Rivalry, a leading player in the sportsbook and gaming industries, experienced a notable increase in revenue during the third quarter, with a 22.5% year-on-year rise, amassing a record-breaking period ending September 30. Growth was apparent across both its sportsbook and casino operations, yet the company faced a setback with a comprehensive loss greater than the previous year, according to the latest financial summaries.
Delving deeper into the quarterly performance, the sportsbook segment emerged as Rivalry’s predominant revenue generator, surging 42.6% to $8.7 million. Moreover, the casino business also flourished with an impressive 50.0% climb in revenue, reaching $1.5 million.
The company’s overall betting handle leaped by 50.4%, amounting to $105.7 million. Of this sum, $50.4 million stemmed from the casino gaming wing, significantly propelled by recent strategic launches, notably including the establishment of Casino.exe in the Ontario region of Canada.
On the expenses front, while the cost of revenue dipped by 5.9% to $4.8 million in Q3, operating costs saw a 14.8% escalation, landing at $9.3 million. Consequently, Rivalry suffered an operating loss of $5.3 million, which nonetheless marked a marginal improvement from the $6.0 million deficit recorded in the same period the previous year.
Foreign exchange proved challenging, with a reported loss of $367,457, alongside an interest expense of $4,872. This combination left Rivalry with a net loss of $5.6 million, a slight recovery from last year’s $6.0 million loss.
The broader picture, when adjusted for a $363,133 negative foreign exchange translation difference, revealed a comprehensive loss of $6.0 million. In contrast, the preceding year’s loss stood a bit lower at $5.6 million after gaining from a positive foreign exchange translation difference of $401,071.
The nine-month performance leading up to September 30 paints a somewhat optimistic picture with aggregate revenues ballooning by 69.8% to $29.2 million. Within this figure, sportsbook operations accounted for $24.3 million, marking a robust 50.0% year-over-year increase. Gaming revenues soared to $4.9 million, an astronomical 345.5% jump from the $1.1 million seen in 2022.
However, costs also swelled in tandem, with cost of revenue ascending by 29.0% to $16.0 million and operating expenses rising by 19.5% to $28.2 million within the same period. Despite these outlays, the robust revenue performance effectively narrowed the operating loss from $18.8 million to $15.0 million.
Rivalry also faced a foreign exchange loss of $190,423 and an interest expense of $12,435, culminating in a net loss of $15.2 million for the nine-month timeframe – showing improvement over the previous $18.8 million loss. When including a $1.4 million negative foreign exchange translation difference, the comprehensive loss reached $16.7 million, still presenting a modest shrinkage in comparison to $19.1 million from the previous year.
Steven Salz, the co-founder and CEO of Rivalry, reflected on the company’s trajectory with confidence, emphasizing the consistent performances, reduced operating expenses, and significant year-over-year growth across all core metrics. He highlighted the record-low customer acquisition cost, highest-ever average handle per customer, and average revenue per user as indicators of the company’s robust health.
Salz underscored the crucial operating leverage that the company has demonstrated, paired with an improving sportsbook margin profile, which has translated into greater revenue per dollar wagered. Armed with fresh capital for growth, Salz reaffirmed the company’s profitability forecast for the first half of 2024, underscoring a steadfast belief in Rivalry’s progressive and lucrative future amidst the challenges faced.
