Better Collective

Executive Summary & Thesis

Better Collective is the highest-quality way to own the affiliate-media theme: the largest, most diversified and most recurring-revenue player, emerging from a reset year back into growth, with a World Cup catalyst, a €40m buyback and a reasonable ~8× EV/EBITDA. We initiate at BUY, PT SEK150 (~+24%). Crucially, its 64% recurring revenue-share base makes it materially more insulated from the AI/SEO disintermediation threat than smaller, CPA-heavy peers — existing players keep paying regardless of new organic traffic.

FY2025 was a deliberate “rebasing year”: revenue fell 9% to €337m and EBITDA (before special items) fell 10% to €102m (30% margin), driven by Brazil’s regulatory overhaul (-€22m EBITDA), currency and weak sports margins — more than €40m of external EBITDA drag in total. With the restructuring complete (€50m cost programme), a €319m financing facility in place and net debt/EBITDA at ~2.5x, Q1 2026 marked the turn: +5% organic growth (+9% cc), EBITDA +14%, net profit nearly doubled, and North American revenue-share income up 46%. Management guides 2026 to 7–12% organic revenue growth and 8–18% EBITDA growth, with the FIFA World Cup as a near-term tailwind.

BUY · PT SEK150 (~+24%). A scaled, profitable, recovering affiliate leader with a durable recurring base, a clear near-term catalyst (World Cup), disciplined capital returns and a sensible valuation — and the best-positioned of the affiliates against the AI/SEO overhang. Pairs with Gambling.com: prefer Better Collective for quality, scale and recurring resilience; GAMB for deep-value + the OpticOdds data option (higher risk).

Business Model & Competitive Forces

Three segments, anchored by a recurring revenue-share model that behaves like an annuity.

Porter Five Forces

• ▮Substitutes — the AI/SEO threat, but mitigated. AI search disintermediates new organic traffic across all affiliates; Better Collective is the most cushioned because 64% of revenue is recurring revenue-share — an existing-player annuity independent of fresh clicks, plus owned media and the Playbook AI tool.
• ▮Barriers to entry — high. Scale, brand portfolio (Action Network), a large revenue-share database and multi-market reach are hard to replicate.
• ▮Buyer power — moderate. Operators set commercial terms and can flex marketing spend (a US-cyclicality risk), but the installed revenue-share base is sticky.
• ▮Rivalry — high. Competes with GAMB, Catena/Gentoo, Raketech and others — but is the clear scale leader.
• ▮Supplier power — low.

Situation — Reset to Recovery

The story is a completed reset turning into a catalyst-rich recovery — with a few external swing factors.

• ▮Reset complete. FY25 absorbed Brazil regulation (-€22m EBITDA), currency and record-low sports win margins; the €50m cost programme and global restructuring are done. Q4’25 was a record EBITDA quarter (€37m, +10%).
• ▮Recurring + US momentum. 64% recurring revenue; North American revenue-share income doubled in 2025 and rose 46% in Q1’26 — improving earnings quality and predictability.
• ▮World Cup 2026 tailwind. A sports-rich H2 and the FIFA World Cup are direct volume catalysts for a sports-media business.
• ▮Capital returns. €40m annual buyback (on top of ~6% of shares repurchased in 2025 and 1.8% cancelled); net debt/EBITDA targeted below 3x.
• ▮Swing factors. Brazil regulatory normalisation, US operator marketing-spend cyclicality, sports win-margin variance and FX (weak USD) all move reported numbers.

Financials

Figures in EUR. FY25 was the trough; the run-rate is re-accelerating.

Quality of earnings: improving — a high and rising recurring-revenue mix, 101% Q1 cash conversion, and disciplined cost control. The main quality caveat is reliance on sports win margins and operator marketing budgets, both of which swing quarter to quarter. EV/EBITDA ~8× on our estimate.

Forecast

Management guides 2026 to 7–12% organic revenue growth and 8–18% EBITDA growth, with 2027–28 targets of positive organic growth and a 35–40% margin.

• ▮World Cup + sports calendar: the principal 2026 volume driver; preparations underway.
• ▮US revenue-share compounding: the doubling North American base lifts recurring revenue and margin mix.
• ▮Brazil normalisation: as the new regulatory/commercial frameworks bed in, the 2025 drag fades — a swing back to growth.
• ▮Margin recovery: leaner cost base + recurring mix support the path back toward the 35–40% medium-term margin.
• ▮Our read: FY26 EBITDA of ~€110–120m (mid-guide) on which ~8× EV/EBITDA is undemanding for a returning-to-growth, recurring-heavy leader with a World Cup tailwind.

Valuation & Scenarios

At ~SEK120 (~€620m mkt cap, €260m net debt → ~€880m EV) on €102m FY25 EBITDA, Better Collective trades ~8× EV/EBITDA — and ~7.3–8× on FY26 guidance. That is a reasonable, not distressed, multiple, reflecting scale, recurring mix and recovery. Our SEK150 PT implies ~9× forward EV/EBITDA — a modest re-rate toward the 52-week high as growth and the World Cup deliver.

Risks & Verdict

The risks are the sector overhang plus a few external swing factors — less acute here than at smaller peers.

• ▮AI / SEO disintermediation. The sector-wide structural threat to affiliate traffic — mitigated by the 64% recurring base, owned media and Playbook AI, but not eliminated; it caps the multiple.
• ▮US revenue-share cyclicality. Reliance on operator marketing budgets and player-loss-driven revenue share introduces variability.
• ▮Brazil. Regulatory normalisation is improving but remains a live swing factor.
• ▮Sports margins / FX. Win-margin variance and a weak USD move reported numbers quarter to quarter.
• ▮Leverage. Net debt/EBITDA ~2.5x — manageable, but limits flexibility if EBITDA stalls.
• ▮Regulatory / RG. Tightening gambling-advertising and responsible-gambling rules across markets.

VERDICT: BUY · PT SEK150 (~+24%). The quality pick of the affiliate complex: the scale leader, back to growth after a clean reset, with a durable 64% recurring base that blunts the AI/SEO threat, a World Cup catalyst, a €40m buyback and a reasonable ~8× multiple. Higher-conviction than Gambling.com — own Better Collective for the resilient, recurring, catalyst-driven recovery; pair with GAMB only for incremental deep-value/data-option exposure. The AI/SEO overhang keeps this from being a table-pounder, but the risk/reward is favourable.

SOURCES & FLAGS. Price ~SEK120 (Investing.com/Simply Wall St/Yahoo, early-Jun 2026; 52-wk SEK95.35–148.30; mkt cap ~SEK6.6–7.0bn; ~62m shares; EPS TTM ~€0.40). Fundamentals from company reports (FY25 rev €337m -9%, EBITDA bef special €102m / 30% margin, FCF €38m, net debt €260m / ~2.5x, Q4’25 record EBITDA €37m; Q1’26 rev €86.3m +5% organic, EBITDA €25m +14%, net profit €7.3m, recurring ~64% / €50m, US revenue-share +46%; FY26 guide 7–12% organic / 8–18% EBITDA, €40m buyback, ND/EBITDA <3x; Brazil -€22m FY25 EBITDA; €50m cost programme; Playbook AI; Esports ~11% of EBITDA) via SBC News, usiGamingHub, MarketScreener, European Gaming, Globe & Mail. Co-CEOs/co-founders Jesper Søgaard & Christian Kirk Rasmussen; ~1,628 employees; owns Action Network. EV/EBITDA ~8× is OUR estimate. Rating, PT and scenarios are OUR assessment.

DISCLAIMER. Internal research note for informational purposes; not investment advice, an offer, or a solicitation.