Rivalry aims for profitability by H1 2024 – strong Q2 2023 revenue growth
Rivalry Corp. anticipates profitability in H1 next year with scaled handle growth and reduced volatility. Ongoing innovations and a deep product roadmap are aimed for Millennial and Gen Z consumers.
Revenue Surge in Q2 2023, Eyes Profitability by H1 2024
Rivalry Corp. (RVLY.V), a Toronto-based esports betting specialist, has reported a substantial 60 percent increase in revenue during the second quarter of 2023, setting a new record for any second quarter in the company’s history. Rivalry anticipates achieving profitability in the first half of 2024, as indicated by its impressive financial performance.
Positive trend in esports betting
The company disclosed that it generated revenue of C$8.5 million during Q2 2023, marking a remarkable achievement and signaling a positive trend in the esports betting sector. Rivalry’s betting handle for the same quarter reached C$112.2 million, reflecting an impressive year-over-year increase of 192 percent.
Marginal increase in net loss
Rivalry managed to reduce its marketing expenditures by 6 percent when compared to the previous year. The company also reported a substantial 86 percent year-on-year growth in gross profit, reaching C$3.8 million.
Despite these promising figures, Rivalry reported a marginal increase in its net loss, up by 1 percent to C$6.3 million during the same period. Rivalry’s CEO and co-founder, Steven Salz, (pictured above), attributed this minor setback to several one-time expenses and a unique behavioral betting pattern observed among the predominantly Gen Z and Millennial customer base. This pattern resulted in higher margin volatility.
(Source: SiGMA)
Salz, however, remained optimistic about the company’s prospects, recognizing the challenges that come with being at the forefront of a demographic shift in online gambling. He 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.”
Casino added a solid revenue stream
Salz explained the positive strides the company has made, saying, “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 the cost of customer acquisition. The growing strength in these underlying fundamentals continues to validate Rivalry’s global brand leadership in esports betting and online gambling.”
Rivalry’s casino division played a crucial role in diversifying its revenue streams and mitigating the traditional esports seasonality slowdown experienced in Q2. The division contributed C$57.5 million in handle during the quarter.
What the sports betting strategist says
SiGMA News spoke with Dimitry Belianin, an experienced sports betting industry strategist. He says that Rivalry Corp’s 192 percent year-on-year increase in betting handle and 60 percent year-on-year rise inrevenue, achieved with reduced marketing spend, show a company that understands its customer base exceedingly well. Looking ahead, Rivaly Corp’s debt-free status and C$14 million in cash made it a strong contender for market leadership, especially with its focus on the millennial and Gen Z demograpics. The company is well poised for continued growth and is likely to set new industry standards in the coming years.
Path to profitability
Salz added that, “At consistent industry average margins, Rivalry would have been profitable in Q1 and Q2 this year against the betting handle we generated,” indicating a path to profitability. He believes that through continual adjustments and the inherent advantages of scaling handle through growth, margin volatility will decrease, positively impacting the company’s bottom-line results.
Rivalry recently expanded its offerings by launching a mobile app in Ontario and introducing a same-game parlay product for esports. Salz expressed confidence in these new features, stating, “This feature, and others arriving in the third quarter, strengthens our position at the edge of technical and product innovation, and more broadly, our ability to continue delivering a market-leading betting experience catered to young Millennial and Gen Z consumers.”
He concluded with an optimistic outlook, saying, “We have barely scratched the surface of the feature set on our deep product roadmap, which we are confident will enable us to win this global generational opportunity in betting.”
As of the latest trading update, Rivalry Corp. (RVLY.V) is trading at $1.70, with a decrease of -4.49 percent.
