BetMakers Technology Group finalised a six month period of ‘significant investment’ with strong revenue growth across two of its core verticals, amid major commercial developments for the firm.
The B2B betting technology supplier, an ASX-listed enterprise, revealed revenue for 1H23 (1 July-31 December 2022) of A$46.7m, up 7.5% on corresponding H122 earnings of A$43.5m.
On the other hand, the group experienced a sharp decline in EBITDA during the second half of last year from A$S2,3m in 1H22 to a loss of A$15.4m, representing a drop of A$17.7m.
However, this can be attributed to the series of investments made by the firm across its product range, most notably the development and launch of its NextGen platform and acquisition of Penn National Gaming content.
Expenses for these investments ‘weighed on the gross margins during the half year year’, BetMakers explained, although the 7.5% revenue increase led to reduced losses.
The group reported an overall result after income tax benefit and financing cost of A$20.7m (A$27.8m), whilst the margin was even wider for losses after income tax which stood at $19,945,000 ($27,817,000).
BetMakers continued: “The company believes that the investment made puts it in a stronger position to deliver the next phase of revenue and earnings growth.
“The company is now focused on reducing and normalising the cost base and is aiming to deliver positive operational cash flows in H2 FY2023.”
Lastly, from a product perspective, the group’s Global Racing Network division experienced the greatest success in terms of percentage growth, with revenue rising by 57.7% to A$3.7m (A$2.3m).
Notable developments for this vertical during the half year included the aforementioned integration of Penn National content and lunch of fixed odds offerings in New Jersey and Jamaica.
BetMakers stressed that these developments strengthened the firm’s foothold in North American markets and established a platform for further distribution. Additionally, the group bolstered its presence in Europe through an expanded fixed odds distribution network.
The segment which delivered the single largest figure in terms of revenue was the Global Betting Services division, where income increased 20.6% to A$21.7m (A$18m)
The most notable achievement for this segment during the half year was the NextGen wagering platform launch, which is being used to power Australia’s new betting venture betr, the trading arm of industry disruptor NTD.
In a major boost to the company, BetMakers was able to secure amended terms to its contract with NTD, which saw the latter increase its annual payments to the supplier’s OM Apps subsidiary by A$2m for the first 10 years of the partnership.
At the end of 2022, Global Betting Services had onboarded a total of 26 active Australian platform clients, up from 18 the year prior, and launched the first racing betting solution at Caymanas Park, Jamaica.
The Global Tote division did not fare as well as its two counterparts, however, despite the launch of the Global Tote hub and partnerships across North America and Europe, with Caesars Entertainment in the former and Norway’s Norsk Rikstoto in the latter.
Total revenue for the vertical fell by 7.8% from A$23.2m in 1H22 to A$21.4m in 1H23, but this was buoyed by the substantial gains made by Global Racing and Global Betting, and as previously stated, BetMakers remains confident in its prospects following major investments.
Such investments included the buyout of Punting Form, completed in November, which was purchased for an initial consideration of $3 million in cash, with potential for a further $17m earn-out achievable over the next three years on the delivery of operational, revenue and profitability targets.
Finishing the first half of the 2023 ASX financial year having ‘progressed and delivered on key operational targets’, the company announced significant changes to its board in January.
Matt Davey now sits as President and Executive Chairman, former CEO Todd Buckingham is now Chief Growth Officer and has stepped down from the Board, and former COO Jake Henson is Chief Executive Officer.
Commenting at the time, Davey said: “It remains clear to me that there is no better business or investment opportunity on the international stage than what the BetMakers business currently has on a global scale.
“I am delighted, after discussions with management and Board members, to be re-investing my energy and time to deliver on these opportunities.”