Gentoo Media (formerly known as the Game Innovation Group) reported that its revenue for the third quarter of 2024 achieved a record increase, a result of its recent restructuring efforts and focus on high-value markets.
The company's revenue for the third quarter of 2024 grew by 35% year-over-year to 30.4 million euros ($32.2 million), with 12% coming from organic growth. This marks the 15th consecutive quarter that Gentoo has set a new revenue record.
Gentoo recently underwent a brand overhaul and completed the separation from its platform and sports betting divisions on September 30, after which the company will fully focus on its affiliate business.
This spin-off has simplified Gentoo's operations, allowing it to focus on affiliate marketing. We spoke with Chief Operating Officer Daniel Kürstein about the brand overhaul in the latest issue of Trafficology magazine.
Revenue and Profitability
In the third quarter, Gentoo achieved an EBITDA of 14.6 million euros before special items, with an EBITDA margin of 48%. After special items, EBITDA grew by 36% year-over-year to 14 million euros, with a profit margin of 46%.
Earnings before interest and taxes (EBIT) were 10 million euros, with a profit margin of 33%.
CEO Jonas Warrer stated, "We are pleased to have set a new historical high for the 15th consecutive quarter, reflecting the solid foundation we have built over the past five years. Our focus on sustainable growth strategies through revenue sharing and a cautious, rigorous approach has been very effective."
Strategic Market Focus and Player Metrics
Gentoo Media continues to focus its strategy on high-value markets, which has led to a 36% increase in the total deposits of its player base. Although the number of players has slightly decreased, the company focuses on quality over quantity in player metrics, thereby increasing the overall deposit value.
Gentoo's affiliate strategy in North America is a key area of growth, with the company's primarily US-centered platform WSN.com reaching new historical highs.
This performance came after the Google Core update in March 2024, which initially affected website rankings but has since shown signs of recovery.
Restructuring and Enhanced Financial Flexibility
The company's recent organizational changes include the divestiture of its platform and sports betting divisions, which has sharpened its focus and increased financial flexibility.
Following the restructuring, Gentoo has expanded its capital allocation options and now operates independently as a company focused on affiliate marketing. To support its strategic plans, Gentoo has secured a 25 million euro revolving credit facility with Citibank Europe, enhancing its ability to pursue targeted growth and acquisitions.
Past Partnerships and Performance Background
Earlier this year, Gentoo renewed its agreement with Betsson Group, expanding the use of its GiG Comply tool to ensure compliance and brand protection.
In the second quarter of 2024, Gentoo reported similarly strong performance, with revenue growth of 39% and an EBITDA margin comparable to the third quarter. These steady quarterly increases, especially after renaming to Gentoo Media and shifting focus to affiliate marketing, have enabled the company to achieve its full-year revenue expectations of 125 to 135 million euros, with an EBITDA margin between 45-50%.
Looking Forward
Looking ahead, CEO Jonas Warrer emphasized the importance of "organic growth and strategic acquisitions" as pillars of Gentoo's ongoing development, highlighting plans to expand affiliate products in North America and Europe, and looking forward to further progress leveraging its recent restructuring and affiliate-centered model.
