In the three months to 31 March, Rivalry’s net revenue hit $4.5 million (£3.5 million/€4.2 million), marking a 16.7% decrease from the $5.4 million reported during Q1 of the previous year. The net revenue is derived by deducting operational expenses from the gross gaming revenue, which also saw a significant downturn. Gross gaming revenue in Q1 was reported at $7.7 million, a 35.8% drop, with declines observed across both sports betting and igaming sectors.
However, amid the less-than-stellar financial figures, the company’s CEO, Steven Salz, remained optimistically hopeful. He highlighted that Rivalry achieved a record net revenue margin of 58.5%, the highest in the company’s history. Salz also pointed out a quarter-on-quarter increase in player spending during Q1.
“We are very encouraged by the improvement to net revenue margin experienced in Q1, hitting an all-time record. This proves our strategy is delivering results, and it represents a meaningful improvement compared to the average levels experienced throughout 2023,” Salz noted.
Salz also emphasized the growing interest in the company’s original casino content, which could potentially unlock new B2B revenue opportunities. Salz hinted that more details on these opportunities would be shared in the near future.
One of the strategic initiatives that Salz discussed was the launch of the company’s new cryptocurrency token, aptly named the Rivalry Token. This new digital currency is expected to enhance the functionality, economics, and user experiences across Rivalry’s suite of products. The Rivalry Token is slated for launch in the second half of the year, with Salz stating that it is one of several initiatives aimed at penetrating the crypto gambling market and better serving its core audience of under-30 bettors.
Post-launch, the Rivalry Token will be available in all of Rivalry’s active markets, with the exception of Ontario and Australia.
“Rivalry is well-positioned to access the growth opportunity in crypto with a proven product set, a brand entrenched in internet culture, and a captive audience of digitally native users that are driving this economic renaissance,” Salz said. “The launch alongside a broader expansion into cryptocurrencies strengthens our product-market fit among an under-30 audience. It positions us competitively to capture a meaningful share of this fast-growing and highly valuable segment of the market.”
While the impact of the Rivalry Token will not fully manifest until later in the year, the company has some ground to cover to improve upon its Q1 results. Both net revenue and gross gaming revenue saw a decline year-on-year, mainly due to a significant drop in core sportsbook gross gaming revenue, which fell by 39.8% to $6.
.2 million. Gross gaming revenue from igaming also saw a decline but was not as steep, reporting $1.5 million, down 11.8% from last year.
Despite these declines, there were positive trends noted in player spending for Q1. The total betting handle during the quarter reached $94.7 million, marking an 11.3% increase from $85.1 million in Q4 of the previous year. Both net revenue and gross gaming revenue also showed quarter-on-quarter improvements, with net revenue climbing by 50.0% and gross gaming revenue improving by 20.3%.
On the operational front, deductions from gross gaming revenue amounted to $3.2 million, which is an improvement compared to the $6.5 million in deductions from Q1 of the previous year. However, total operating expenses rose by 6.7% to $9.6 million, largely driven by increased spending in marketing and promotions, as well as technology and content development. Additionally, Rivalry noted $141,083 in net financial costs.
With no tax obligations reported for the quarter, Rivalry ended Q1 with a net loss of $5.2 million, compared to a $3.3 million loss in Q1 the previous year. Factoring in a negative foreign currency translation impact of $498,111, Rivalry concluded Q1 with a comprehensive net loss of $5.7 million, wider than the $3.9 million loss recorded last year.
In conclusion, while Rivalry faces a challenging landscape with declines in both net and gross gaming revenues, the company remains optimistic about its future. The record net revenue margin, rising player spending, and strategic initiatives like the Rivalry Token all suggest that Rivalry is positioning itself for growth and long-term success in the rapidly evolving gambling market.
