Q1 report, we lifted our 2024 financial targets following the ASOT acquisition in the beginning of Q2. Recent acquisitions like Playmaker Capital, ASOT, and Playmaker HQ have significantly enriched our group's foundation, and while doing this, I am pleased to note that we have still managed to maintain a debt ratio below our guidance, currently sitting at two times net debt to EBITDA. Furthermore, after the close of Q2, we re-established our three-year financing agreement, a club bank deal with a total committed facility of €319 million, and adding a new €100 million accordion option. Please turn to the next page as I hand back the word to Jesper for our Q2 business update.

Thank you, Flemming. Let's continue and please turn to the next page. I'm pleased to share the overview of our Q2 performance, a period that saw good growth and progress across different fronts. Our business performed well, returning to organic growth despite last year's comparison. The quarterly performance was mainly driven by our Europe and rest of world business. Europe and the rest of the world saw good developments with 16% organic growth, helped by the men's European Championship in soccer, as well as a small boost from Copa America. However, with clubs taking an earlier break ahead of the tournament and the 2022 World Cup shifting games into early 2023, more than 20% fewer matches were played in major leagues during Q2 this year, making the performance even stronger. Our North American operations were impacted by hard comparisons from last year, as well as one specific media partnership being impacted by the search landscape changes. However, the overall number of new deposit and customers increased compared to the second quarter last year, even excluding M&A, hence posting a good organic underlying business growth. Our NDC mix this quarter prioritized partners with more lucrative and longer-term revenue share contracts, rather than those with higher initial upfront revenue share payments. This combination of investing in more revenue share partners plus tilting our new NDCs more towards the partners that have the largest long-term upside for Better Collective led to a decrease in revenue share earnings versus Q2 2023. However, it lays a solid foundation for future growth via long-term recurring revenue share income. Better Collective has been working with revenue share for decades in Europe and Western Europe. world and remains confident in their strategy to maximize revenue per NDC and continue to win in North America for the long haul. Please turn to the next slide. When it comes to M&A, we are very comfortable with our position in the market. As buyers, we are not forced to act but can rather strategically evaluate potential targets to identify the most promising opportunities aligning with our strategy. We are one of the preferred buyers within the sports media industry, which is a great position to be in. We have a strong financial position with a growing recurrent cash flow and high profitability. In this position, we must continue to carefully evaluate targets and be diligent on when to deploy our capital, and more importantly, when not to. I want to highlight that not all acquisitions require the same efforts. For instance, an acquisition like ASOT is familiar territory. seamlessly blending into our business structure without much integration work needed. Others, like Playmaker Capital, count multiple sports media brands across two continents, as well as several hundred employees, making it more complex in nature and requiring more work in terms of integration into our operations. If we start with the integration of AceArts, this has been seamless and swift with performance exceeding expectations. Here we have been sending more NDCs than forecasted, which was aided by a good uplift in search rankings because of the recent changes to the search landscape. Turning our attention to Playmaker Capital, the integration process is going according to plan, with some developments being ahead of schedule. We already now see strong synergies between the businesses, and in South America, NDCs are ramping up faster than expected, leading the performance marketing revenues to perform well. The key revenue synergy for this acquisition is the performance marketing development, hence it is very comforting to be ahead of our schedule. For Playmaker HQ, our commercial development fell short of our expectations and impacted our North American performance this year. Consequently, we have reached a mutual earn-out settlement agreement with Playmaker HQ's founders and former owners. The initial large earn-out blueprint aimed to align the seller's high anticipations for the future, ensuring we would only compensate for tangible achievements and not mere projections. It goes without saying that we expected more of the performance since day one. However, given the circumstances, settling on a reduced acquisition price below half of the initial agreement is a positive note given the future potential. After replacing the commercial team, We as a group have been through a steep learning curve and our optimism for PlayMaker HQ remains high as we still expect the original investment case to materialize. However, approximately with a one-year delay. We have noted significant synergistic interest in PlayMaker HQ's media products from our endemic partners and are now geared to nurture the non-endemic aspects. Lastly, I'm pleased to see that the commercial pipeline for the second half of the year already looks promising. Please follow me to the next slide. Our overall performance this year is in line with our initial expectations, although with a different revenue mix. As many of you are aware, Google's policy revisions in early Q2 affected some of our media partnerships' content rankings and consequently the scale of audience and NDCs. Despite an initial impact on our business, I'm pleased to report that our diversified strategy has performed as envisioned. I'm extremely proud to see how our organization has come together to deliver an agile performance that has made it possible to deliver this result. As a group, media partnerships continue to deliver good performance. Our North American business has been impacted by one specific partnership seeing decreasing rankings. However, in Europe and rest of the world, the overall media partnership portfolio has seen increased rankings and thereby performance. Outside of our media partnerships business, our owned and operated global sports media network has recorded an uplifting trend in search rankings and audience growth. Further, our sportsbook partners are actively seeking alternative customer acquisition channels, resulting in increased budgets and new partner inquiries for our paid media business. We remain confident that our media partnership business has a promising future. However, likely in a slightly moderated format, this course of events reinforces and proves the value of operating a diversified asset portfolio and as such, when we encounter challenges in one area, we thrive in others. To deliver on our forecast for revenue, EBITDA, and NDCs, even before these changes took place. Hence, we remain on track to deliver on our financial targets and our robust diversified strategy equips us to navigate through changing industry landscapes while remaining focused on sustainable profitable growth. Please turn to the next slide. I'm pleased to report that the technical development of Advantage has been progressing successfully and it is now being gradually rolled out across the Better Collective network with a dedicated commercial team to support this initiative. Further, we have delivered the first proof of concept on a small brand, making us confident to continue to roll out Advantage on larger brands in the coming quarters. We started this project in the beginning of 2023, and I'm extremely proud to see that we've been able to make this happen in such a short period. We've proven that Advantage works, And we've already seen incremental revenue growth, although small, on a brand that historically only did performance marketing. As such, I'll remind you that the financial impact for 2024 remains to be insignificant. We have developed and innovated our business continuously during the past six years as a listed company. Our audience has grown from 7 million monthly visits to north of 400 million monthly visits, bringing us into the big league of global sports media. More than ever, we are now ready to diversify our revenue streams even further by maximizing the yield on our audience. I look forward to seeing how far we can take advantage in the coming years as it remains clear that we have a unique value proposition to become a preferred partner for any business seeking strong brand activation within the sports industry. Please follow me to the last slide of today. So to summarize the quarter, During Q2, we saw good performance across the group with great recurring revenue growth. EBITDA was expected flat at 29 million euros due to recent acquisitions. Recent major acquisitions of PlayMaker Capital, PlayMaker HQ and ASOT have provided a stronger foundation for our group. Advantage has seen proof of concept and its first operational success. We have successfully navigated major shifts in the search landscape and have a net zero impact from the recent changes. Q2 was in line with expectations and financial targets were upgraded post the acquisition, the ASART acquisition. Now we look forward with full steam ahead. This concludes our webcast presentation. I'll now pass the word back to the operator and open for questions from the audience. Thank you for listening in.

Thank you so much, dear participants. As a reminder, if you wish to ask a question over the phone, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again. Alternatively, you can submit your questions via the webcast. Please stand by. We'll compile the Q&A roster. This will take a few moments. And now we're going to take our first question. And it comes from the line of Oscar Ronquist from ABG Sundal Collier. Your line is open. Please ask your question.

Thank you and good morning all. Thanks for taking my questions. So my first one would be on the NDC development. I think NDC is on revenue share. It's down 6% in total. We have around 100,000 in total. That could obviously include some CPA on the Euros. We have some M&A and Copa America shares. while also U.S. NDCs grew organically, you say in the report. So I think that Europe and the rest of the world looks pretty soft under the hood. Can you just explain the reason behind this and what trends you see going forward? Thank you.

Good morning, Oskar. On the NDCs, overall we are happy with the development of NDCs. And we did flag sort of uncertainty just on the back of Q1. So pleased to see from the change search landscape, so pleased to see the development. As you also mentioned, we delivered 100,000 during the Euros, which we think is a great delivery during a championship. And then we have seen like a 20% decrease in games in major leagues in Europe. So also affecting this for the quarter. And finally, which we actually did flag during Q1, is that for Brazil specifically, momentum has come down a bit heading into the potential regulation. And this also continued for Q2.

Got it. So Brazil is also, you know, the negative momentum is kept despite the Copa America. So we would still see sort of a a decline in NDCs year over year in Brazil.

Well, for the remainder of the year, I cannot comment, but just to explain sort of your specific question to the NDCs for Q2.

Yeah, got it. Thank you. Just the next one on Playmaker Capital. Can you say anything about the contribution for the first five months now? I think it was, you know, zero in EBITDA or close to zero at least in the first two months. And I think that you have some comments that it, limited contribution and also just if you're still on track for 15 million in EBITDA for the first 12 months of integration. Thanks.

Yeah, thanks Oscar Fleming here. I can perhaps take that one. Yeah, now we are five months into the year since we acquired the company. and just reminding that the business case here is really to apply affiliate marketing on top of the existing business clearly that takes some time and hence the early contribution is as expected limited as we also write in the report and when we acquired the company integration and performance is going as planned and you can say also reflected in our unchanged guidance so We cannot really comment on specific brands. It's not a segment by itself, but we are so far very pleased with Playmaker Capital.

Okay, thank you. And just with the revenue share transition, I think that you sometimes allude to around 12 months or 12 to 18 months before you can see the acceleration. So if you do a transition towards affiliation and revenue share contracts, Should we expect the majority of the ramp-up may be coming in 2025, or how has the transition gone so far?

Just commenting on the specifics for changing a business that has basically been media sales-based as Playmaker Capital. For us, it's about, first off, starting to create the content, secure the ranks, attract the audience that will convert into NDCs. So that's sort of the work that is ongoing and where we are ahead of expectations and see good progress. But then you have the other factor. As we deliver these NDCs, then rightfully to your point, then there's another delay before they will really contribute to a net positive performance for the business. So you are right. It will take some time, but we've tried it before. So we're not concerned about that in particular, but it will take some time.

Okay, got it. Just the last question, pretty long one maybe, but on North America, sales down 18% organically. We also see revenue share down 44% in the U.S., which I believe is due to a lower share of hybrid contracts. So if you could just maybe first comment on if you're seeing any U.S. operators pulling back on affiliate spending, Like, for instance, looking at the Rush Street's comments about pulling back in sports betting states. And also, if you could allude to the revenue share number that you put out, how much of that is in the hybrid contracts like CPA and revenue? What's the revenue share base in that, if you can say something? Thanks.

Yeah, maybe just starting sort of on the North American market as a whole, that it has been volatile. And as I think we've mentioned before, it's a different animal compared to what we're used to, given the fewer market participants. But with that said, we work with all major players and thereby plenty of competition, which is basically what will enable us to thrive in such a landscape. And on the spend from the marketplace, we know that the performance marketing channel is really the one that is easiest to calculate a return on. So we really expect that that is just still a go-to place for the players in the market to get efficient spend. And as I think we have also said before, now we're entering the phase with the launch of the NFL. And there are always big negotiations ongoing. So we're actually experiencing very much the similar development as we have experienced in prior years. And maybe specifically to the mix and the revenue share, I think maybe Flemming can comment on that.

Yeah. Also reflecting the different market conditions, we basically have as many contractors as there are partners and contract types. And clearly what we are focused on is really to drive the maximum long-term value. So we have been pushing for revenue share and has landed in a mix of, you can say, partners where we operate fully on revenue share, as we know it from the rest of the world, and some where we have different kinds of hybrids, some with bigger upfronts, some with smaller upfronts. And hence, it is, I admit, difficult to track our, you can say, revenue performance, revenue share performance per quarter. But rest assured that we are, you can say, looking at a fairly big bank of recurring revenue sitting, you can say, beneath the surface that we will harvest in the coming years. And that's what really is in our focus and, as you can say, clearly maximizes the value.

Yeah, and maybe just a last comment to that is that... 2023 was really the first big transition year for this development. And you know the time it will take before this turns profitable. And we are basically still underwater. So we know there's a lot of value in the databases, but it will take time before we realize the value in the P&L.

Understood. Thanks. Just a quick one, if I may. You said that you have got increased spending budgets on paid media from your customers. So just on the sort of incremental margins here, you know, initially paid media margins are pretty low, at least for most of the affiliates across the world. So just can we expect that to push down the margin or is that, you know... Is the mix still going to be pretty similar in terms of publishing versus paid? Thanks.

Yeah, I'm happy about that question, Oskar, because if you look at our paid media margin, it's actually around 30% that has been for some time. And that really reflects that since we got into this business just four years ago, we have managed to build up significant revenue share databases. And it really underlines the whole tactic around revenue shares. that this now has been, you can say, the so-called snowball effect that we have piled up. It allows us to basically go deeper into bidding for customers and really drive this business as a whole different market than you see other players in the market. So back to the revenue share element, it is really a stronghold here also.

Yeah, I got that. I mean, your paid media margin is fantastic. But just, you know, if you're accelerating NDCs on paid media on revenue share, because obviously, I mean, the cost should be sort of upfront and then the revenue share comes, I don't know, in like six or 12 or 18 months. So is it fair to assume that, you know, in short term, the margin will come down?

I think in all fairness, in this part of the business, we are also having customers where we work on CPA and the team tries to balance things. So we steer the margins. And I think it has just proven in recent quarters that we can drive growth, significant growth in that business and also in disease, while at the same time, you can say, protecting this high margin. Whether it will, you can say, per quarter go up a bit, up or down a bit, that's basically due to specific campaigns and markets. But the good thing is that they are getting more budgets and we can then steer the business and contracts accordingly.

All right. That was all. Thank you very much, Jesper and Saming.

Thank you.

Thanks, Oskar.

Now we're going to take our next question. And the next question comes from the line of Salma Achberg from Red Eye. Your line is open. Please ask your question.

Thank you. Maybe just a question on NDC mix. It can give some flavor maybe on, I mean, this quarter with the new media partnership landscape. Did you see a big change in mix in terms of media partnership versus on an operated NDC contribution?

No, we didn't see a big change. I think what I mentioned in the webcast is that in North America, we have seen one media partnership being affected. So that's probably where we have seen the biggest change. But for Europe and the rest of the world, we have several media partnerships performing well. and also like on the owned and operated they have benefited but it's not like a radical shift change in the mix.

And you state that you still see the growth potential from this business model. Do you think that is mainly from kind of existing partnerships or do you see potential to do new partnerships as well?

I think it's both and What we have learned since we experienced this is probably that there's an element of doing this in the right manner and right way. So now we are really confident that, yes, media partnerships will continue. It's more a matter of doing it right. And obviously that has been very comforting for us to learn during the course.

All right. And just a question on the advantage here. I mean, you do say that it's very early here, but you're starting to roll out no real contribution this year. But how fast do you think this product can roll out? Is it like a three-year rollout or could you see something already in 2025 in terms of revenue potential?

Well, we're not guiding specifically as to when we'll see an effect of advantage, but what have... excited us this quarter is that we now see incremental revenue growth on a small brand where we were relying on performance-based marketing. So basically that is what we set out to do. Now we see that it's working. It's about going to bigger brands and also in some cases brands where we will have an existing media business where we are now confident we can actually improve that media business but The delicate balance is, of course, to make sure we keep the demand high enough so we can immediately overtake the spend that is already on the brand. And that's why we have been focused also in this quarter and starting in Q1 on building the sales organization internally in Better Collective to be able to deliver that demand from advertisers to our brands. So for Advantage, we feel... We now have the technology in place. It will be an ongoing development, so it's never going to be fully done, but it's ready. And at the same time, we are building up the sales muscle, which is the other side of the coin.

Right. And regarding Playmaker HQ, it did not do as well as expected, but you had pretty aggressive targets there, I remember. Was it that you couldn't monetize as expected or can you explain a bit more on what did not work out and why are you certain that you will find this in the future?

It's of course unfortunate that it has not met our expectations and the forecast for PlayMaker HQ. But having said that, we are truly excited about the content that is being produced the podcast shows, the short form video documentaries that they produce. They have a huge following, really see a lot of interest from great talent that want to work with PlayMaker HQ. So on the content side, we really feel they have been delivering well. The issue has been with the commercial sales of those content formats, where there were Back when we acquired the business, high expectations on price from the seller, which obviously was based on high expectations on sales from the seller. So we used that in order to make a very big earn out so the seller could get the price they wanted, but also had to deliver on that sort of ambitious sales plan there. And unfortunately, that has not been the case. And we have now changed the sales team. It's sort of steered by Better Collective. We have also inserted a director for the company coming from the Better Collective organization. And now we do believe we can achieve that plan, but it's going to be with a year's delay. And from the perspective of me being a very big shareholder of Better Collective, that we have settled this acquisition about half of the original price, I think is very attractive for Better Collective long term because we are not really concerned about the potential and quality of the content that is being built and the audience that they have in PlayMaker HQ. And now, which I also stated in the webcast, our sales team have managed to secure quite a lot of the second half's expected sales already. So we think we have now good momentum for Playmaker HQ, but obviously it was a hiccup that performance was not as expected in the first year.

All right. And then maybe a question on ASOT. Maybe you said that this asset seems to be doing well in the C growth, strongly expected. Can you give any flavor on the terms of revenue, EBITDA impact that you had in Q2 from that?

We have not specified the specifics of ASOTs. We stated it basically, we have it in for one month plus a few days, so it's a limited contribution to Q2, but it is really a strong asset also on the back of the mentioned search changes.

All right. Thank you very much.

Thank you. Thank you. Dear participants, as a reminder, if you wish to ask a question over the phone, please press star 11 on your telephone keypad. Alternatively, you can submit your questions via the webcast. Now we're going to take our next question. And the question comes from the line of Sebastian Gray from Nordea. Your line is open. Please ask your question.

Good morning, guys. Thank you for taking my question. So just judging from the share reaction today, it seems like PlayMaker HQ impairment is weighing somewhat on sentiment. Maybe Jesper, could you talk around the nature of this acquisition compared to all the other acquisitions sitting on your balance sheet? I mean, to ask straightforward, what is the comfort in the remaining goodwill, so to speak?

Yeah, thanks, Sebastian. I think definitely a relevant question. We have high comfort in the goodwill on the balance sheet and I just alluded to sort of the way we structured the deal with PlayMaker HQ where there was a high asking price and the only way to sort of find common ground was through an earn out where you actually had the majority of the purchase price on that earn out. And it goes without saying that when you structure it like that, the targets are fairly ambitious for getting the full purchase price paid out in the end. And we've actually seen a few other examples of that. We had it with FODBIN as an example where again we had a hard time agreeing on price with the seller and ultimately we ended up putting it on an earn out with very aggressive targets in order to hit the maximum price for that business. We have also done a lot of other acquisitions where we are very comfortable with the performance of the business. And there we just pay the full price or have a very small earn out. So we sort of build it into the way we structure acquisitions. And therefore, we're very comfortable around the balance sheet because most of the acquisitions, they don't have these sort of very high growth targets in the near term as we had with Playmaker HQ.

Yeah, I was adding here, Sebastian, just a comment. I think for Playmaker HQ, it ends up being, you can say, not a very big acquisition, just about 20 million euros or something like that in the final phase. But I think it's the biggest relative earn out we have made for all acquisitions simply because it was a new business area for us. And as Jesper mentioned, we couldn't really settle on price. So it landed in, I would say, a perfect place after all.

Yeah, because I would like to stress that I would definitely do this acquisition again. We are really excited about the potential of PlayMaker HQ and something which is non-financial that we have had as an effect since the acquisition is our endemic partners. They are quite excited about what we produce in terms of podcast formats and and YouTube shows from PlayMaker HQ. So it has been supportive to our overall deal-making with these partners in sort of the global deals we make. But it's, of course, it's not a direct financial contribution, but it's a group contribution we have seen from PlayMaker HQ on the endemic side.

OK, thank you. Thank you on the detail, guys. Very appreciated. Then a question on the media partnerships here. So you say you can see continued good performance for most media partnerships during the quarter. So just to understand this, does that mean that, say you saw an initial negative impact and you've been able to sort of tweak the setup and regain grounds in the search engine landscape, or is it the fact that you have just simply not seen an effect yet on these partnerships?

Well, it does vary because there's an element of learning about those that have been impacted and sort of seeing the way forward for those and how we can structure such media partnerships so they will be relevant in the future and perform. Then there's the part of existing ones not being affected. And then there's the owned and operated, basically taking over and gaining ground from this. And it's sort of the combination of that that has led to a good outcome of Q2. And for me, the most important part of this is what I also said earlier, is we sort of know now that it's about doing it right. So even though there may be a hiccup or a challenge to one, we also know there's a way forward and that we can manage this and do it right. So I think that that's probably the most important part of the development.

Okay, but does that mean that you have sort of new information from Google that this is going to be the final form of the policy going forward and you sort of have increased visibility and feel comfortable that you are able to to navigate in this or how should I interpret your, what'd you say?

Well, I think it's a stretch thing that, that, uh, Google gives such, such answers that that's not how they work. Um, but, but it's more based on, on testing and working with, with the search landscape and looking at what, what happens with the overall in the search landscape where we have gotten this, uh, discomfort. And then, uh, back to, to, to Google communication is that it's indirect. And again, uh, through indirect communication, we also sense that is the way forward.

Okay, cool. And then just the last question on advantage and maybe talk about sort of the actual cost impact that you are running through the P&L here up front. I mean, what should we think of these costs going forward and When should we see a better balance between revenue and cost stemming from the Advantage initiative?

Last year when we started the project we basically set aside 5 million euros that we spent last year and we have continued the tech development and then we have actually added a fairly big commercial team after we got comfort with it that this was really commercially viable. So now we are basically having, as you indicate, of course, a cost-based setting, fairly significant in a lot of things, but also with now a commercial proof of concept that we are happy with. So yes, we are taking some costs right now that are not directly, you can say, rewarded. I would expect that from next year we will see that balance come back while we roll this out over the network, as Jesper said. But it is, you can say, adding to the initial tech investment, we have actually now gotten so comfortable, so we have deployed a dedicated commercial team of some size. So that's where we are.

Okay. Thank you so much, guys.

Thanks, Sebastian.

Thank you. There are no further questions on Audio Alliance at this moment, and I would like to hand over to our speakers for any written questions.

Yes, thank you. So we have a first question here regarding the Google changes on the media rankings, I guess search rankings. As you see it today, and if you were given the choice, would you then prefer to be able to roll back the changes, or would you prefer to keep them as is?

Well, first of all, it's a very hypothetical question because it's in the nature of the search landscape to change over time. The search companies constantly update their algorithms and we have, you know, just as a fun anecdote, when we started out in Better Collective, the search landscape where we were focused was Yahoo. So things have changed quite a bit since. And for us, it's more about being sort of on top of those changes. And I think the message today is that we're quite comfortable now with the changes we've seen. We think we're in a strong position to do well over time on the back of these changes. And I think it's worth mentioning that we will likely at some point in the future experience new changes where we need to manage. And with the team we have in Better Collective, I have high confidence in us being able to manage that. And we have also deployed a diversified strategy over the years where if we weaken it in one part of the business, often case another part will experience tailwind. So we have really built the business for managing this. And I think we've gotten confirmation yet again that it's proving to work.

Yes, and then we have a couple of questions regarding North America and the other revenue, which was of 8.4 million euros during this quarter. And what was other and whether it was a one-off?

I think here we have also added businesses. Now we discussed PlayMaker HQ. And even though they didn't meet the expectations, they are part of others. They are selling sponsorships and advertising. So what lies within others is basically sponsorships and advertising. And that is definitely not one-off. That is a significant part of their business going forward. Also with the parts of Playmaker Capital that are based in North America and Canada, US and Canada, also heavy on advertising revenues. So that goes in there.

Thank you. That concludes the webcast. Thank you so much for showing interest in Better Collective.