Financial results for Q1, as shared by Acroud, indicate steady growth amidst challenges encountered.
Acroud Faces Mixed Fortunes in Q1 as Regulatory Changes Hamper Profitability
Acroud, a leading media company in the iGaming industry, reported a mixed set of results for the first quarter of 2025. Despite registering a 3.4% year-on-year increase in revenue, reaching close to $10.7 million, the company's adjusted EBITDA plummeted by a significant 63.7% to approximately $487,000. The company also reported an after-tax loss of around $3.6 million, marking a stark contrast from the $3.1 million profit achieved in Q1 2024.
However, the fall in adjusted EBITDA and profitability did not deter Acroud from adding 72,906 new depositing customers during the quarter, marking a 60% year-on-year increase and a 69% growth compared to the preceding quarter. CEO Robert Andersson described the quarter as producing "mixed results," emphasizing the company's resilience and adaptability amid challenging market conditions.
The company's financial stability was bolstered by an initiative involving approximately $6.76 million in Super Senior Bonds, providing much-needed liquidity to strengthen Acroud's balance sheet and support future growth initiatives. The company also converted roughly $7.25 million of bond debt into equity, reducing financial leverage and establishing a more sustainable capital structure.
As part of the restructuring, Acroud acquired the remaining 49% stake in Acroud Media Ltd from RAIE Media for approximately $13.1 million. The payment was made through a combination of cash and newly issued shares, giving RAIE Media a 39% stake in Acroud.
The sharp decline in adjusted EBITDA was primarily attributed to regulatory changes in Brazil, which have created a disruptive market environment. The launch of Brazil's regulated betting market in January led to a reduction in player activity during January and February, while stringent tax conditions further impacted profitability in the iGaming Affiliation segment.
Despite these short-term challenges, Acroud remains optimistic about the long-term growth prospects of the Brazilian market. The company believes that these regulatory changes will streamline operations, allowing them to focus on innovation, market expansion, and maximizing long-term shareholder value.
In light of the regulatory changes in Brazil negatively impacting Acрод's iGaming Affiliation segment, the company's CEO, Robert Andersson, highlights the importance of investing in business strategies that promote resilience and adaptability. To further strengthen its financial position, Acрод secured an initiative involving $6.76 million in Super Senior Bonds, and converted approximately $7.25 million of bond debt into equity, reducing financial leverage and establishing a more sustainable capital structure.
