Esports bookmaker Rivalry has announced its financial results for Q2 2023, highlights of which include a bump in betting handle, revenue and gross profit.
Despite a Q2 net loss of CAD $6.3m (~£3.67m) — a slight increase from Q2 2022 — Rivalry announced that it expects to reach profitability in the first half of 2024.
Rivalry generated CAD$8.5m (~£4.95m) in total revenue during Q2, up 60% over last year and a record result for a second quarter, the company said.
Betting handle was also massively up, jumping from CAD$38.4m (~£22.4m) last year to CAD$112.2m (~£65.4m) — a 192% year-on-year increase.
However, net loss for the quarter was CAD$6.3m (~£3.67m; $4.65m), a slight increase over last year. In a press release, the company blamed the increased loss on “a number of low probability esports and sports outcomes,” alongside what it referred to as “unique behavioural betting habits from Gen Z users” and several one-time expenses.
Nonetheless, Rivalry said it anticipates reaching profitability in H1 2024, guidance it said is based on consistent revenue growth, cost efficiencies, brand entrenchment amongst esports and gaming demographics, slowing cost increases, and product uniqueness and innovation.
The Canada-based sportsbook also highlighted its success in customer acquisition and engagement, boasting 44% more new customers year-on-year with a 41% lower customer acquisition cost. Average betting handle per customer increased by 63% YoY. The company said its operating expenses remained nearly flat when adjusting for non-recurring items.
Rivalry has launched new product offerings in recent months. It launched an esports betting mobile app in Ontario in June, and a new same-game parlay esports product in July. In May, it partnered with Brazilian content group Tribo.
Steven Salz, Co-Founder and CEO of Rivalry, commented: “Our position among young Millennial and Gen Z customers represents one of our greatest competitive advantages, but has also presented unique learnings regarding betting behaviours. Generally we experience higher margin volatility within the sportsbook among this demographic, which impacted revenue this quarter.”
“In the immediate term we have been tuning our operational initiatives to address normalising margin and seeing early results. And to contextualise 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.”