Raketech Group Holding PLC

Good morning and welcome to Raketech's Q4 2025 presentation. My name is Johan Svensson and I'm the CEO of Raketech. Today, CFO Måns Wahlborn and I are here to present Raketech's Q4 report and the full numbers of 2025. We will start with financial highlights. Q4 was the first quarter without the divested Kazumba assets. We sold them at the end of Q3. So far we have received 0.4 million euro of a payment consideration of total 12 million euro. The continued operations excluding Kazumba assets came in at 5.7 million euro in revenue for the quarter. An organic decrease of 45.5% year-on-year and 7.3% compared to Q3. Most of the revenue decline year-on-year came from a paid publisher network within sub-affiliation. Adjusted EBITDA for continued operations excluding Kazumba amounted to 1.1 million euro compared to 1.2 million euro in Q3. Adjusted EBITDA margin amounted to 18.8% reflecting our continued cost discipline. Affiliation marketing or RakeTech-owned publishers, as we refer to the portfolio internally, generated 3.9 million euro in revenue excluding Kazumba. We had a weak start to the quarter, but a strong finish. With the December Google Core update contributing to the improved performance towards the end of the period. Sub-affiliation revenue amounted to 1.8 million in Q4 compared to 1.9 million in Q3. The paid network continued to decline while we saw some quarter-on-quarter growth in organic publisher network on Affiliation Cloud. Let's now review the performance of each business area, starting with affiliation marketing, as we call Reiktecom Publishers. Excluding consumer assets, the affiliation marketing portfolio came in at 3.9 million euro in revenue. The portfolio mainly consists of products in the Nordic, with Sweden being the largest market. It's a diversified portfolio with many products across both sports and casinos. We are working very actively to broaden and develop the products to make them more relevant to the end users. In order to increase the share of direct traffic and become less dependent on SEO traffic. I will talk more about our latest launches later in the presentation. Sub-affiliation performed in line with Q3, where the paid network continued to decline. Since early 2024, changing market conditions have continued to negatively affect our paid publishers within sub-affiliation. which has meant that the inflow of new traffic has been limited. As a result, and in line with our strategic focus on the organic publisher network, we stopped onboarding new paid publishers during the quarter and began a structured phase-out of the remaining paid network. The paid network accounted for around half of sub-affiliation revenues during the quarter, but going forward, we expect that share to gradually decrease. This phase-out process has also resulted in certain cost savings. The external organic publisher network showed some growth in Q4 compared to Q3. However, revenues came in lower than expected. Despite a strong start to the quarter, we didn't fully manage to materialize the recently signed agreements with US publishers. Going to the next slide and our platform first strategy. We are continuing to develop our commercial B2B platform, Affiliation Cloud. Today, the platform is used by all Raketech-owned publishers, external publishers and operators. During Q4, we had close to 100 external publishers that generated revenue through our organic publisher network. In addition to facilitating commercial agreements between the publishers and the operators, the platform provides its users with data insights, fast payment, it ensures compliance, among other essential services. We have an ambitious roadmap for 2026, focusing on adding more features and increasing automation across the platform. Some of the key initiatives include rolling out automated payment flows, improved reporting, and adding an on-page SEO audit tool to better support all publishers using the platform, both Rake.com publishers and external publishers. We're also getting ready to launch a fully integrated sports widget we get ahead of the upcoming FIFA World Cup. Affiliation Cloud is being developed as a global platform, but our focus at the moment are on the Nordics in line with the geographic footprint on our affiliation marketing portfolio. We also target a focused expansion in North America, both US and Canada. From a commercial standpoint, the platform allows Raketech to bundle traffic and inventory across both Raketech-owned and external publishers. This helps us coordinate sales more effectively and build stronger, more strategic partnerships with operators. Let's move to the next slide and dive a bit deeper into our commercial strategy. We have in the past talked about our exclusive commercial agreement with both operators and publishers. When we say exclusive commercial operator agreement, we mean that we are the only affiliate network that can provide access to that specific operator. So if a publisher doesn't have a direct agreement in place, they need to go through Affiliation Cloud to get the deal and to be able to advertise the brand. Today, we have a handful of these agreements live, both in the US and in Sweden. And we are continuously working on expanding existing partnerships as well as signing new ones. In simple terms, these setups means that Affiliation Cloud is the only affiliate network offering access to that operator. Unless you are a large tier one publisher with direct relationships, Affiliation Cloud is the go-to platform to establish a commercial agreement and start advertising the brand. For operators, this creates clear benefits. Through one single agreement with Regtech, they can broaden their reach and speed up player acquisition. While we take care of the day-to-day, operations, including account management, communication, deal negotiation, compliance, KYC, and paying the publishers. During the quarter, we sign our second exclusive publisher partnership in the US. Under this setup, we take full responsibility for selling the publisher's inventory and managing all commercial agreements on their behalf. This allows the publisher to focus entirely on developing their product and driving traffic to operators while we handle sales, deal optimization, administration and invoicing. And we are paying the publishers on demand. Partnerships like these are a key part of our strategy going forward. We expect to see more of this agreement as it becomes increasingly costly for publishers in regulated markets to maintain their own in-house commercial teams, including sales, legal and compliance, and all related administration. For Raketech, this model enables us to make better use of our existing commercial agreements and infrastructure, driving shared growth and improved efficiencies for both parties. Now let's turn to the next slide and Raketech-owned publishers. For our Raketech-owned publishers, we have launched two new projects after the end of the quarter. Casino Feber Media and the pregame news section at TV Matschen. These launches are part of our strategy to build stronger go-to brands with more relevant content and higher user engagement. The goal is to increase the share of returning visitors and drive more direct traffic to our platforms. At the same time, we are focused on building stronger brands and expanding across more channels, reducing our reliance on pure SEO driven traffic over time. Casinofeber, it has been Raytech's flagship casino brand in Sweden since 2018. Yesterday we relaunched the brand on a new platform and at the same time we went live with the first version of Casinofeber Media. Casinofeber Media will be a Swedish language news platform focused on the Swedish gambling market and iGaming industry. It will cover both online and land-based. In addition to daily news coverage, we will produce more in-depth analysis of listed iGaming companies, as well as analysis on how the regulated Swedish market continues to evolve. We will also produce video content and launch an article series featuring interviews with Swedish industry profiles, entrepreneurs and founders of successful iGaming businesses. Just before the Winter Olympics started, we rolled out the first version of our pre-game content new section on TV-matchen. Our ambition is to build a more comprehensive pre-game content platform on top of our popular TV Sport Guides, adding further value for the end users and additional commercial inventories. Today, most visitors come to our TV Sport Guides to check what games are on. which channel is broadcasting and when different events take place. By adding deeper content and guides around events, we expect users to spend more time on the platform and engage more with the content. This also creates additional commercial opportunities where we can integrate more performance-based marketing elements and inventories into our TV Sport Guide portfolio. There are also clear synergies across markets For example, an article covering the weekend's Premier League round in Sweden can easily be translated and localized into other languages using AI. This allows us to scale content efficiently across the different markets. Now over to Måns and a deeper look into our financials.

Thank you, Johan. So let's start with the overall revenue picture for the quarter. Similar to last quarter, the recently disposed Kazumba assets are excluded in Q4 and all comparative periods. Affiliation marketing accounted for roughly 68% of total revenues in Q4. We did see a softer performance within affiliation marketing compared to Q3 and the year before. And as Johan noted, the quarter started slower than expected, but picked up with a strong December, which we normally do see from a seasonality perspective, but we also had a positive effect from a net positive Google Core update for our main assets in the Nordics. Within sub-affiliation, we were essentially in line with Q3. The split between what we refer to as organic and paid publishers were approximately the half and half. As we have highlighted for the last several quarters, the paid publishers in our network have had a hard time getting back to driving traffic as market conditions have changed. And as such, we have during the quarter discontinued the onboarding of new publishers in this area. In parallel, however, and in line with what we've said in previous presentations, the focus is on onboarding and growing organic publishers. As Johan said, we did sign a new US publisher during the quarter, but getting started with them has taken a bit longer than anticipated and growth was therefore slightly lower than expected. We did, however, despite this, see some growth in Q4 compared to Q3. The Moving on to revenue mix and the variations you see here are primarily driven by CPA activity, and it's an effect of the decline within the paid publisher network. The somewhat slower web sharing Q4 is an effect of the softer performance in the beginning of the quarter, which did pick up during December. Positive, however, is that the flat fees remained stable throughout, which is a good sign that operators see good value in our sites. EBITDA was slightly lower compared to previous quarter, excluding one-offs and discontinued operations. Despite a somewhat softer top line, it shows that the cost discipline and efficiencies we've had worked on throughout the year are having a positive effect. Compared to Q4 of last year, we're approximately down 24% in costs, excluding publisher costs. And compared to Q3, we're also lowering costs, and this is to some extent an effect of the efficiencies following the discontinued paid publisher network within sub-affiliation. And turning to cash flow, cash conversion was reasonably stable in the quarter in line with EBITDA. The main differences between EBITDA and free cash flow are normally related to taxes, lease and interest payments and some smaller capex items. this quarter we had somewhat a positive effect on trade receivables which are related to timing effects but this is all within expectations as well we continue to settle earnouts we settled about 400k in the quarter and as a reminder the remaining earnout balance will continue to be paid in partial installments through march 2028. On the Kazumba disposal, which closed at the end of September, the fixed consideration is 12 million euros. This will be paid in monthly variable installments through December 2029. The consideration is, however, measured at a fair value of roughly 7 million euros, reflecting time value of money, but also the underlying credit risk. And as of today, we received approximately 0.4 million. And now back to Johan.

Thank you Måns. To summarize before we open up for Q&A. Financials Q4 was the first quarter without the divested Kazumba assets. To date, as Måns mentioned as well, proceeds from the sales of the Kazumba assets total 0.4 million euro. The continued operations excluding consumed assets came in at 5.7 million in revenue. Adjusted EBITDA of 1.1 million euro representing a margin of 18.8%. Key takeaways per business area. Ranked account publishers, we had a relatively soft start to the quarter but saw improved momentum in December following a net positive impact from the December Google Core update. We continue to stay focused on product development with a clear objective of increasing direct traffic and gradually reducing our dependency on SEO. Following the end of the quarter, we went live with two strategic important product launches, Casino Feber Media and the new pregame news section on TVMatchwell. Within sub-affiliation, the pay network continued to decline and is currently being phased out as a part of our strategic shift. At the same time, organic publishing network delivered quarter on quarter growth. That said, revenue came in below our expectations, mainly due to a slower ramp up and materialization of certain partnerships in the US market. Business outlook, we continue to accelerate the execution of our platform first strategy with affiliation cloud playing a central role in improving commercial integration, driving operational efficiencies and supporting long term scalability. At the same time, we are expanding our organic publisher network across North America and the Nordics, building out both reach and depth in those markets. We will continue scaling our investment in expanding our go-to products while at the same time preparing for the upcoming FIFA World Cup. Preliminary data for January shows that affiliation marketing, Recticome publishers are performing slightly above the Q4 average. while external organic publishing network has been impacted by a slow start of year from certain US publishers. With these words, we're now opening up for Q&A.

If you wish to ask a question, please dial pound key five on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Riker Dangberg from DNB Carnegie. Please go ahead.

Good morning, guys. Hi, good morning, Richard. Good morning, sir. My first question is regarding the trading updates. You say that you see like a slight growth Q and Q compared to Q4. Is this adjusted for seasonality as Q4 is usually the strongest quarter of the year So to say that a slight growth is in fact a quite strong growth Q&Q given the seasonality pattern of the industry.

We have not taken in seasonality into consideration here. So yeah, we see a slight increase in for recticon publishers quarter on quarter.

Okay, good. Thank you. And my next question is regarding the Payments that you are receiving from the sale of the Basumba assets, have they arrived as planned? Have you seen any increased risk or decreased risk for these going forward?

They are as expected. We divested with late Q3 and it was no upfront payments for the divestment and we have started to receive funds as expected.

Okay, thank you. That was all for me. Thank you, Rickard.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Let's look at the questions.

As a one. One question relates to how much was received to the Kazumba sales and that we covered in the presentation. So to date, we've received 0.4 million. Do you expect to be able to collect the full 12 million related to divestment within the agreed time period? And as I also mentioned in the presentation, the current value we have for this balance is around seven, million and will continue to monitor this balance and update the market accordingly. There's another question related to the settlement of the earn out. Why only 405k was settled? Previous quarter it has been much higher and this the sort of level of the settlement depends on the quarterly free cash flow and it's an estimate of the quarterly free cash flow as well so if there is if there are any adjustments that will come in the following quarter but it is a variable part of the free cash flow in that specific quarter

Then it's a question, excuse me, when are you targeting to return to growth? We are confident in our strategy, but we are not forecasting or guiding on when we will return to growth. And it's a question, do you plan for further cost reductions? To be cost discipline is important for us, but we have done a lot of cost savings the last two years and we are comfortable with the position we are in at the moment.

Yeah, then there is a question around working capital related to both the receivable from the disposal and the earn out and our capabilities of meeting these payments. And as we stand as of now is that we expect to be able to settle all of these earners with the projected cash flow. with the addition of the existing facility we have in place. Then there's a question around the current market capitalization around eight million compared to the company's asset value and if there are any additional risk in impairments and no not today there are not so these assets values are checked and assessed every quarter and specifically at the year end as well based on the forecast and DCF calculation based on that there's obviously always uncertainties and subjectivity in forecast but this is where it stands at the moment.

Okay, I think that was all questions. Thank you all for listening in and we see you again when we will report the Q1. Thank you and have a good day.