Better Collective preannounced its Q4-results due to a stronger-than-expected year-end performance. The company reported topline of EUR96.2m and EBITDA of EUR33.5m compared to our forecasts of EUR87.0m and EUR24.2m, respectively. The details provided in the full report showed that North America was the main region behind the topline beat while direct costs and staff costs were also lower than expected.

The company provided guidance for 2025 where the topline range of EUR320m-350m was somewhat softer than we expected while the EBITDA guidance of EUR100m-120m was largely consistent with our forecast. The main headwind in 2025 comes from Brazil, where the company expects EUR35m-50m of negative impact following the regulation of the market. Better Collective also updated its 2023-27E targets where now targets organic growth from 2026E while it previously forecasted a topline CAGR of +20% over the period. The change is due to the company no longer including M&A in the forecast as it will shift its focus to organic growth and its capital allocation towards share buybacks and debt reduction.

While we trim our estimates on the back of the updated guidance, we believe the earnings visibility has improved on the back of the details provided that underpins the guidance. All in all, we lower our 2025-26E topline forecasts by 6-10% while EBITDA is down 5-8%. Our new base case is SEK220 (SEK240) which implies an EV/EBITDA of 13x 2025E and 11x 2026E, while the share currently trades at 7x 2025E EBITDA and has historically traded at average NTM EV/EBITDA of around 11x.