Rivalry posts record revenue of almost $9M, cuts losses by 50% in Q1

Canadian esports, sports betting and media company Rivalry has cut losses by 50% in the first quarter of the year as revenues reached a new all-time high. Revenue amounted to a record CAD 12 million ($8.8 million) for the first three months of the year, growing a staggering 151% on a yearly basis and 27% from Q4 2022. Results were driven by an all-time high betting handle of CAD 120.2 million ($88.6 million), up 199% year-over-year and 43% sequentially.

As it continues its path to net profitability, the Toronto-based firm cut down net losses by 50% from CAD 6.6 million ($4.8 million) in Q1 last year to CAD 3.3 million ($2.4 million) last quarter, the fifth consecutive sequential decrease. Gross profit for the three-month period ended March 31 was CAD 5.4 million ($4 million), up 698% year-over-year and 9% sequentially.

In its quarterly report, the esports-first operator said that product and tech innovation efforts continue to drive record user engagement and establish its brand among “the next generation of fans.” Registrations doubled year-over-year, reaching 1.5 million users, with Millennials and Gen Z representing 97% of active users.

“Our position at the intersection of esports and entertainment continues to create operating leverage in the business and drive organic growth as seen in our most impressive quarterly results to date,” said Steven Salz, Co-Founder and CEO of Rivalry. 

1/🚀We just announced Q1/23 results, our most impressive yet, achieving all-time highs across every core KPI, while net loss decreased by 50% YoY (5 q's in a row now of declines). Here’s the TLDR and what’s driving our consistent quarterly growth 🧵... https://t.co/5dxSak0xwW

— Steven Salz (@StevenSalz) May 24, 2023

“Rivalry’s content and brand strategy are setting the industry precedent for betting entertainment, allowing us to acquire customers profitably and engage them through authentic touchpoints without having to consistently deploy additional marketing and promotional spend for growth. And it is this approach that is generating breakthrough industry economics, user engagement, and charting a path to profitability for the company that we are very bullish on.”

The company described itself as “well capitalized with no debt,” with a cash position recently strengthened by equity financing of CAD 10 million ($7.3 million), led by sports betting, technology and payments stakeholders. Following the positive Q1 results, the business now intends to apply to uplist to the Toronto Stock Exchange.

“Building innovative products, which add to an overall unique and interactive betting experience on Rivalry, will remain a strategic focus in 2023,” Salz added. “The competitive advantage of engaging and fun products is increased user activity and satisfaction, and when combined with a profitable acquisition strategy, creates a flywheel effect in the business generating consistent organic momentum and enhancing our operational efficiency.”

As for other Q1 highlights, the company said the work of esports teams and influencers is helping to bolster customer activations during “tentpole” events. Partnerships and holdings helped Rivalry reach a total of 85 million followers in Q1 despite a 5% year-over-year reduction in marketing spend.

Access Rivalry's full Q1 results here.