Steven Salz rolls out diversification strategy following Rivalry Q4 revenue dip

Lea Hogg 1 month ago
Steven Salz rolls out diversification strategy following Rivalry Q4 revenue dip

In the face of a challenging Q4 2023, Rivalry’s CEO, Steven Salz, (pictured above), remains optimistic, attributing the company’s resilience to its diversification strategy beyond esports. Despite a 32 percent YoY decline in Q4 revenue, amounting to $6.5 million, Salz sees Rivalry as an “increasingly diversified” entity. The dip in revenue was attributed to less favourable sportsbook outcomes during the quarter, leading to a 40 percent fall in gross profit to $3.0 million.

However, the net loss for the quarter showed a slight improvement, narrowing to $9 million from the $12 million recorded in the same period the previous year. Encouragingly, Rivalry has noted a 20 percent improvement in margins in Q1 2024 compared to FY 2023.

A positive outlook for FY 23

Despite the Q4 setback, Rivalry’s full-year results painted a more positive picture. The operator reported a 34 percent rise in revenue to $35.7 million for the year. This growth was significantly bolstered by Rivalry’s iGaming operations, with casino revenue surging 92 percent to $6.4 million. iGaming now represents 52 percent of the overall handle, highlighting its growing importance to the business.

The company also reported a 66 percent increase in gross profit to $16.2 million while the overall net loss fell 22 percent to $24.3 million. This improvement was partly driven by a reduction in costs, which decreased by $1 million to $38.9 million for 2023, thanks to reduced marketing expenses.

“Rivalry exited 2023 as an increasingly diversified company – both geographically and across our product suite,” said Salz. The company made significant strides in new segments such as traditional sports, casino, and fantasy, broadening its opportunities and positioning it for sustainable growth in the medium to long term.

Rivalry anticipates achieving profitability in H1 2024, backed by a $14 million investment received in November 2023. The company has been strategically deploying this capital to drive customer acquisition and revenue, including amplifying marketing strategies, releasing higher margin products, and developing proprietary betting experiences.

Salz, who is a passionate gamer, is optimistic about the future, stating, “The year ahead is rife with new, innovative product releases arriving in Q2 and continuing throughout 2024.” Rivalry is also exploring two significant developments to its business model since its launch in 2018. The first is a B2B vertical to license its in-house developed games, and the second is exploration and development within the crypto ecosystem. Both are expected to be impactful growth catalysts on Rivalry’s path to profitability this year.

As of now, Rivalry Corp. (RVLY.V) is trading at $0.96.

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