The CA$12.0m (£7.2m/€8.2m/US$8.9m) surpassed Rivalry’s previous record of $9.4m set in the final quarter of last year and was 150.0% higher than $4.8m in Q1 of 2022.
Record revenue was accompanied by an all-time quarterly high betting handle of $120.2m. The operator was also able to reduce its net loss by 47.3%.
Reflecting on the quarter, co-founder and chief executive Steven Salz hailed Rivalry’s ongoing content and brand strategy, saying this will drive further growth in 2023.
“Our position at the intersection of esports and entertainment continues to create operating leverage in the business and drive organic growth,” Salz said.
“Rivalry’s content and brand strategy is setting the industry precedent for betting entertainment. This allows us to acquire customers profitably and engage them through authentic touchpoints without having to consistently deploy additional marketing and promotional spend for growth.
“It is this approach that is generating breakthrough industry economics, user engagement and charting a path to profitability that we are very bullish on.”
Record Rivalry Q1
Breaking down Rivalry’s performance in the three months to 31 March, sportsbook activities generated $10.3m in revenue, up 119.2% from $4.7m in 2022. Gaming revenue also hiked 4,786.4% from $33,956 to $1.7m.
Rivalry also noted that user registrations reached 1.5 million at the end of Q1, up 114.0% year-over-year. Millennial and Gen Z consumers represented 97.0% of active users.
Turning to spending, cost of revenue was 58.5% higher at $6.5m, while operating expenses increased 25.0% to $9.0m. Rivalry’s main operating costs were general and administration, which were up 80.0% to $4.5m in Q1.
This left an operating loss of $3.6m, an improvement on $6.6m in 2022. However, when also including a $320,360 gain on foreign exchange, this left a smaller net loss of $3.3m.
Rivalry also reported negative $654,836 worth of exchange rate differences from translation operations. This meant total comprehensive loss was $3.9m, some 47.3% lower than in Q1 of 2022.
“Building innovative products, which add to an overall unique and interactive betting experience on Rivalry, will remain a strategic focus in 2023,” Salz said. “The competitive advantage of engaging and fun products is increased user activity and satisfaction.
“When combined with a profitable acquisition strategy, this creates a flywheel effect in the business generating consistent organic momentum and enhancing our operational efficiency.”
Rivalry also referenced its recently announced strategic financing, which it said will allow the business to accelerate operational objectives and pursue strategic growth.
Led by sports betting, technology and payments stakeholders, Rivalry closed the first tranche of the private placement for gross proceeds on 5 May. This initial offering raised $6.9m in proceeds, with 4,611,013 subordinate voting shares sold at $1.50 each.
On 23 May, Rivalry closed a second tranche for aggregate gross proceeds of $382,499 by issuing 254,999 subordinate voting shares.
After accounting for finder’s fees, Rivalry was able to raise a total of $7.3m and issue some 4,866,012 subordinate voting shares. An additional tranche of the placement is expected to close no later than 23 June.