Sports betting and entertainment company Rivalry Corp announced Thursday its financial results for the second quarter of the year. For Q2, the company posted a record revenue of CAD 5.3 million ($4.09 million), an increase of 60% year-over-year, and 11% sequentially from Q1; and a betting handle of CAD 38.4 million ($29.3 million), up 98% Y-o-Y but down 4% sequentially.
Momentum has now continued into the third quarter with CAD 23.4 million ($18 million) in betting handle during July, an all-time single-month record, up 66% month-over-month and more than 162% compared to last year.
The company’s recorded growth was underpinned by increased operating leverage that prioritizes customer unit economics, the Canadian operator said. Rivalry also reported a strong cash position and no debt, which provides “an important foundation for further execution.”
The company further stated it is well positioned for a strong second half of the year, with a number of catalysts to deepen its roots on a global scale.
Steven Salz, Co-Founder and CEO of Rivalry, said: “We are very encouraged by our performance in Q2, putting up significant year-over-year growth across all core metrics, and sequential growth on a number as well, despite what is a seasonally quiet quarter in the esports calendar.”
He also referred to the company’s momentum continuing into the third quarter, stating that with a number of “impactful product releases, marketing, and operational initiatives slated through the rest of year, we are hungry to demonstrate to the market the inherent operating leverage in our model.”
The company’s gross profit was a record CAD 2.1 million ($1.6 million) in the second quarter, a yearly increase of CAD 1.4 million ($1.08 million) or 206% from Q2 2021, and up 201% sequentially.
As for the first half of the year, the company posted revenue of CAD $10.1 million ($7.8 million) with a cost of revenues of CAD $7.3 million ($5.7 million). Operating expenses were at CAD $15.5 million ($12 million), including CAD $6.4 million ($5 million) in marketing and advertising, up from the same period in 2021.
1/ We reported Q2/22 earnings at $RVLY this AM, breaking records across nearly all metrics. Betting handle was $38M, +98% YoY, record revenue of $5.3M, +60% YoY, and record gross profit of $2.1M, +206% YoY and +201% QoQ. Healthy cash position and $0 debt.https://t.co/gU1NZMRYfK
— Steven Salz (@StevenSalz) August 25, 2022 Thus, the company posted a net loss for H1 of CAD $12.8 million ($9.9 million) and a total comprehensive loss of CAD $13.5 million ($10.5 million). This is an increase from its CAD $4.9 million ($3.8 million) net loss figure recorded for H1 2021.
Despite this, the company is encouraged by milestones achieved during the most recent quarter. On April 4, Rivalry commenced gaming operations in the recently launched Ontario market, and announced a launch in Australia on May 9.
“The strength in the business in the second quarter was all achieved organically and driven by our existing core market,” Salz commented. “Launching in our first two regulated markets was a very important milestone in Q2 that will help drive growth in the coming quarters as we establish our brand with consumers, deploying our ‘crawl, walk, run’ strategy that prioritizes operating with sustainable unit economics in new markets first, and scaling spend thereafter.”
The company’s founder also stated that the brand was very encouraged with its Q2 performance, “considering that we did not see a material contribution from either of these markets yet, and during what is already a seasonally quiet quarter.”
“Looking ahead, we are excited about the second half of the year,” Salz concluded. “The traditionally strong third quarter is tracking well for us. Several important platform enhancements in areas like mobile app, traditional sports offering, and our casino vertical are set to be launched in the coming months.”