Rivalry uses the.... P word
P........rofit coming?
Rivalry Corp has announced strong Q2 results and bravely used a word not often seen in esports: profit. Following another set of positive results, Rivalry projects profit by H124 and this doesn’t look a stab in the dark.
The company has released financial highlights here. The select figures show strong year-over-year handle and revenue growth - as I’ve come to expect from the one company showing the esports betting market how it’s done (at the moment).
Here’s a look at Q123 vs Q223 (all figures in CA$) to show some minuses as Rivalry’s highlights are all very big positive numbers, and we need to ground them a bit:
6.7% decrease in betting handle from $120.2 million in Q123 to $112.2 million in Q223
34.0% decrease in betting revenue from $10.3 million in Q123 to $6.8 million in Q223
Flatline casino revenue
The numbers are owing to a number of low probability esports results impacting margin, which was just 6.1% in Q223 and 8.4% in Q123, whereas the company reported a FY22 margin of 11.4%. Applying last year’s margin to both H123, total revenue would be $26.5 million, up 54.9% from reported revenue.
Sadly for Rivalry, H123 sports betting handle hit $232.4 million. Just $0.4 million more and the headline would have been “Rivalry takes more in handle during H123 than ENTIRE FY22”. Still, not bad progress.
“No parlay, no profit” - Ollie Ring, 2023
Probably won’t stick. If you’ve had the honour of sitting on any investor call in the last three years, especially in the emerging US market, you’ll be as sick to death of the word parlay and now same-game-parlay as I am.
However, credit where credit’s due, Jason Robins is right - that’s where the margin is. Rivalry last week announced what I believe to be esports first same-game-bet-builder product. Mr Salz dedicated it to me, following my lambasting of the generally crap esports product in my last Substack piece, and I suggested Rivalry’s revenue line will also reap the rewards.
With some blockbuster events coming up in the esports calendar in H223, handle will inevitably rise. Rivalry has engaged the audience in the markets it operates in, so is well positioned for some of the year’s biggest events.
The average revenue per user is traditionally substantially higher in casino, and in H123 Rivalry’s unique esports ‘tailored’ casino products have started to reap rewards, with $1.66 and $1.69 million in Q1 and Q2 respectively. If the company can achieve decent cross-sell into casino with an expected rise in traffic then the sky’s the limit.
If you’re listening, betting operators, how about some decent competition?
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