Aspire Global: First comment Q3, crushing the estimates2018-11-08 18:35
Aspire Global´s third quarter was much better than what we expected. After the strong second quarter, that was somewhat driven by an unusually strong Hold, we expected a slight drop in the revenue levels. As anticipated, the Hold returned to more normal levels, however, the customer intake continued to develop extremely strong. In just a half year, comparing Q1 with Q3, the FTDs numbers have increased with 40%. Following the report, we will have to adjust our estimates.
Aspire Global´s revenue came in at approximately MEUR 28.6 (estimated MEUR 23.8) which was 20% above our estimates. The sportsbook continued to show strong growth with a Q/Q growth of 30%. The main underlying driver is the large increase in FTDs, 51% Y/Y and 20% Q/Q. In the B2C business area, the increase is driven by a large increase in marketing activities, resulting in a 37% marketing/revenue ratio for the B2C business area. Due to the increased marketing expenses, the EBITDA margin decreased slightly compared to the second quarter. However, the EBITDA was still 41% above our estimates, with MEUR 6.2 (estimate MEUR 4.4).
On the business area level, both B2B and B2C outperformed our estimates. The revenue for B2B and B2C outperformed the estimates with, 20% and 22% respectively. Moreover, of the underlying KPIs, the B2B customer intake is the most impressive, with an FTD increase of 56% Y/Y and 23% Q/Q. The business area EBITDA was far above our estimates for both B2B (35%) and B2C (51%).
In the end, we can conclude that we have underestimated the positive effects of the new sportsbook vertical and operating improvements, as well as the different brand's ability to attract new customers. The underlying trend for the last two quarters has been much stronger than anticipated.
Following the Q3 report, we will review the case and follow-up with a research update.
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