Rivalry revenue rockets 93% in Q3 2022

Sports betting and esports operator Rivalry’s revenue soared 93% year-on-year (YoY) to C$7.1m (£4.37m) for Q3 2022.

This number is the highest-ever revenue in any quarter for Rivalry and is up 35% on the C$5.3m posted in Q2 2022.

Betting handle also hit record levels totalling C$70.3m, increasing 203% YoY and up 83% on the C$38.4m in Q2.

Of the total betting handle, 90% was driven by Rivalry’s esports segment.

Gross profit remained at the same level as in Q2 2022 at C$2.1m. However, this is a 263% YoY increase.

These figures are confirmation of what Rivalry expected to achieve this quarter as the firm pre-emptively announced its estimated results for the third quarter in the middle of October.

Rivalry noted it has become a market leader among next-generation consumers, with 82% of its active users being under the age of 30 and the average age of its customers being 25.

The operator also stated that it had C$23m in cash and zero debt as of 30 September 2022.

The quarter was an eventful one for Rivalry as it launched its own casino game which immediately impacted the firm’s financial performance. The game contributed 30% of the betting handle and 15% of revenue in Q3 2022.

Rivalry has continued its momentum into Q4 2022, reporting that betting handle reached C$37.2m in October with revenue of C$4.5m, which is the first profitable month in the company’s history to date.

CEO and co-founder Steven Salz said: “Our leading brand position among Millennial and Gen Z consumers was a catalyst in generating meaningful revenue from esports betting during a period of several tentpole international events, and ultimately driving record results in the third quarter.

“Our differentiated strategy and product offering is key to connecting with a demographic that legacy operators aren’t equipped to serve. We’ve created brand equity, loyalty, and consumer engagement that continue to guide our successful player acquisition and retention strategy, enhance customer unit economics, and highlight the operating leverage within the business that increases as we scale.”

Salz also spoke of how these results fit into the wider scale of the rest of the year and why the early performance in October was not overly surprising to him.

He said: “The momentum we saw during Q3 has continued into this current quarter as we delivered record results in October, including reaching our first profitable month.

“Delivering a clean net profit on a normalised basis is a promising validation of our overarching strategy, which prioritises sustainable user economics and careful capital allocation.

“While October will likely set our high benchmark in 2022 as seasonally one of the strongest months, we believe our +20% month-over-month average growth over the past year, successful casino product expansion, and increased market share ownership of esports betting positively signals directionally as to where we are headed on underlying profitability in the future,” Salz concluded.

Rivalry’s shares were down 10% to C$0.9 at the close of business on 28 November.

Salz spoke to EGR in August about the significance of being awarded a licence in his home province of Ontario and the secret behind the operator’s success in esports.