Sports betting and media firm Rivalry recorded a betting handle of $120.2 million in first quarter 2023, a 199 percent year-over-year jump, a record high and the highlight in their financial results issued Wednesday morning for the three-month period ending March 31.
“We are executing against the targeted demographic of Millennials and Gen Z consumers, which accounts for 97 percent of our active customers,” said Steven Salz, co-founder and CEO of Rivalry, during a conference call to investors. “This is a fast-consuming digitally native cohort with unique consumption habits and entertainment preferences.”
Other than the handle, the highlights include: record revenue of $12 million in Q1, a 151 percent year-over-year increase; gross profit of $5.4 million, a 698 percent year-over-year increase; a doubling of registrations year over year, reaching 1.5 million users; net loss of $3.3 million, and a 50 percent reduction from the net loss of $6.6 million in Q1 2022, the fifth consecutive sequential decrease in net loss, which Salz said spoke to the company’s focus on operational efficiency.
Salz pointed to product- and tech-innovation efforts that are driving user engagement with the next generation of fans. The entertainment and esports company, which has no debt, announced the closing of the second tranche of strategic financing.
“Building innovative products, which add to an overall unique and interactive betting experience on Rivalry, will remain a strategic focus in 2023,” Salz said in a statement. “The competitive advantage of engaging and fun products is increased user activity and satisfaction and when combined with a profitable acquisition strategy creates a flywheel effect in the business, generating consistent organic momentum and enhancing our operational efficiency.”
Salz was asked for his thoughts on the volume of igaming advertising by other operators in Ontario over the past year to drive growth, which Rivalry has avoided; he pointed to a five percent year-over-year reduction in marketing expenses.
“Our leadership position among next-generation users allows us to acquire customers profitably through organic word-of-mouth marketing and retain them through an affinity for our brand, paired with original product,” he told analysts. “The initial rush [in the sports betting industry] to acquire customers through endless player subsidies is quickly transitioning into long-term economic strategies to engage and retain customers focusing on product innovation and media brands more than ever. That’s the approach we’ve pursued since our founding.”
Salz said to expect a Rivalry mobile app in Ontario “very soon” and to look for an expansion of their esports offerings, as well as new casino games developed in-house, extending their brand reach and engagement into new regions, and “possible expansion into new markets.”