Welcome to this Q4 presentation. To start off with, as he said, my name is Robert Andersson, I'm the CEO. With me, I also have later Patrik Bloch, who is the CFO of Operations. To start off with a brief introduction to our company, there might be some new shareholders. We were founded in 2012, so we're actually this year turning five. A bit of a milestone for us. We're over 200 employees. I think we're about 210 actually to date. We're a very diverse company in the sense that we have over 28 different nationalities, about 40% women. We now have offices in three locations. The headquarters is in Malta. We also have office in London and in Serbia. Looking at the last quarter, we had 108% growth, with a profit margin of 50%. Looking a little bit more at the financial snapshot of the Q4.
We did EUR 12.3 million in revenue, that's 108% growth, and EUR 6.2 million adjusted operating profit with a margin of 50%, as I said before. Summarizing the year a little bit, that means we totaled over EUR 40 million in revenue, the year-on-year growth for the year was 168%, and an adjusted operating profit of a little above EUR 21 million. The operating margin for the year was 53%. I do get the question a lot, actually, what are we? What does it mean? We are a lead generation company. What that means is that we do drive traffic to operators in the online casino and sportsbook market. Looking at this in a little bit more detail and how the value chain looks, this usually starts out with, or it do start out with a lead, as we call it.
That's someone that has an already an interest, a given interest in playing. What we don't do is basically shoot wide and do TV ads and market to people who doesn't have an interest. You're already interested, which means that you either do a search, or you have signed up to an email to get information, or through AdWords. AdWords is basically another version of search. It's only that you have the paid results instead. Then social media, you've all liked one of our, for example, betting pages on Facebook, et cetera. Through there, we drive traffic that has interest in already playing. We have a variety of our own websites. A few are mentioned here, AskGamblers, FreeSpins, JohnSlots, RightCasino, and SBAT, which we acquired during the quarter, which is sportsbook-focused.
In this way, we drive the players to the operators, where they then sign up, play, deposit, and generate revenue. We generate revenue in predominantly four different ways. Revenue share, which is exactly what it sounds like. It means that we have a cut of the revenue somewhere between, depending on the deal structure, I would say between 40% and 50% revenue share. We have the CPA, which is a cost per acquisition. It's an upfront payment that we get from the operators, when someone deposits money. This is predominantly used in conjunction with paid media, since we need to pay Google a lot of money every month for this. Hybrid deals is simply a mix between the two. It could be that we get an upfront and a smaller revenue share. Then we have fixed fees, which are featured position, basically advertisement.
What often happens is the player will continue to play at one operator, this is an entertainment product, and a lot of people will want to try to change. Maybe they didn't feel as lucky, maybe they didn't enjoy the product, or simply just want to try something else. Either they then go back to one of our products where they know that they can get information about the latest games or really good bonuses, et cetera. They simply start searching again, and the cycle starts over. If this cycle keeps going through and a player has an account with, for example, seven, eight operators that they have come through us, we are agnostic to where they actually play, whether you then go to that one operator, play, and we get revenue share, or if we get revenue share from over there.
In that sense, we have quite low risk in the sense that we have spread that risk. If one operator grows on the expense of another one, it simply just defers the flow of revenue for us between these operators instead. In that sense, it's quite low risk. Looking at our vision and mission before we get into the actual financials, our vision is to become the world's number one provider of high-value iGaming leads. Looking at what this actually means, world's number one, well, it's simple. We want to be not only the best, but also the largest and most profitable lead generation company in this market segment. High value, we want to have the best quality players, and we want to have the highest conversion rates, which actually says something about our own products. We need to have the best products.
Within iGaming, also, we have a clear focus. Instead of going into many different industries, we get a lot of questions, why aren't you doing loans? Why aren't you doing insurances? I think one of the things that has served us well is our focus, and working hard on building underlying products that's really good at what we do instead of spreading us too thin. Our mission is to transform iGaming through the power of choice. This is why we do what we do. We do want to be a really good consumer service, and give information that actually helps the player make really informed decisions. Looking at the strategy on how we grow this company. Organic growth, this comes mainly from making our products better, but also from having better underlying systems.
We have our own platform that is worth many years on building and continue to work on, which is called Catena Connect, that connects basically all the systems to give us benefits of scale. Then we have our BI systems. Data is incredibly important to make sure that we promote the right things to the right people with the right operators, and also, of course, keep enhancing product development. One of these examples is that AskGamblers launched a new site in the autumn. Again, we won the award for best casino website now at LAC, which was really nice. Geographical expansion is part of the strategy. This company started out with the Nordic focus when it started in Sweden, then moved into the Nordics.
After that, we have slowly but surely, or depending on your definition of slowly, we have entered new markets, and now these are our markets. Of course, we have, during 2016, put a lot of emphasis in growing in the U.K. because it's a regulated market with really sound. We also then went into United States. I will get more back to that in the end of this quarter. Our current markets are Sweden, Norway, Finland, United Kingdom, United States, Italy, Belgium, Netherlands, and Germany. Acquisitions, as you have seen, we have been active in the acquisition side of things as well, and we will continue to be. There's still a lot of work to be done and a lot of attractive acquisition prospects out there. We will see us continue doing that as well going forward.
As Patrik will show, we still have quite some money on the bank left from the bond. This is something we can expect going forward as well. Looking at the recent development a little bit. In the quarter, we did some really important acquisitions. We entered the U.S. market. We consolidated this after the quarter, however, but we did sign the deal in the quarter. We've strengthened our position even further in the U.K. through the acquisition of SBAT and casinouk.com. I think SBAT is really worth highlighting here. It's a social media sportsbook-focused site which has a lot of underlying data. They recently launched an app, first iteration that we continue to improve. There is a lot of important technology in this acquisition as well.
Not only, of course, that it makes good money, but I think there is a sound technology base that can and will be integrated into our underlying systems that's going to make this technology available for Catena as a group. Of course, we have continued to strengthen our organization. We have here also Claes with us. That's the new Group CFO that just started. Just recently in January, a COO started, which I'm extremely happy with. We still have a strong need for talent, though. The management team, you could say, is quite complete now after a year of rebuilding it. With that said, we still need to keep growing the company and especially recruiting technology and competent people. As I said, taking a leading position in the U.S. with this acquisition, we are the largest regulated affiliate in the U.S.
We only work with the licensed operators. With this, we also entered poker and to some extent, also fantasy sports. Of course, the opportunity in the U.S. is also going forward quite tremendous. We are seeing the positive indications from, for example, Pennsylvania, et cetera. If it were to be regulated, we are well-positioned to continue growing in the U.S. a lot. To end off with, I've said this before many times, but creating all these NDCs, the new depositing clients that we do, and considering that a lot of them are on revenue share, now this quarter, we generated over 67,000 new depositing clients. This builds a long-term strategic value in the company since even if for some reason you were to have, let's say that internet disappears. No, that would bad example.
All our sites were to go down, we would still have the revenue from all these old players that has already signed up. This growth compared quarter-on-quarter was almost 20%, and year-on-year, it was 170% up. Patrik?
Yes.
Some figures?
Thank you. Let's start at looking at the revenue. As Robert mentioned before, we ended up at EUR 12.3 million for the quarter, which is 108% growth year-on-year. If we look at those two numbers, paid revenue and search revenue, you see that we are growing paid revenue significantly in the quarter. This is basically because also because of the SBAT acquisition, because from now on, we will have SBAT in the paid revenue. SBAT is a lot of social, but we are paying a lot of money for actually social advertising on Facebook, Twitter, and other channels. That will be included in the paid revenue going forward. Search revenue, we have CasinoUK for December in search revenue. If you look at the expenses, we are growing very fast. We are increasing the number of employees in a rapid pace.
We are, in the end of the quarter, 190 employees, and that is of course reflecting in the personal expenses. The direct cost related to paid revenue, which is now both SBAT and Catena Media UK, is increasing, but quite in line with the expectations. Depreciation and amortization is going to increase due to our acquisitions, as we are depreciating a small amount of each acquisition as player values, and these are depreciated over three years, and they will be seen in the depreciation and amortization. Other operating expenses are increasing in line when we are growing as we are, both with the organic growth, but also when we are increasing the number of employees like we are doing right now. The non-recurring bond and IPO expenses is mostly IPO expenses, as we are working on the mid-cap move during the first half of 2017.
Also we had some legal fees remaining from the bond which we did in Q3. We look at earnings, we had a very good quarter, we had an increase of 98% compared to Q4 2015. Strong margins, we are still at 50%, and this is a slight decrease compared to last quarter. It's due mainly to the acquisition of SBAT and the increase in our paid revenue, as well as the very rapid expansion of employees or the growth of employees. We look at the full year result, like Robert mentioned before, we reached over EUR 40 million. We had an adjusted operating profit margin of 53%. We can see that we have an adjusted operating profit of EUR 21 million. If we look at the balance sheet, we are having a couple of interesting lines here which we can dig into.
First of all, we are having non-current liabilities. Non-current liabilities is partly earnout structures, as when we are doing our deals, we usually do them with earnouts. When we do earnouts, we sometimes do 12-month, but usually we do over 12-month. If we do over 12-month, we put that liability into non-current, and that's why we are increasing non-current. Also in non-current, we have the bond, which is a three-year bond, and that's why we are having this big amount of EUR 58.9 million in non-current liabilities. If we look at the earnouts, we see that EUR 26.9 million is related to earnouts. If we look at the cash, we have almost EUR 45 million as cash and cash equivalents currently, or end of Q4 actually, in the company.
We want to restate that the financial targets are remaining, like we see here, the growth in short to medium term, which is 2016 to 2018, should be exceeding 75%, including acquisition, and this is average. In long term, we are saying that we are going to exceed 25% in average, and that's including acquisitions. If we look at the short to medium term of margin, we are saying that we are going to have a margin above 50%, and in long term, we are going to have a margin above 40%. When it comes to dividend, it was a slight change in Q3 there, because before we had exceeding 50%, but due to the bond, we now say that we are going to have annual dividend of up to 50% of net profit. That is long term and not the short to medium term.
I hand over to the moderator and questions.
Thank you. Time for the Q&A session. I will start off with a question of my own, then we will hand the word to the room and also check for questions through the web and telephone. Congratulations on yet another very strong quarter and a good wrap-up of 2016. I'm curious, you're growing at a very high pace and with very strong profitability. How do you see the pricing environment changing? Is there any changes in the pricing environment? The operators are obviously very prone to pay quite generously for traffic and New Depositing Customers. Do you see any change in trends there?
The trend that we have seen over the last years is a higher willingness to pay for traffic, if anything. I think we've gotten to a point where it's kind of stabilizing. I think it's important that we will continue to have a win-win situation for us and the operator. I know that some people in our fields, they try and push the margin as high as possible. I'm a strong believer in the long-term business of it and making sure that both the operator and ourselves make money. I think that we have found quite a level. We have seen this increase in payments to the affiliate themselves is starting to level off, I'd say, but definitely not decreasing.
Okay, great. I'm thinking a bit about this paid media channel. It's clearly an important and a very powerful tool to grow your revenues. Do you intend to increase that of your total revenue mix, or how do you view that channel?
For us, this is still a bit of a balance. If you look at SBAT, that's something that's paid media, slightly higher margin paid media. Paid media is a strategically important part of what we do because it makes us flexible really quickly, because you can react much quicker with paid media than what you can do on the normal search traffic. Still, I believe that we're going to be keeping our financial targets, the 50%. That's always going to be a bit of give and take going forward.
Okay, great. Do you have many, let's say, blanks on the map for using paid media channel?
Interestingly enough, Google is opening up a lot of countries during this year. That's the information we have. We have a good relationship with Google, and the indications we get from them in opening up PPC around Europe is very positive.
Great. Do we have any questions in the room? Perhaps we could check. Here, question.
Yeah.
Please wait.
Yeah, sorry. Yeah. Hello? Yeah, perfect. I was wondering about some of your sites. Some of them are getting a little bit old. Is it something you're maintaining, or is it something going forward you're thinking about?
I think, obviously, since if you have an online product, you need to update them. Looking at some of our products, it's been a while in the product cycle. Naturally, we are investing in building new, better versions of them. That's something that you will see coming out during 2017 as well. Part of our also investments in Q3 was increasing the speed in product development, or in Q4, sorry.
How's Ask going? Is it going as expected or better than expected?
I am guessing you're referring to AskGamblers.
Yeah, AskGamblers. Sorry. AskGamblers.
Yes, it's going really well. I think that we are very happy with that acquisition. It's been performing really well since the product update.
The margin went down slowly, around 50%, a little bit. Is it something that
Yeah, if you're wondering if it's a trend, what I would say it's rather, it's a balance in investments. We are very careful to always hold our margin targets. As Patrik said, an increase in paid media will also reduce the blended margin. With that said, we also took some extra investments to increase our technology development. We now have two development teams in Budapest as well, albeit outsourced. Of course, when we saw that we had space to actually take these investments in the year while maintaining our financial targets, that's a choice we did because that's going to pay off in 2017. That's a natural variance quarter-to-quarter. You can see that go up and down a little bit around there because of investments either in paid or increase in technology, et cetera.
You mentioned mid-cap listing. Is it still going on H1?
That is going exactly according to plan, and we aim to finalize this within the first half year.
Perfect. Thank you.
Any more questions, perhaps on the telephone?
Thank you. Ladies and gentlemen, if you wish to ask an audio question, please press 01 on your telephone keypad now. As there appear to be no questions on the audio, I'll return the conference to the speakers.
Great. Thank you. It appears you were very clear in your presentation.
Excellent.
I could follow up with another question of my own. Usually, when you do acquisitions, one could read through the earn-out targets that you sometimes have quite ambitious growth forecasts or targets for these acquisitions. What kind of measures do you implement to your targets to aid them in this financial performance?
First of all, we do have a large technology base that we can integrate them in, and then we have all our tracking methodologies that we can actually increase conversion rates, et cetera. Also then they become a larger part of a larger family, which means that we can usually increase the revenue deals that they have. For example, if they have revenue share of 35%, we might be able to move that to 45%, simply because our bulk gives us that bargaining power.
Okay, great. As we now have wrapped up 2016, I'm a bit curious about what you're most excited for in 2017.
That's a good question. There's a lot I'm excited about, I think very little that I can talk about. We do have, obviously, a lot of money left for acquisitions. The entry to U.S. is extremely exciting. I'm also really happy with where we got in the organization. We have been, I shouldn't say a victim of our own success, we have been growing really fast, I feel that we are kind of catching up to ourselves and surpassing. Our technology is getting to where we wanted it a while ago. We can say that things are happening a lot quicker in the company now. I think 2017 is going to be our most exciting year yet.
Great. Thank you very much. I think we can wrap up there.