Rivalry upbeat despite wider net loss and lower revenue in Q1
Rivalry Corp co-founder and CEO Steven Salz is optimistic about the sportsbook and igaming operatorâs future growth potential despite reporting an increased net loss and lower revenue in Q1, highlighting the launch of its new native crypto token as a major development.
In the three months to 31 March, net revenue hit $4.5m (ÂŁ3.5m/âŹ4.2m). This is down 16.7% from the $5.4m reported by Rivalry during Q1 of last year.
Net revenue is calculated by taking operational deductions off gross gaming revenue total. Incidentally, gross gaming revenue in Q1 was also down 35.8% to $7.7m, with declines across both sports betting and igaming.
However, when reflecting on the result, Salz was mainly optimistic. He spoke about a record revenue margin of 58.5%, the highest in the history of Rivalry. Salz also noted a quarter-on-quarter increase in player spending during Q1.
âWe are very encouraged by the improvement to net revenue margin experienced in Q1, hitting an all-time record, proving our strategy is delivering results and representing a meaningful improvement as compared to the average levels experienced throughout 2023,â Salz said.
âAdditionally, interest in our original casino content continues to build, unlocking B2B revenue opportunities that we are keen to detail more fully in the near future.â
Rivalry launches new crypto token
Salz also focused heavily on the launch of the operatorâs new crypto token: Rivalry Token. This, the operator says, will add increased functionality, economics and user experiences across its product suite.
Rivalry Token is set to launch in the second half, with Salz adding that it represents one of several forthcoming initiatives to position Rivalry in the crypto gambling market and better serve its core audience of under-30 bettors.
Following the launch, the token will be available to customers in all Rivalry active markets, excluding Ontario and Australia.
âRivalry is well-positioned to access the growth opportunity in crypto with a proven product set, a brand entrenched in internet culture and a captive audience of digitally native users that are driving this economic renaissance,â Salz said.
âThe launch, alongside a broader expansion into cryptocurrencies, strengthens our product-market fit among an under-30 audience. It positions us competitively to capture a meaningful share of this fast-growing and highly valuable segment of the market.â
Quarter-on-quarter growth for Rivalry
While the impact of Rivalry Token will not be known until later in the year, Rivalry has some work to do to improve on its Q1 results.
Both net revenue and gross gaming revenue were lower year-on-year. This was mainly due to a drop in core sportsbook gross gaming revenue, which fell 39.8% to $6.2m. Gross gaming revenue from igaming was also down but not as sharply, with the reported $1.5m down 11.8% from last year.
However, as highlighted by Salz, there was reason for positivity in terms of player spending in Q1. Total betting handle during the quarter hit $94.7m, up 11.3% from $85.1m in Q4 of last year.
Incidentally, both net revenue and gross gaming revenue were also higher on a quarter-on-quarter basis. Net revenue climbed 50.0% while gross gaming revenue improved by 20.3%.
Net loss increases in Q1
Turning now to spending, operational deductions from gross gaming revenue hit $3.2m. This is an improvement on the $6.5m deducted in Q1 of 2023.
Total operating expenses were up 6.7% to $9.6m, with higher spending across marketing and promotions, as well as technology and content. Rivalry also noted $141,083 in net financial costs.
With no tax reported, this left a net loss of $5.2m, compared to $3.3m in Q1 last year. After also accounting for a negative foreign currency translation impact of $498,111, Rivalry ended Q1 with a comprehensive net loss of $5.7m, wider than last yearâs $3.9m.
