Rivalry has said it expects profitability in H1 next year as it reported a Q2 revenue increase of 60 per cent to US$8.5m, a company record for a second quarter.
Gross profit rose 86 per cent to $3.8m, up from $1.8m in Q2 last year, while net loss went up one per cent to $6.3m.
Rivalry’s betting handle climbed 192 per cent to $112.2m, while the operator reduced its marketing spend by six per cent year-on-year.
It said: “Adjusting for non-recurring items in the company’s operational expenses over the last four quarters, Rivalry is pleased to note that its operational expenses have remained nearly flat, while simultaneously delivering triple digit year-over-year growth in betting handle every quarter.
“It is this clear operating leverage trend, combined with concerted efforts to increasingly stabilise margin at scale, that has led the company to provide its H1/24 profitability guidance.”
Steven Salz, co-founder and CEO of Rivalry, said the company’s position among millennials and Gen Z customers is “one of our greatest competitive advantages” which has “also presented unique learnings regarding betting behaviours,” with “higher margin volatility within the sportsbook among this demographic” impacting Q2 revenue.
He added that due to operational work carried out, Rivalry, at consistent industry average margins, “would have been profitable in Q1 and Q2 this year against the betting handle we generated.”
“With these ongoing adjustments being made based on our learnings, alongside the general benefits scaling handle through growth provides to margin, we expect to reduce volatility, positively impacting bottom-line results, and propelling us to profitability in the first half of next year,” Salz said.
