Gaming Innovation Group Inc

OSE:GIG

Earnings Call Transcript 2024-Q3

[Hjalmar Ahlberg, analyst]

Hi, and welcome to Redeye and today's presentation of Gentoo Media's Q3 results. The results will be presented our CEO, Jonas Warrer, and I will moderate the Q&A session afterwards. And if you have any questions, please send them via the web.

With that, I leave over the word to you, Jonas. Please go ahead.

[Jonas Warrer, executive]

Thank you very much. Hi, everyone, and welcome to our Q3 presentation. My name is Jonas Warrer, CEO of Gentoo Media. Very happy to be here today. It has been an eventful quarter with a lot of things going on. So let's jump straight into it.

Starting out with the split update. The planned split of the company has been completed, and the business has also been rebranded from Gaming Innovation Group to Gentoo Media. Gentoo Media is now purely affiliate-focused business following the distribution of Platform and Sportsbook division to shareholders. And this restructuring enhances our ability to expand into new markets, invest in technology and pursue strategic acquisitions. And I think with this sort of financial flexibility and the streamlined operations we have, the company is well positioned to deliver strong returns and create substantial value for investors.

Just wanted also now when we have split and we are a pure affiliate business to explain what that means. And our business model is actually very simple to explain. We are bridge between players and operators, between players and bookmakers and casinos. And this means that we help players make informed decisions about online gambling by connecting them with the right online bookmakers and casinos.

So you can imagine, for instance, that you have a user thinking about where can you get the highest odds on Manchester United versus Liverpool. You can imagine you have a user or a player that thinks about what is the best online casino if he's living in Denmark. People, they go online and search for those things. And then it's our job and our business to engage with the user either with our websites, we have more than 100 websites or to engage with the user with our marketing campaigns.

And then the reason why we are here and why we have a good business is that we need to be good at adding value to the user, in which the user in his decisions and in the information that the user is seeking. And then hopefully, some of the users, they click on to the bookmakers and the casinos, register their account there, and this is then where we start making money.

Also just wanted to take the time to look a little bit back in time and look into Gentoo Media's evolution. Strong growth trajectory for the business with 15 successive quarters with all-time high revenue. And I think if we look back to 2019, where the new top management takes over, you can see we have had a strong period with organic growth in layman's term, where we are standing, I think where you're standing. And actually, up to 2023, didn't do any acquisitions there, but only did organic growth. And to give a little bit of flavor to that from 2019 and to 2023, organic growth was 21% in compound annual growth rate. So we're very happy with that number.

Then in 2023, we did the AskGamblers acquisition, which has been very successful. And since AskGamblers have joined us, have broken records now by quarters and by quarters. At the end of '23, we also did the KaFe Rocks acquisition that also have tried after joining Gentoo Media. And then lately, we have announced the Casinomeister acquisition that we are very excited about. And then also Titan Inc. acquisition that -- where the integration of that business has started in this quarter. A little bit more about the last 2 acquisitions later, but a very healthy period for Gentoo Media and many strong years if we look back and hopefully also many strong years when we look ahead.

Financial highlights for the quarter. The 15th successive quarter with all-time high revenue of EUR 30.4 million, up 35%, of which 12% is organic. EBITDA before special items ended at EUR 14.6 million with a 48% margin. And then EBITDA after special items ended at EUR 14 million, up 36% year-on-year with a 46% margin. And special items is that we have gone to the split of the company, and that has had some expenses in the quarter. As you can see here also mentioned Q3 had special items related to split of company at around EUR 600,000.

If we look at Media alone, and I want to highlight this number, cash flow from operations was EUR 19.9 million and including Platform and Sportsbook as per IFRS 5, reported cash flow from operations was EUR 12.2 million. We also entered a EUR 25 million revolving credit facility agreement with Citibank. Pro forma cash flow statement for Gentoo Media, for illustrative purposes, we just wanted to show how the business would have been looking if it had been stand-alone throughout the year. Very healthy business with strong cash flow from operating activities at EUR 19.9 million for Q3 and EUR 36.9 million for the first 9 months of '24.

You can also see cash flow from investing activities where we have, throughout the year, dealt with some of the deferred payments that we have had for notably KaFe Rocks and AskGamblers acquisition. And I think to add a bit of flavor there, in January, we deal with the last -- or we deal with the remaining bulk of deferred payments there and then have 2 remaining ones left for KaFe Rocks and a smaller one for Titan Inc.

Revenue split, and I think if people have seen our Q presentations before, I think some people can remember that normally our revenue share earnings is around 60% to 65%. CPA is at 10% and then the remaining part is listing fees. In this quarter, revenue share earnings makes up 58% of our revenue split, growing 24% year-on-year. A strong sales push on listing fees in Q3. And also, we'll get back to that later, a quarter with slightly lower margin when it comes to revenue share earnings, which is why it's a little bit down.

If we look historically, the margins have been low, as I said, and we are quite comfortable that it will get back up over the 60% where we normally see it. European revenue grew 51% year-on-year, driven by growth in markets outside the Nordics. And that also means that in this quarter, as in previous quarters, we keep reducing our dependency on our legacy markets where we started out, which is the Nordics. So very happy to see that this is broad growth in across Europe. Americas revenue increased 52% with revenue from North America more than doubling over the period. And Europe and Americas now make up combined 80% of quarterly revenue and remains core focus markets.

If you look down to the left of our presentation, you can see that the revenue share earnings fell Q-on-Q and down at 16.6% -- EUR 16.6 million in Q3 '24, still up 24%. But as I will get back to later, this has been a quarter where the margin has been lower than normal. Player intake in Q3 '24, we generated 112,000 first-time depositors to operators, a 2% decrease year-over-year. In 2024, we have had a strong focus on higher-value markets and reducing efforts in lower value ones.

And I think the best way to explain what this means is that at the end of the day, we want to generate players that have value. We want to generate players that deposit money with the bookmaker or with the casino, and we want to generate players that actually have activity and where we earn money. So a key metric for us here is what we call value of deposits for our combined player base. And if we look at this period from Q3 '23 to Q3 now, and we can see that we have had a decline in player intake, we can actually, at the same time, see that the value of deposits for the player base is up 36% year-over-year, and also up from Q4 where we peaked in player intake. And this is what tells me that our strategy to focus on higher-value markets is working.

In Publishing, we actually saw player intake growing by 10% year-on-year despite a focus on higher-value markets and actually abandoning efforts of reducing efforts in lower-value markets. I am so happy about that result, that's very positive. In paid, player intake declined by 16% year-on-year as expected according to our strategy. Similar to the previous quarters, most players acquired are on a deal with a revenue share component, supporting strong future recurring revenue.

Diversification strategy, also a key theme that we keep coming back to, so at the end of the day, more markets and more websites and more customers should drive revenue to mitigate risk and ensure sustained growth. If we look outside our top 5 websites, revenue grew 46% year-on-year now making up 65% of the quarterly revenue. And for our top 5 websites, revenue increased by 14% year-on-year, now accounting for 35% of the quarterly revenue. So this means if we look year-on-year, outside our top 5 websites the bulk of all the many websites we have grown more and make up more of the revenue.

Partner expansions, we have seen from Q3 '23 to Q3 this year that clients where we generate revenue above EUR 10,000 in the quarter have gone from EUR 162 to EUR 314, meaning increasing by 94%. And of course, we are also very happy to see that number, that we do business with more and more partners that contribute with meaningful revenue to us.

This has been, if I can use, I guess, a casino term, unlucky quarter. We see a low margin compared to previous quarters. So if we look at the value of deposits and then take what we have earned in revenue share earnings and then take that as a ratio over the value of deposits, we would normally expect as an affiliate to be around 10.1%, at least in the numbers that we have going many years back. And we can actually then see that in Q3, quite a drop from what we normally would expect.

And notably, I think I would highlight here that in August and September, we saw very player-friendly sports results that negatively impacted the margins and with an estimated adverse revenue effect for us in excess of EUR 1.5 million. Then going to how it's looking now because I'm sure people will ask then how it is looking now. Luckily, we have seen things going back to normal, both in October and notably in November that looks very positive.

Acquisition update. I think 2 things to highlight here, the last 2 notable ones, Casinomeister, a well-known legacy brand in the industry with a solid foundation to build upon and with strong synergies with the rest of Gentoo Media. And of course, the desire and the goal is to have Casinomeister as one of our cards when we talk about our flagship casino sites going forward. We started scratching now working with the domain and improving the business. But we are still in early phases here and are still working on more of the tech setup and the integration and the migration to our tech setup that really will enable us to work with the domain and grow the domain going forward.

If we look at Titan Inc., a leading provider of SEO and content services, the integration into our value chain began in the quarter and is expected to yield significant cost savings when it comes to SEO and content. It will also accelerate time to market, and it will enhance our operational excellence. After the quarter ended, of course, also, we have tried to further accelerate the integration of Titan Inc. And personally, I'm very excited about the opportunities here and the impact that will have on the business, notably when it comes to cost reductions in SEO and content, as I said, which are some of our primary marketing costs, but also just in terms of becoming better in those 2 vital parts of our value chain.

Broadly speaking, when we talk about acquisitions, we are, of course, continuously evaluating potential acquisition opportunities. But I think it's very important for me to highlight that we have a very disciplined approach here, ensuring that we do not take on excessive risk or overpay in pursuit of growth. And I think it's also very important for me to say strongly that acquisition in itself is not a goal and growth in itself is not a goal. We are not here to build an empire where we can get more and more people to be part of Gentoo Media here. We are here to reward our investors and to make a more and more profitable business and a more and more cash flow generative business.

Priorities for the start of 2025. Quite a lot of things, of course. But I think if I have to highlight a few things, continue to establish sports and sports betting on as gamers. We have worked on this throughout notably the second half year now of this year, but still have a lot of things to do and something that will also take time in '25. If we do this right, we think that we can double the addressable market for AskGamblers, of course, something that we are very excited about.

Also expanding Gentoo Media's reach via paid marketing channels. Our paid division has a lot of opportunity ahead of us and of course, we want to see what we can also expand that into in 2025. Then continue growing our newly acquired assets. As I said, Casinomeister, we also have the KaFe Rocks website. And then if we go a little bit further back in time, we have AskGamblers that we're, of course, also working a lot on.

Then something very important and something that has been very important for the business throughout this year. We want to reclaim the rankings that we used to have on Google with CasinoTopsOnline, one of our absolute flagship casino sites that got negatively impacted by the Google update in the Google Core update in March. We have worked throughout the year on restoring the site and making the site better. And we are obsessed with making -- with achieving being successful here and reclaiming the former rankings for the website. As it happened, there is now a new Google update rolling out right now. So interesting to see what will happen. It's still very early days there.

Then also very focused on accelerating the integration of Titan Inc. to decrease cost within SEO and content. And as I said, SEO and content costs are some of our absolute biggest marketing cost. Then, of course, if we look a little bit below all of the more, you can say, marketing-related activities, improve our media platform, our tech setup and our product quality for long-term sustainable growth.

And when we are worldwide and when we have over 100 domains, it is very important that our media platform and our tech setup is strong, that we have a centralized and automated approach. This ensures that we can operate in a lot of different countries with high quality. So very imperative that our tech and media setup is -- our media platform is strong. That will also be a focus for '25 and a lot of work has been going on in '24 to reach what I would call very important milestones in '25.

Also something that we have worked on in '24 and where I still hope to see bigger return on investment. We want to broaden our conversion rate optimization efforts to extract more value from existing traffic. And what we have done in '24, we have formed a unit around this. But you know everything when you start out, everything new takes time. And I really hope that in start of '25, we will start to see more and more results.

So hopefully, we can maybe convert our traffic 10% to 20% better and then hence, make 10% to 20% more players with the existing traffic we have. As you can then imagine, that will have a substantial impact on our business. So grow our conversion rate optimization as an area of expertise is something we are investing in and something where we want to become absolute experts and market-leading in as an iGaming affiliate.

Then, of course, also -- as always, being data-driven, further improve the consumption of data in the organization to ensure ideally that all decisions are data-driven. I would say we have enough data. We have enough dashboards for people to look at. Now it's more about ensuring that everybody is actually using the data in their daily job and in their decision-making.

Summary and outlook. Q3 was an eventful quarter with the split of the company and formal rebranding into Gentoo Media. Revenue ended at EUR 30.4 million, marking the 15th successive quarter with all-time high revenue. 58% of revenue in the quarter comes from recurring revenue share agreements, up 24% year-on-year. And similar to the previous quarters, bulk of players acquired are on a recurring revenue share deal, either pure full revenue share deal or a deal with a revenue share component. Why is that? Because we want to build and continue to build recurring revenue share as we go forward.

Europe and the Americas contributed respectively, 59% and 21% of quarterly revenue, growing 51% and 52% year-on-year. And as I said, in Europe, we see the growth is driven by markets outside the Nordics. And in Americas, we see that notably, North America revenue grew and more than doubled.

Diversification strategy was further executed in the quarter to secure sustained growth, meaning more markets, more websites and more partners drive revenue. Operational excellence, AskGamblers continues to break records. I think I've been saying that for a few quarters now, but a business that is doing amazing and the AskGamblers team is doing a tremendously good job.

We also see, and this is something that for me personally has been very important. We see a successful turnaround of a few websites that were negatively affected by the Google Core update in March '24, where we had 2 local focused websites that we target a respective country that got impacted negatively. And actually, in Q3, we have managed to turn that around and have seen traffic going up many times for those 2 assets. That is, of course, an important signal for me in ensuring that we are able to deal with a negative impact by Google that we can do a turnaround if some of our sites are negatively affected.

EBITDA margin before special items in the quarter ended at 48% and after special items, if we include the split cost at 46%. Integration of Titan Inc. has started with material cost savings within SEO and content expected going forward. And we will accelerate the integration in Q4 and also step further on in Q1, which sort of you can say the ultimate goal is that Titan Inc. is our SEO and content unit.

Strong cash flow generation post-split expands our capital allocation options moving forward, as we showed here how the business would have done as a stand-alone with a -- being a very cash flow generative business. And I'm sure that the Board looks forward to discussing all the options ahead of us when it comes to capital allocation, including share buyback, M&A or further acceleration of our organic growth strategy.

Gentoo Media remains confident in our '24 guidance, projecting revenues, as we have said earlier, of EUR 125 million to EUR 135 million and an EBITDA margin between 45% to 50%. We expect strong seasonality in Q4. I would say October was maybe a little bit more soft than I expected, but we see a very strong start to November. And we expect a very, very strong, December also looking back at all the many years that we have been in business where December stands out as the absolute pinnacle of the best month in the year.

With that, I will say thank you, and we'll go to Q&A.

[Hjalmar Ahlberg, analyst]

Okay. Thanks for the presentation. I'm going to start with a kind of general question. And you started with showing your kind of business model in one way. Could you elaborate a bit on your high focus on revenue share? How does this kind of contract work? How do you revenue? I mean, for how many years and so on, it would be interesting to hear.

[Jonas Warrer, executive]

Yes, sure. Yes. So when we -- when a user comes to our site or our marketing campaigns and clicks on to the operator and hopefully then register an account there and start depositing money, then the players said to us and then we earn what we call revenue share earnings, meaning that every month, you sort of look at what's the value of the player and then we get a percentage of that, usually around 40% to 50% of the players' loss we get paid out. And then we can say we own the player lifetime. So our focus on recurring revenue share earnings is simply to keep referring more and more players, adding more and more cohorts of players that generate revenue to us because then we know that going forward, we have a sustainable business that is well founded on revenue share from a lot of players.

[Hjalmar Ahlberg, analyst]

All right. Historically, you have provided some kind of information about the start of the next quarter, so to say. You didn't give a number this time, I think, although you did give the guidance. But could you give us some indication on the kind of trading this far in October, not a number, but if there's something that you want to highlight there?

[Jonas Warrer, executive]

Yes, between maybe 25% to 30% up October compared to the previous year. I have to be honest here, we are still closing the month of October in counting revenue. So that's why I don't actually know what it ends then. So I don't want to be too specific there. It was maybe a little bit more soft month than we have expected normally with seasonality. But then luckily, we have seen a very strong start to November or really strong start. And also, I just worry a lot. I looked at the numbers again yesterday. Normally, when we go into December, then we see December being very, very strong. So I'm very happy to see our value of deposits being at the level that it was in Q3, same level as Q2 where you actually had a Euro Cup and Copa America with a lot of activity.

So actually, if we look at Q3 isolated and we look at value of deposits, that has been a very successful quarter. But of course, surprised to see then the margin that has been that low. So with the value of deposits in mind, I'm very optimistic for Q4, then it should go even further up there. And then with margins bouncing back to normal, that should mean quite a lot of revenue for us.

[Hjalmar Ahlberg, analyst]

Right, right. And looking at your FTE intake here, I mean, you saw a good development in publishing and paid kind of trending downwards a bit. I guess that's event-driven to some extent, but you also mentioned that you're working on increasing paid media exposure. Can you elaborate a bit on that?

[Jonas Warrer, executive]

Yes. Of course, when we implement a strategy where we reduce efforts for lower-value markets, you can say that takes a bit of time to implement. There's a lot of data to look at. But I think we are now at a stage where we are over that. And now we can go more into saying, then let's look at hardcore growth now, where can we grow more again. So I think you can say for paid, there's been a sort of consolidation phase saying, what should we definitely not do anymore because we don't see any revenue in it. A little bit the same with publishing. But with publishing, I guess you can say that a lot of our assets have actually improved in the last period. So we see an increase there, right, despite that we have actually scaled down on quite a lot of activities in lower value markets.

[Hjalmar Ahlberg, analyst]

Yes. And you mentioned now when you're a stand-alone company, cash flow has improved less investments. Also a lot of questions from the audience on this. And the first question, I mean, you mentioned capital allocation. Do you have, at this stage, any priorities in terms of M&A, share buybacks, dividends, or that?

[Jonas Warrer, executive]

Good question. I would say any M&A needs to be timed there needs to be a cultural fit, a strategic fit, a business fit. And of course, the price needs to be right. It needs to be the right kind of deal structure, preferred with some kind of deferred payments. But it's not high on my wish list right now to do an M&A, I have to say. Of course, if the golden opportunity is there, we have to evaluate it. But I would prefer right now to sort of take where we are standing and optimize the business that we have now. We have, in the last period, acquired different assets, and I actually look forward to working with that and improving them.

I also think I guess you can say we're a little bit risk-cautious here. We don't want to take an excessive risk, but instead of sort, we know we have a good business right now. If we improve that by 10% or 20%, we have an even more amazing business. So there's a lot of sort of logic to actually do that. In terms of share buybacks, that's not a matter for me to decide, of course. But I'm sure this is something that the Board will discuss, including all the other options that are available to us when it comes to capital allocation.

[Hjalmar Ahlberg, analyst]

Yes. A follow-up on M&A. I mean, how is the private market, historically, the valuation is maybe a bit too high. Are you still that in the private market? Or are there a lot of targets available if you would do M&A?

[Jonas Warrer, executive]

There's a lot of targets available for M&A right now. And I think also if we look at as an iGaming affiliate, we have gone through many years where there's been a lot of consolidation in the industry. There's been a lot of industry roll-ups and a lot of acquisitions. I think from our end, we want to take it slow, but we don't want to take it faster. I can say that the other way around.

So it really needs to be the right opportunity because right now, we know that we have business that we can grow organically. And if we do that successfully, that will be a lot of money. And to the degree that we remember to have a dual focus on both organic growth and also growth by acquisition, when we are good at growing our organic business, it puts us in a better and better position to do an acquisition where we see strong synergies and where we can help the acquired business.

So I think the foundation of the business is just to have all of our fundamentals in order and be strong. And I think, for instance, that's one of the reasons why it went so well AskGamblers acquisition. I mean the team they have done an amazing job. But I think we were also in a very strong state. We are very optimized, very data-driven. So when AskGamblers joined us, we had the capacity to go in quickly and help them out and bring in the different expertise that actually improve their business also. And this is the approach that we want to take when it comes to M&A, controlled M&A.

And I think if I look at the industry, I think this is at least for me personally, some of the takeaways I've had for the industry that maybe things have been going a little bit too fast and there's been a too rapid pace of acquisitions and which is why if you look at the industry now, a lot of other competitors are in different states.

[Hjalmar Ahlberg, analyst]

And on the kind of balance sheet and debt, I guess you have no target there, but would you say that it's reasonable to assume that you would like to have a kind of debt level in this kind of business would have a strong cash flow generation?

[Jonas Warrer, executive]

We'd like to have a very strong cash flow generation, yes. Of course, when we talk about debt, I guess that's also you can say at the end of the day, a Board decision. If we see a golden M&A opportunity where we think we can make more money for investors, of course, we should go for that. I can say as the CEO, where I'm standing, strong cash flow generation. It's the bread and the butter of the company, it's the blood of the company. And I think for me, personally, this is what over time generates value for investors. So a strong focus on that one.

[Hjalmar Ahlberg, analyst]

And you added a credit facility from Citibank, I think you said. Are you also looking at, I mean, improving the terms for the financing that you have? Or are you happy with how it is right now?

[Jonas Warrer, executive]

I think it will be natural to look into that at '25 to see if there's something that can be optimized.

[Hjalmar Ahlberg, analyst]

Yes. And I mean, if you look at the you mentioned the acquisition of AskGamblers and KaFe Rocks. AskGamblers have been, I mean, tremendous growth and strong profitability. I mean, how big can that product become? I mean, is it still growing? Do you see it growing 5 years out?

[Jonas Warrer, executive]

It can still grow a lot. Yes. There's still a lot of countries that we can take market share in. Actually, if you look worldwide, it's still a relatively small domain, even though it sounds crazy to say, but a very strong business with a very strong product offering to the user. As we expand into sport here, I think we'll also just see that we double the addressable market.

And I think the next goal for us is to double the revenue that we generate with AskGamblers and then just actually just take it further and further up and then establish it as the role that it should have, I have to say, in my mind, as the biggest and the leading casino affiliate side in the industry. And then, of course, also over time, tap more and more into sports betting.

[Hjalmar Ahlberg, analyst]

Yes. And there was a question from the audience regarding sports betting. Is that AskGamblers sports available in the U.S.?

[Jonas Warrer, executive]

Yes, but nothing actually there yet really notable, and that's more down to some technical things now. We are in a migration phase for AskGamblers. It becomes a bit nerdy now, but we are in a migration phase for AskGamblers where we migrate parts over to what we can call sort of our central media platform. That's been a fairly big project and something that we hope to conclude by the start of '25 or in the first month of '25. So there has been some limits to what we have been able to do.

But of course, we have a lot of sports things going on already in Gentoo Media. And the whole idea here is that we want to make those things available to AskGamblers without having to do double development. But it all comes down to that there is a migration now that we need to complete, and we have worked on that for months and months.

And of course, when you have a site like AskGamblers, you are very risk cautious. So if you want to migrate, you want to ensure that everything is in order, that everything has been analyzed. So quite a big project and something that in the first months of '25 that we hope to sort of be able to put a cross and say done, which will then open up a lot of new opportunities for AskGamblers.

[Hjalmar Ahlberg, analyst]

Yes. And looking a bit on the regional performance here. I mean, you mentioned Europe and Americas are the 2 big markets. I guess if you start with Americas, South America is probably strong. But how is your development in the U.S. where we've seen some peers maybe having some tough times to grow from here.

[Jonas Warrer, executive]

Yes. No. But in Q3, actually, it was North America that drove most of the growth in Americas. Revenue more than doubled there for us. North America is not a big market for us. It's also a fairly, you can say, limited investment that we do there. So I'm very happy with what we make there now.

I think if I have to speak in my experience as working in Gentoo Media, the U.S. has not been what we expected it to be. The market has not been as positive and as attractive as we hoped. So for my part, I can say I'm very happy that we have made a very cautious approach there and have not invested too much because I think that at least me personally, I thought it would be the Golden Lane, the El Dorado. But there has been things have taken longer than I anticipated. And it's also been the market conditions there have also been tougher than I would have expected.

So a very cautious approach with, you can say, limited investments. And right now, I don't think we want to change that too much. We doubled revenue year-over-year. If we can continue doing that with the investment we have now, I'm very happy. And then if we are to do more in the U.S., I think it comes down to the market conditions becoming more positive than they are now.

[Hjalmar Ahlberg, analyst]

Yes. And in South America, I mean, we have the regulation in Brazil. I mean, has that been kind of a headwind for you during the regulation? And do you think it's upside potential looking into 2025 in that market?

[Jonas Warrer, executive]

I think regulation creates a lot of extra work in the quarter, you can say and in the last month, an opportunity probably going forward. As we know when the market regulates, it also enables our paid channels more. So hopefully, that's something that will open up and then just a bit more work, nothing that we're not used to. We see that as an opportunity. And of course, we hope to continue having a very good business in Brazil.

[Hjalmar Ahlberg, analyst]

And in Europe, I mean, you mentioned Nordic, I think you said was growing mostly. I mean if you look at the kind of close markets here in Sweden, do you have any take on how the tax change impacted you and the affiliate market in general?

[Jonas Warrer, executive]

Yes. So if we go back way back, let's say, 2019, our core markets were actually the Nordics. The bulk of revenue was coming from the Nordics. And we have seen over time that we have reduced the dependency there. So in Q3, actually, the growth in Europe is driven by markets outside the Nordics.

If we look into the Nordics, it's still a very positive market for us to be in both, let's say, Denmark and Sweden, for instance. I don't have any sort of see any changes in it as such. There's tons of operators to work with. It's a regulated market where you can do a lot of different things. We're happy to be here. And we have, of course, skilled teams that target all of the different countries in the Nordics. But as such, no changes in my mind as I've seen it.

[Hjalmar Ahlberg, analyst]

Yes. And you mentioned, I mean, CasinoTopsOnline, you are working on the recovering the traffic there. The Google update could potentially be a trigger or catalyst there. But do you kind of know what you need to do to improve? Or is it kind of trial and error? Or how does that work?

[Jonas Warrer, executive]

I would say, no, we have a strong opinion about what we need to do. And I think, as I said, I was very happy to see that in Q3 that we proved that we can turn sites around that got negatively impacted where we have 2 of our bigger local focused websites being turned around.

I would say with CasinoTopsOnline it has always been one of our flagship casino sites. I think if I look back in time, we were in a situation where media had to generate cash to also support the rest of the business line. So it was difficult for us to do too many changes to CasinoTopsOnline because we needed the cash in. And I think we got a little bit stuck on a trajectory where we didn't take the actions and the changes that we wanted to do to improve the domain because we had to just secure cash coming in.

So I think over time, actually, to be honest, I think the domain and the website got worse and worse in terms of adding value to the user. And then unfortunately, that had a consequence in March. And I think Google has given ample signals that at the end of the day, the rankings for them is about showing websites that has helpful content. We saw the effect of that in March. At that time, CasinoTopsOnline was probably not very helpful to the user. We have worked a lot on that, and we are confident and hopeful and optimistic that we will see a turnaround for that site with all the changes that we have made.

And I think if we look at the Google update now, what has been announced, it is also, again, helpful content. There's no changes there. And also what we have seen throughout the year. So I think for me, what we'll see in the next 2 weeks is along the same lines. We just need to remember that in order to have a business, we need to add value to the user. And otherwise, we don't really have an existence.

[Hjalmar Ahlberg, analyst]

Right. Coming back to the cash generation because there were a few more questions on that from the audience and from me as well. I mean just to understand the kind of cash flow going forward. I mean, you mentioned that acquisitions was a large part of the investment cash flow currently. So if you adjust for that, that is kind of the run rate investment that you need to do without an acquisition. Is that correct to understand?

[Jonas Warrer, executive]

Yes. So if we take operating or if we take let's just say we have an EBITDA at EUR 15 million in the quarter, right. Then we have some interest we need to pay on the bonds, a bit of CapEx what not, then I would expect us to have around EUR 10 million or EUR 11 million in cash flow per quarter, which with EUR 15 million in EBITDA in what we do now.

And then in January, we have 2 main payments of December, January. We have the last payment to Catena for the AskGamblers acquisition then we also have to KaFe Rocks. And after that, we have the outstanding deferred payments are 2 installments to KaFe Rocks at EUR 5 million each and then a small chunk to Titan Inc. I think down at EUR 1 million, if I'm not mistaken or 2x EUR 1 million, sorry.

So after January, we have dealt with the bigger ones, which respectably EUR 5 million to KaFe Rocks and EUR 15 million to Catena. And from there on, it's just about starting to pile cash up and then open up for this interesting topic that you can call capital allocation. And how many years is it now I have been in Gentoo Media, since 2017, a lot of years. It's, for me, very exciting to be able to go into a phase where we can actually discuss capital allocation and options and what to do with the cash that we keep piling up in our bank account. So very excited about that. That's something new.

[Hjalmar Ahlberg, analyst]

Okay. Final question was also some from the audience. Looking into 2025, you don't have any target for now, but do you think kind of the historical growth rates we will be able to achieve that in 2025? And do you see any kind of regions or products or anything that will drive growth in 2025?

[Jonas Warrer, executive]

I think broadly speaking, analysts, they say that the market is growing organically with 11% going forward over the next years. I would hope similar to the previous years that we are able to beat the market and grow more than 11%. Personally, I have a target around 20% in organic growth. But of course, as we get bigger and bigger, that number also get higher and higher once that gets tougher and tougher. We haven't got to finalize our budget discussions for '25 yet. So difficult to say too much about it. But of course, we are ambitious and we want to maintain the track record that we have had over the last years. I think that's the main guidance I can give at this stage.

[Hjalmar Ahlberg, analyst]

All right. Thank you very much.

[Jonas Warrer, executive]

Thank you very much.