Rivalry hails diversification impact as revenue rises to $35.7m in 2023

In a preliminary results announcement, Rivalry said revenue growth was complemented by higher betting handle and gross profit. All this, it added, contributed to a 22% reduction in net loss.

Reflecting on 2023, co-founder and CEO Steven Salz highlighted the operator’s diversification as the main reason for its success. He said growth in new markets such as traditional sports, casino and fantasy, alongside its core esports offering, allowed it to emerge from 2023 as an “increasingly diversified” business.

“Last year we gained meaningful traction in new segments,” Salz said. “This is widening our opportunity set and positioning us for sustainable growth in the medium- to long-term. 

“We’re happy to have finished the year with all-time high customer economics, diversified revenue streams and a reinforced competitive moat around Gen Z betting entertainment and experiences.”

Rivalry looks beyond esports

This diversification strategy has led Rivalry into various new markets and areas. Among its new launches in 2023 were two significant roll-outs in the regulated Ontario market in Canada.

In March, Rivalry announced the launch of its online casino product in Ontario. Just a few months later, Rivalry followed this up by extending its Casino.exe sports betting brand into the market.

This expansion, coupled with a rise in demand to license in-house casino games, which in turn is accelerating the advancement of its B2B vertical, sets Rivalry up for potentially more growth in 2024.

“Our operational excellence across product and brand marketing last year are seen across positive KPI trends and continued year-over-year growth,” Salz said. 

“Ultimately, we are proving that we can acquire and retain a coveted Gen Z demographic through an entertainment-led product set, culturally relevant brand and a team unafraid of pushing past a long-standing industry status quo.”

Records tumble in 2023

While Rivalry did not publish its full results for 2023, it did reveal certain key figures to show its progress during the year.

Revenue was the headline figure, with this driven by a 92% hike in casino revenue to $6.4m. Casino also represented 52% of betting handle for the year, with total betting handle rising 82% to $423m.

Rivalry also noted all-time high average handle per customer – up almost 30% – and a record low cost of customer acquisition, down 15%. In addition, total player registrations eclipsed two million in 2023. 

All this, Rivalry said, contributed to a 66% increase in gross profit to $16.2m for the year. The operator also noted a $1.0m drop in total operating expenses to $38.9m, helped by lower marketing expenses, offsetting increases in general and administration and technology and content expenses incurred to support the growth of the business. 

Revenue growth, combined with reduced spending, left a lower net loss of $24.3m for 2023.

Positive figures despite mixed Q4

The strong preliminary figures came despite a somewhat mixed performance by Rivalry in the last quarter of 2023. 

During Q4, revenue fell 32% to $6.5m. Rivalry put this down to less favourable sportsbook outcomes compared to an abnormally favourable result experienced in 2022. Betting handle, however, edged up from $83.9m in 2022 to $85.2m.  

Gross profit was, unsurprisingly, lower in Q4, dropping 40% to $2.0m. However, there was better news in terms of net loss, which was cut from $12.3m to $9.0m. Net loss adjusting for accruals, other non-cash items and one-time costs, would have been approximately $7.0m.

Where next for Rivalry?

Keen to build on its overall success in 2023, Salz detailed Rivalry’s current strategy. During Q1, he said the operator has been strategically deploying capital from Q4 investment in areas that are driving customer acquisition and revenue. This includes amplifying proven marketing strategies, releasing higher margin products and developing proprietary betting experiences.

Salz expects this to begin materialising in its results throughout the first half of 2024 and beyond.

With this, Rivalry has re-affirmed guidance and anticipates achieving profitability in H1 2024.

“The year ahead is rife with new, innovative product releases arriving in Q2 and continuing throughout 2024,” Salz said. “In addition to the strength of our core roadmap, we are in the process of unlocking what we believe to be two of the most material developments to our business model since launching Rivalry in 2018. 

“The first is a B2B vertical to license in-house developed games. The second is exploration and development within the crypto ecosystem – each representing an impactful growth catalyst on our path to profitability this year.

“I have never had more confidence in our product roadmap and what Rivalry is building this year. Apart from new products, original games and proprietary features, we have been working to dial up the overall feel and entertainment value of our core product to provide a tech-savvy, next-generation customer with a tailored experience that is well-differentiated within the larger sports betting marketplace.”