New launches and increased price pools drive Q1 revenue growth at Scout

Revenue for the three months to 31 March amounted to SEK13.4m (£1.1m/€1.3m/$1.6m), up from SEK8.7m in the same period last year.

Scout said much of this growth was down to the addition of new clients, with the provider having secured new partnerships with operators including ATG in Sweden and Norsk Tipping in Norway during the quarter.

While Scout was able to successfully integrate with both of the operators, it is awaiting approval from the Norwegian Ministry of Culture before it can launch with Norsk Tipping.

Scout also noted its revenue performance was helped by higher activity within its current client base compared to corresponding period last year, partially due to higher prize pools.

“The growth we demonstrate together with a favourable sports calendar and new integrations with ATG and Norsk Tipping, has put us in a strong position for the upcoming future,” Scout chief executive Andreas Ternstrom said.

“Successful launches with ATG and Norsk Tipping could transform Scout Gaming to a new level. The conditions for achieving our goals of building market-leading prize pools within fantasy sports have further improved.”

Looking at spending during the quarter and overall operating expenses were 40.4% higher at SEK30.6m, which Scout put down to higher marketing costs, in relation to increased prize pools. As such, other external expenses hiked 90.7% to SEK18.5m.

“During the quarter, we were more aggressive regarding marketing than during the corresponding quarter previous year,” Ternstrom said. “This should be seen as an investment in the future to position ourselves for a year along with a favourable sports calendar. 

“There is a relatively large flexibility in how we employ our marketing related expenses, which primarily refers to our guaranteed price pools.”

Despite posting higher revenue, increased spend meant Scout’s operating loss for Q1 amounted to SEK17.3m, wider than the SEK13.1m loss reported in the same period last year.

However, Scout benefitted to the tune of SEK8.0m in income from financial items, compared to SEK3.3m in Q1 of 2020, meaning its loss before tax was SEK9.3m, an improvement on SEK9.8m in Q1 last year.

Scout paid SEK19,000 in income tax, ending the quarter with an overall loss of SEK9.3m, compared to SEK9.8m in the first quarter of 2020.

“We are confident in being able to deliver long-term high growth in the future and will leverage the fact that we ourselves are largely building the European fantasy sports market,” Ternstrom said.