Rivalry Announces Record Fourth Quarter, Year-End 2022, and All-Time High Quarterly Revenue In Preliminary Q1 2023 Results

April 26, 2023
Transformative FY22 Drives Enhanced Company Economics in Preliminary Q1 2023 Results with All-Time High Quarterly Revenue of $12M and Continued Trend Toward Profitability
  • Triple-digit growth across all key metrics in FY2022, with full-year betting handle 1 up 198%, revenue up 140%, and gross profit up 349%.
  • New quarterly records established in Q4 2022, with betting handle of $83.9 million (up 237% YoY), revenue of $9.4 million (up 338% YoY), and gross profit of $5.0 million (up 1,152% YoY).
  • Quarterly records exceeded in preliminary Q1 2023 results, with betting handle of $120.2 million (up 199% YoY), revenue of $12.0 million (up 151% YoY), and gross profit of $5.4 million (up 698% YoY). These results were achieved with a 10% reduction in marketing spend YoY.
  • Unique product offering continues to spur meaningful growth and differentiate the Company, with esports representing nearly 90% of sports betting handle in 2022.
  • Total user registrations grew to 1.5 million, with Millennial and Gen Z consumers representing 97% of active users.
  • Well capitalized with no debt, supporting continued execution of growth strategy as the Company trends towards profitability.

TORONTO, April 26, 2023 (GLOBE NEWSWIRE) --  Rivalry Corp. (the “Company” or “Rivalry”) (TSXV: RVLY) (OTCQX: RVLCF) (FSE: 9VK), an internationally regulated sports betting and media company, today announced its financial results for the three and 12-month periods ended December 31, 2022. The Company also announced preliminary results for the three-month period ended March 31, 2023. All dollar figures are quoted in Canadian dollars.

“Our market strategy and operational excellence continues to build upon consecutive record-setting quarters, driving a strong finish to the year and a robust Q1, while simultaneously demonstrating sequential narrowing losses on our path to profitability,” said Steven Salz, Co-Founder and CEO of Rivalry. “Underpinning our growth is significant brand loyalty among the Millennial and Gen Z audience and true product innovation in online betting, enabling every marketing dollar to go further, enhancing retention, and creating a distinctly unique platform. Rivalry continues to be economically rewarded for taking an inventive approach to the betting experience and tailoring it for a demographic with unique consumption habits.”

Full-Year 2022 Financial Highlights

  • Betting handle was $232.8 million in 2022, an increase of 198% compared to $78.2 million in 2021.
  • Revenue was a record $26.6 million in 2022, an increase of 140% from $11.0 million in 2021.
  • Gross profit was $9.8 million in 2022, an increase of $7.6 million or 349% from $2.2 million in 2021.
  • Net loss for the year was $31.1 million, compared to a net loss of $24.3 million in 2021. The 2022 net loss includes $8.2 million of share-based compensation expense, a non-cash item, compared to $10.5 million of share-based compensation expense in 2021.
  • The Company had $16.4 million of cash and no debt as at December 31, 2022.2

Fourth Quarter 2022 Financial Highlights

  • Betting handle was $83.9 million in Q4 2022, a year-over-year increase of 237% compared to $24.9 million in Q4 2021, and up 19% sequentially from the previous record quarterly handle of $70.3 million in Q3 2022.
  • Revenue was $9.4 million in Q4 2022, a year-over-year increase of 338% from $2.2 million in Q4 2021, and represented the Company’s highest-ever revenue up to that point. Revenue was up 32% sequentially from $7.1 million in Q3 2022.
  • Sportsbook revenue of $7.1 million in Q4 2022 was $1.0 million higher than in Q3 2022, driven by a very strong month in October. Gaming revenue of $2.3 million was up by $1.2 million or 119% over Q3 2022, as the Company began offering a wider set of casino games on its Casino.exe platform.
  • Gross profit was $5.0 million in Q4 2022, a year-over-year increase of $4.6 million from $0.4 million in Q4 2021, and up 139% sequentially from $2.1 million in Q3 2022.
  • Net loss for Q4 2022 was $12.3 million. The net loss included $6.4 million of share-based compensation, a non-cash expense that is not expected to recur in future periods, as well as non-recurring spending of $1.1 million. Absent those non-recurring items, the Q4 2022 adjusted net loss was $4.9 million3, in line with a trend of narrowing losses over the past four quarters.

First Quarter 2023 Preliminary Results 4

  • Betting handle for the three-month period ended March 31, 2023 was $120.2 million, an increase of $80.0 million or 199% from $40.2 million in Q1 2022. Betting handle increased by $36.2 million or 43% from the previous quarterly record of $83.9 million in Q4 2022.
  • Revenue for Q1 2023 was $12.0 million, an increase of $7.2 million or 151% from $4.8 million in Q1 2022, and up $2.5 million or 27% over Q4 2022 revenue of $9.4 million.
  • Gross profit was $5.4 million in Q1 2023, an increase of $4.8 million from $0.7 million of gross profit in Q1 2022, and up $0.4 million or 9% from Q4 2022 gross profit of $5.0 million.
  • These results were achieved with a 10% reduction in marketing spend YoY.
  • Net loss was $3.5 million for Q1 2023, compared to a net loss of $6.6 million in Q1 2022.

Operational Highlights

  • Rivalry obtained licences in its first two fully regulated markets, commencing gaming operations in Ontario on April 4, 2022 and in Australia on May 9, 2022.
  • The Company added mobile esports to its sportsbook in March 2022, enabling customers to wager on a variety of competitive esports played on mobile devices.
  • The Company entered the casino segment with its first third-party game in Q3 2022 and launched its proprietary platform Casino.exe in the fourth quarter with several additional games.
  • Customer registrations increased to approximately 1.5 million by the end of Q1 2023.
  • Rivalry’s creator partner network and owned media properties reached a total of 85 million followers, deepening reach, acquisition, and engagement among core target audience.
  • Company brand strategy helped maintain market-leading position among next generation of bettors, with Millennial and Gen Z consumers accounting for 97% of active users in 2022.
  • Esports betting continues to drive significant growth, representing nearly 90% of sportsbook handle in 2022.
  • The Company expanded its casino offering in January 2023 with eight new titles including live dealer and table games, and debuted Casino.exe in its home market of Ontario in March 2023.
  • On April 26, 2023, Rivalry announced a private placement for gross proceeds of up to $10 million (the “Private Placement”) with participation from key sports betting, technology, and payments stakeholders, signaling a vote of confidence in the Company’s user economics and ability to execute within this emerging vertical. The Private Placement is expected to close in one or more tranches commencing on or about May 5, 2023.

Outlook

“We have reached an inflection point in the business where the economic return of our strategy and unique position at the intersection of esports and betting has outlined a clear path to profitability,” Salz added. “We are well-positioned to scale efficiently throughout the year, with a collection of near and long-term initiatives that will contribute to our disruptive product and brand.”

Initiatives the Company expects to drive continued growth in 2023 include:

  • Expanding our esports offering to deepen our core product, attract new customers, and establish the most comprehensive product globally.
  • Continued evolution of our interactive Casino.exe platform and release of additional proprietary and third-party games that cater to our core demographic and further establish a betting experience unique to Rivalry.
  • Continued product development, including new betting markets and proprietary platform features, to meet shifting consumption habits of Millennial and Gen Z consumers.
  • Launch of a mobile app in our regulated markets to increase accessibility of our product and player acquisition.
  • Geographic expansion to increase our addressable market and customer base.
  • Expanded brand execution through premium content, creator partner programming, and community activations to enhance customer engagement and retention, solidifying Rivalry’s leadership position among next generation consumers.
  • Continuing to grow our investor base through proactive capital markets outreach.

Investor Conference Call

Management will host a conference call at 10:00 a.m. EDT on Wednesday, April 26, 2023 to discuss the Company’s year-end and fourth quarter 2022 financial results.

Dial-in: 888-886-7786 (toll free) or (+1) 416-764-8658 (local or international calls)

Webcast: A live webcast can be accessed from the Events section of the Company’s website at www.rivalrycorp.com or at this link.

A replay of the webcast will be archived on the Company’s website for one year.

Rivalry’s financial statements and management discussion and analysis for the year ended December 31, 2022, which includes a Letter to Shareholders from Steven Salz, are available on SEDAR at www.sedar.com, and on the Company’s website at www.rivalrycorp.com.

About Rivalry
Rivalry Corp. wholly owns and operates Rivalry Limited, a leading sport betting and media company offering fully regulated online wagering on esports, traditional sports, and casino for the next generation of bettors. Based in Toronto, Rivalry operates a global team in more than 20 countries and growing. Rivalry Limited has held an Isle of Man license since 2018, considered one of the premier online gambling jurisdictions. Rivalry holds a sports bookmaker license in Australia and an internet gaming registration in Ontario and is currently in the process of obtaining additional country licenses. The Company also has a variety of originally developed products, including Quest, an on-site engagement experience, a first-party casino game called Rushlane, and a proprietary casino platform that houses third-party games, Casino.exe.

Investor Contact:
Oakstrom Advisors
Jeff Codispodi
investors@rivalry.com

Rivalry Contact:
Cody Luongo, PR & Communications
cody@rivalry.com
203-947-1936

Non -IFRS Measures

Adjusted net loss is a non-IFRS financial measure that the Company uses to assess its operating performance. Adjusted net loss is defined as net loss, adjusted for non-recurring share-based compensation and cash and non-cash expenses. This data is furnished to provide additional information and is a non-IFRS measure and does not have any standardized meaning prescribed by IFRS. The Company uses this non-IFRS measure to provide shareholders and others with supplemental measures of its operating performance. As other companies may calculate this non-IFRS measure differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies.

Financial Outlook

This news release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for the Company’s forecasted revenue, gross profit and net profit/loss for the three months ended March 31, 2023 and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements” below. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading "Cautionary Note Regarding Forward-Looking Information and Statements" below, it should not be relied on as necessarily indicative of future results.

Cautionary Note Regarding Forward-Looking Information and Statements

This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws (“forward-looking statements”). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “project” and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions “may” or “will” occur. These statements are only predictions.

Forward-looking statements are based on the opinions and estimates of management of the Company at the date the statements are made based on information then available to the Company. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Forward-looking statements are subject to and involve a number of known and unknown, variables, risks and uncertainties, many of which are beyond the control of the Company, which may cause the Company’s actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors, among other things, include regulatory or political change such as changes in applicable laws and regulations; the ability to obtain and maintain required licenses; the esports and sports betting industry being a heavily regulated industry; the complex and evolving regulatory environment for the online gaming and online gambling industry; the success of esports and other betting products are not guaranteed; changes in public perception of the esports and online gambling industry; failure to retain or add customers; the Company having a limited operating history; negative cash flow from operations; operational risks; cybersecurity risks; the impact of the COVID-19 pandemic; reliance on management; reliance on third parties and third-party networks; exchange rate risks; risks related to cryptocurrency transactions; risk of intellectual property infringement or invalid claims; the effect of capital market conditions and other factors on capital availability; competition, including from more established or better financed competitors; and general economic, market and business conditions. For additional risks, please see the Company’s prospectus dated September 17, 2021 and other disclosure documents available on the Company’s SEDAR profile at www.sedar.com.

No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES.

Source: Rivalry Corp. 

1 The Company defines “Betting Handle” or “Handle” as the total dollar value accepted in wagers, adjusted for cancellations and corrections.
2 Includes cash and cash equivalents of $12.2 million and restricted cash of $4.2 million.
3 Adjusted net loss is a Non-IFRS Measure. See “Non-IFRS Measures”.
4 Preliminary and unaudited financial results are subject to customary financial statement procedures by the Company and its auditors. Actual results could be affected by subsequent events or determinations. While the Company believes there is a reasonable basis for these preliminary financial results, the results involve known and unknown risks and uncertainties that may cause actual results to differ materially. These preliminary fiscal results represent forward-looking information. See “Cautionary Note Regarding Forward-Looking Information and Statements” and “Financial Outlook”.


Primary Logo

Source: Rivalry Corp.