Rivalry Sees 192% Rise in Q2 2023 Betting Handle, Anticipates H1 2024 Profitability
Rivalry Corp. recently disclosed its Q2 2023 financial results. The report highlights several financial metrics pertaining to the company’s performance in the igaming sector.
In Q2 2023, Rivalry’s betting handle stood at $112.2 million, a 192% increase from the $38.4 million recorded in Q2 2022. Concurrently, the company decreased its marketing expenditure by 6% year-over-year. The recorded revenue for this period was $8.5 million, which is 60% higher than the $5.3 million in Q2 2022.
The gross profit for the company in Q2 2023 was $3.8 million, up by 86% from the $2.1 million in the previous year’s second quarter. The company also noted that its casino operations added $57.5 million in handle during Q2, which provided an additional revenue stream.
However, Rivalry reported a net loss of $6.3 million for Q2 2023. This figure is slightly higher than the $6.2 million net loss recorded in Q2 2022. This increase in net loss was attributed to specific esports and sports outcomes and particular betting patterns from Gen Z users. When factoring out one-time operational expenses over the past year, the company’s operational expenses remained relatively stable.
Rivalry also introduced new offerings, including a mobile app launched in Ontario and a parlay product specifically for esports. The company reported having $14.0 million in cash reserves as of June 30, 2023, with no debts. Based on its current financial trajectory, Rivalry anticipates achieving profitability in the first half of 2024.
“In Q2 we delivered a nearly three-fold increase in handle year-over-year,” said Steven Salz, Co-Founder and CEO of Rivalry. “Increased marketing sophistication and enhancements to our core product have led to operational improvements, increased player wallet share, and a material year-over-year reduction in cost of customer acquisition, positioning us well in the coming quarters. The growing strength in these underlying fundamentals continues to validate Rivalry’s global brand leadership in esports betting, and more broadly, in delivering a world class online gambling experience for the next generation of fans.”
“Our position among young Millennial and Gen Z customers represents one of our greatest competitive advantages, but has also presented unique learnings regarding betting behaviors. Generally we experience higher margin volatility within the sportsbook among this demographic, which impacted revenue this quarter,” Salz added. “That said, challenges like this come with our position at the bleeding edge of a demographic shift in online gambling, and it has also allowed Rivalry to learn more than other operators about what is needed to succeed among this coveted cohort. In the immediate term we have been tuning our operational initiatives to address normalizing margin and seeing early results. And to contextualize the upside potential of this work, at consistent industry average margins Rivalry would have been profitable in Q1 and Q2 this year against the betting handle we generated. With these ongoing adjustments being made based on our learnings, alongside the general benefits scaling handle through growth provides to margin, we expect to reduce volatility, positively impacting bottom-line results, and propelling us to profitability in the first half of next year.”