Rivalry has further cut down net losses in Q1 2023 as the international betting and media company moves ahead with its investment and development plan.
The firm – based in Toronto and listed on the TSXV – reported Q1 revenue of CA$12m as of 31 March 2023, its highest-ever figure for a single quarter and marking a growth rate of 151% year-on-year from 2022 ($4.8m).
This growth, which also represented a quarter-on-quarter increase of 27% from Q4 2022 ($9.4m), drove an uptick in gross profit. This figure rose YoY 89% from Q1 2022 ($700,000) and QoQ 9% from Q4 ($5m) to $5.4m.
Although the esports, sports betting and media firm continued to operate at a loss, this was cut down by 50% from $6.6m in Q1 2022 to $3.3m last quarter, as the operator continues to edge towards net profitability.
Overall revenue growth was driven by a yearly uptick in betting handle of 199% to $120.2m ($40.2m). As with revenue and profit, momentum in handle continued from 2022, rising 43% from $83.9m in Q4.
Steven Salz, Rivalry Co-Founder and CEO, said: “Our position at the intersection of esports and entertainment continues to create operating leverage in the business and drive organic growth as seen in our most impressive quarterly results to date.”
As with previous quarterly and full year trading updates, Rivalry attributed much of its success to an effective engagement strategy with Gen Z and millennial bettors.
Rivalry’s CEO has spoken about the company’s approach to marketing with SBC Leaders, outlining how the company places a heavy emphasis on using ‘creator’ or influencer partners and media properties.
In Q1, these partnerships and holdings reached a total of 85 million followers, bolstered by customer activations during ‘tentpole’ esports events, despite a 5% reduction in marketing costs. Meanwhile, user registrations grew 114% to 1.5 million, with Gen Z and millennials making up 97%.
Salz continued: “Rivalry’s content and brand strategy is setting the industry precedent for betting entertainment, allowing us to acquire customers profitably and engage them through authentic touchpoints without having to consistently deploy additional marketing and promotional spend for growth.
“And it is this approach that is generating breakthrough industry economics, user engagement, and charting a path to profitability for the Company that we are very bullish on.”
Rivalry closes Q1 with $13.1m in cash and no debt, whilst also having raised $7.3m through a non-brokered private placement on 26 April 2023, after which it made a $10m investment in product innovation and development.
Moving into Q2 and Q3, Rivalry aims to maintain focus on said development of both its flagship sportsbook/esportsbook product and Casino.exe igaming offering in order to maintain an advantage in competitive markets.
The company is currently active in Canada and Australia, but Salz has previously spoken to SBC about opportunities in Latin America, Southeast Asia and Europe, and the firm has been entering into creator partnerships in Brazil ahead of much anticipated regulation in the country.
“Building innovative products, which add to an overall unique and interactive betting experience on Rivalry, will remain a strategic focus in 2023,” Salz concluded.
“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.”