Rivalry shifts in profitability targets and enters crypto gambling

Lea Hogg May 31, 2024

In the first quarter of 2024, Rivalry, a leading player in the online gambling industry, demonstrated resilience despite facing significant challenges. The company’s CEO, Steven Salz, lauded the sequential increases in betting handle, gross gaming revenue (GGR), and net revenue. However, the year-on-year growth is yet to make a comeback.

Q1 2024

Rivalry reported an 11 percent sequential increase in betting handle to C$94.7 million for Q1 2024 and a 20 percent sequential rise in GGR to C$7.7m. The net revenue for the quarter reached C$4.5 million, marking a 51 percent increase from Q4 2023. Despite these promising figures, when comparing Q1 2024 to Q1 2023 results, the betting handle dropped 21.2 percent, GGR declined 35.8 percent, and net revenue fell 16.7 percent.

The casino segment continues to be a strong contributor, generating 59 percent of betting handle and 19 percent of GGR in Q1 2024. However, the firm’s net loss was C$5.2 million in Q1 2024, which marked Rivalry’s narrowest net loss of the last four quarters, though it was significantly higher than the net loss of C$3.3m recorded in Q1 2023.

Salz expressed optimism about the company’s performance, stating, “Our first quarter results saw a return to growth with sequential increases in betting handle, gross gaming revenue, and net revenue.” He also highlighted the improvement to net revenue margin experienced in the quarter, hitting an all-time record, proving their strategy is delivering results, and representing a meaningful improvement as compared to the average levels experienced throughout 2023.

Rivalry reported that the net revenue margin for Q1 2024 as a percentage of GGR was 58.5 percent, which was the highest in the company’s history, compared to 45.4 percent in FY 2023. Additionally, the net revenue margin as a percentage of betting handle stood at 4.7 percent, marking the highest figure in the past five quarters. Nonetheless, the company revised its profitability target from H1 2024 to the end of 2024.

Rivalry also announced its entry into the crypto gambling segment, with the introduction of its Rivalry Token. Salz believes this step complements their existing approach, which focuses on a generation that grew up immersed in gaming and internet culture, and now extends that reach to the crypto community.

CEO comment

To increase its appeal to crypto enthusiasts, Rivalry has overhauled its homepage, launched a crypto wallet experience, and adjusted the onboarding experience for new users “to materially reduce friction while maintaining compliance.” Salz stated that the firm aims to target the “higher value crypto gambling cohort”.

“This comes at an opportune time, as momentum in crypto gambling has been building amongst our target audience and they’ve been gravitating towards it. By expanding our product offering into this segment, it positions us to compete and win as we innovate product and gain access to this higher value customer cohort,” Salz said.

Furthermore, Rivalry said it is seeing interest in licensing its first-party casino games and will soon reveal progress on advancing its B2B vertical.

Rivalry Corp. (RVLY.V) is trading at $0.76 (5.56%).