Raketech Group Holding PLC

in at 12.9 million euro in revenues in Q3, an organic decrease of 39.9% and 38.8% adjusted for the divestment of the advisory business. Adjusted EBITDA of 3.1 million euro, a decrease of 44.6% year-on-year and EBITDA of 3 million euro. Total adjusted EBITDA for the first three quarters 12.5 million euro. October revenue was €4 million compared to €7.7 million in October last year, of which €0.4 million from the divested advisory business. We expect Q4 to be slightly stronger than Q3 in terms of adjusted EBITDA. At the moment, it looks difficult to reach the lower end of the previous communicated full-year guidance of €17-19 million in adjusted EBITDA. However, visibility is limited due to the ongoing operational challenges for our publishers within Raytech Network and around the expectation of a usually stronger second half of Q4 for both casino and US sports. Our previously communicated review of our operating model that started during the first quarter of this year has led to realized cost savings of 18% compared to Q1 this year. Publisher costs excluded. Free cash flow before earnout increased to 3.8 million euro, positively impacted by timing of settlement and trade receivables and payables. This allows us to meet our upcoming earnout commitment of 9.9 million euro, payable up until the first half of next year. The remaining earnout obligation of 20.6 million euro can be settled at any point in time at our discretion. up until September 2026. Next slide. Now let's look at our different business areas more in detail and we will start with affiliation marketing. Affiliation marketing, our in-house operated assets and strategic partnerships had a weak quarter with revenues of 6.8 million euro, a decline with 28.3% compared to Q3 last year. The affiliation marketing revenues were stable between the month during Q3 and into November. The Kazumba assets accounted for the biggest drop in revenue. During the quarter, the assets have sporadically increased in traffic, but the effect from the Google Core update earlier this year is substantial. We have further strengthened the organization working with the Kazumba assets, where the founders remain in strategic roles. The Swedish gambling tax rate was increased from 18% to 22% from 1st of July. This has somewhat affected the investment willingness of operators when it comes to upfront flat fees. And we saw a decline on our rev share databases during the quarter. Vabernori casino markets remained stable or growing during the quarter. Our sports assets declined sequentially compared to a strong comparative period, including UEFA Euro and IPL in Q2. but mainly in line with performance of last year. In the beginning of October, we signed a strategic partnership with the founders of a slot portfolio with traffic from South Europe and Latam. On the next slide, I will speak more about how the strategic partnerships works within affiliation marketing. Sub-affiliation. Sub-affiliation revenues amounted to 5.5 million euro, a decrease of 51% compared to the strong Q3 last year. gross margin was 25 percent our paid focus publishers on rate tech network had operational challenges throughout the quarter with their google ad campaigns we have seen some improvement in traffic and revenue in q4 these operational challenges is largely due to external factors beyond our immediate control our relationships with the paid publishers and operators are strong And we are standby and ready to scale up the business when the market conditions improve. Affiliation Cloud, our in-house developed sub-affiliation platform, continue to deliver year-on-year organic growth. A good portion of organic growth comes from exclusive partnerships, which I will speak more about later in the presentation. We will continue to invest in Affiliation Cloud to be able to onboard more partners and scale further. Betting tips and subscription. End of July, we completed the sale of a land-based betting tips advisory business. This divestment led to revenue decline of 29.2%. But if you adjust for the sold assets, we had 24% organic growth for the remaining digital tips to business year on year. Going to the next slide. Starting with affiliation marketing, today I will speak about strategic partnerships. This year we have entered into two strategic partnerships within affiliation marketing. The latest were the founders of the Slots portfolio. The purpose of the partnerships is to team up with entrepreneurs with a good track record of operating affiliate products, where they could benefit from Raketech's infrastructure and size, and where Raketech could secure product competence. In the partnerships with the slots assets, the founders takes over the daily operations of assets, including product development, content, and SEO strategy. They use Raytech's central resources as sales, finance, and different IT services. These partnerships are operated with similar gross margin as if we would have operated assets fully in-house. Next slide. Sub-affiliation and exclusive partnerships. In Q3, we closed an agreement and went live with an exclusive partnership with a large U.S. operator on Affiliation Cloud. The partnerships are structured in a way where we will handle operations and relations, including negotiations of all Tier 3 and Tier 3 affiliates and publishers who like to promote the operator. The partnership with the US operator was the fourth brand who chose Affiliation Cloud as their exclusive sub-affiliation partner. We believe a lot in these types of partnerships instead of a traditional affiliation model. In the traditional affiliation model, each operator needs to negotiate and agree a deal with each affiliate to secure exposure and distribution. The operator must have its own affiliate team with local expertise for each market to secure compliance. At Affiliation Cloud, the operators get access to multiple affiliates through one agreement. Our publisher team take care of the commercial negotiations and secure the distribution, including compliance. We pay the affiliates their commission on demand to secure good cash flow for our publishers. Betting tips and subscription. At the end of July, we completed the sale of a land-based betting tips advisory business. to be able to focus on the digital tips-to-business. The difference between a land-based advisory and our digital tips-to-business is that the focus of a land-based was to generate the lead online, but drive and close the sales offline. The digitization of the tips-to-business has allowed us to continue generating leads online and to convert them online. With the significant traffic volumes on our site, we can seamlessly increase monetizations on our tipster assets at scale, which will be our focus going forward. Our goal is to continue growing our digital footprint across all our tipster assets in an accelerated fashion. Now over to our CFO mods.

we saw total revenues of 12.9 million which represents a decrease for both affiliation marketing and sub-affiliation. On your left side we have total revenues split on three business areas and on the right side total revenues distributed on cluster of regions. Starting with affiliation marketing which constitutes 53 percent of total revenues We did see sporadic traffic and ranking increase for the consumed assets during the quarter, but they are not showing any sustained recovery yet. Pulling down revenues compared to last year and also somewhat from Q2. Nordics held up relatively well and is essentially in line with Q2 and last year, with Sweden performing softer while other Nordic regions were up or stable. Visible also in Q2 specifically is a natural decrease for our sports assets, following high activity in Q2, following the IPL and UEFA Euro. SAP affiliation represents approximately 42% of total revenues in Q3. As we highlighted in Q2, activity slowed down quite significantly in the quarter with operational limitations for specifically our network publishers. Our relationship with publishers are still stable and performance had stabilized from a low point at the end of quarter, indicating some improvement in the Q4. Visibility is however to some extent limited. As a last point on this slide, for the US we concluded the sale of the ATS advisory at the end of July. This means revenues from this area is only including July and quarter. A like for like comparison of last year, meaning excluding ATS advisory, we have an organic growth of 20 plus percent for a digital subscription, which is positive to see. Next slide. This slide shows revenue mix and vertical split. Just a couple of quick points on this slide. First, the variation in CPA is largely driven by the lower activity in sub affiliation. This area is predominantly CPA heavy, driving the decline from a very strong Q3 of last year. Secondly, flat fees are on par with previous quarter, which is positive, meaning that our partners continue to see good value in our traffic. As highlighted in previous quarters, we have an ongoing and continuing review of all our products and business area to ensure that we are operationally efficient. From a high point in Q1 with regards to cost, we initiated a review and cost-cutting initiative, and we are now seeing these initiatives realizing, with an overall decrease in total cost excluding publisher costs of about 18% from Q1. As we move along, we will continue to tweak and fine-tune our operating model in line with the overall strategy. Next slide. Adjusted EBITDA was 3.1, mainly impacted by the lower performance within affiliation marketing compared to last year. Despite lower activity within sub-affiliation, the gross profit was strong in the quarter at 25% in this specific business area and affected primarily our higher revenue share. The realized cost savings that I mentioned on the previous slide additionally somewhat offset the decrease in revenues. On the right-hand side, free cash flow before earners is higher than reported EBITDA. I mentioned in the previous call last quarter that we were expecting a catch-up in H2, and we are seeing this in Q3. This primarily relates to time and effects from paying publishers in sub-affiliation, but also timing of settlements from operators. Overall free cash flow before earnouts is expected to remain in line or slightly above EBITDA for the full year. Moving along to next slide. With regards to our outstanding earnouts, the last part of the Casumbo Earnout was finalized at the end of July, meaning the final amount is now fully fixed. For the next upcoming 12 months, or more specifically up until the first half year of next year, we will settle 9.9 million. This will be settled in cash using our current net cash position, expected free cash flow and or existing facility we have in place. The remaining 2.6 million, as we've communicated previously, can be settled at any point in time up until September 2026 at our discretion. We also have at our discretion the possibility to settle part of this in shares. Post September 2026 there are no other outstanding commitments related to any acquisitions. Thank you and over to Johan.

Thank you Måns. To conclude revenues of 12.9 million euro and adjusted EBITDA of 3.1 million euro. Cost savings in Q3 of 18% compared to Q1 this year excluding publisher costs. We have continued our evaluation of all our products and business areas to better position ourselves for sustainable long-term growth and operational efficiency. These initiatives have resulted in the successful sale of ATS Advisory and the formation of two strategic partnerships within affiliation marketing, as well as a couple of new exclusive partnerships within sub-affiliation. With these words, we now open up for Q&A.