Canada decline leaves revenue flat at PointsBet in Q2

PointsBet Reports Flat Revenue Amidst Mixed Performance in Core Markets

In its fiscal Q2 report for the period ending December 31, 2024, PointsBet recorded a total net win of AU$69.9 million (approximately £35.1 million/€42.0 million/US$43.5 million), marking no change when compared to the same quarter of the previous year.

On January 30, PointsBet released data revealing that while its sports betting net win saw a slight increase of 0.2% to AU$63.6 million, its igaming segment experienced a decline of 1.6%, settling at AU$6.3 million. The overall performance was significantly influenced by geographic market dynamics, especially in Canada.

In Canada, the outcomes of sports betting and igaming were less favorable for the operator, leading to increased customer winnings. CEO Samuel Swanell cited that online slots and NFL betting were the primary areas where players achieved greater success.

“Group net win in Q2 was adversely affected by approximately AU$3.9 million due to customer-friendly outcomes in Canada within the NFL and slots sectors,” stated Swanell. “This NFL season has demonstrated unprecedented customer-friendly results since the inception of regulated online sports betting, with the highest rate of favorites winning in nearly two decades.”

PointsBet’s experience is not an isolated occurrence within the industry; earlier this month, Flutter Entertainment also reported on unfavorable sports outcomes impacting profits in the US market, while DraftKings adjusted its full-year revenue and earnings projections downward.

Turnover Growth in Canada Fails to Offset Year-on-Year Decline

When evaluating PointsBet’s performance in Canada during Q2, total net win plummeted 10.5% year-on-year to AU$9.4 million, with declines seen across both sports betting and igaming sectors.

Specifically, sports betting net win dropped by 22.5% to AU$3.1 million, despite a considerable increase in player spending, which surged by 30.2% to AU$97.4 million. This led to a notable contraction in the net win margin, falling from 5.4% to just 3.2%.

In the igaming segment, net win also decreased but to a lesser degree, retracting 1.6% to AU$6.3 million. This occurred even as player spending rose by 19.9% to AU$310.6 million, resulting in a gross net win margin decrease from 2.5% to 2%.

Looking ahead, PointsBet has outlined its strategy for the Canadian market for the next financial year, which includes the introduction of three new content providers and an expansion of its game offerings by approximately 40%, resulting in a catalog of over 600 titles. Additional enhancements to its customer loyalty program are also slated for implementation later in FY25.

Positive Growth in Australia despite Decrease in Player Spending

Turning our attention to Australia, PointsBet’s Q2 net win increased by 1.7% year-on-year to AU$60.5 million, despite a considerable 34.4% decline in player spending, which fell to AU$591.5 million. This was characterized by an increase in net win margin, which rose from 6.6% to 10.2% for the quarter.

Notably, PointsBet exclusively offers sports betting services in Australia, while igaming is dedicated to the Canadian market.

Key performance indicators from Australia during Q2 include an 8% rise in cash-active clients and a remarkable 38% increase in total bets year-on-year. However, the average stake per bet saw a drop of 20% compared to Q2 of FY23.

Analyzing PointsBet’s H1 Performance

In conjunction with the Q2 data, PointsBet has also disclosed its financial metrics for the first half of the fiscal year. The total net win for this six-month period reached AU$135.1 million, representing a 5.5% increase from the previous year.

Of this total, AU$124.3 million was generated from sports betting, illustrating a 4.8% growth, while igaming activities in Canada contributed AU$10.9 million, showcasing a substantial 14.7% increase.

Geographically, Australia saw a 4.4% lift in total net win, totaling AU$117.1 million. In Canada, net win also rose by 14.6% to AU$18.1 million, with sports betting net win increasing 14.3% to AU$7.2 million alongside a 14.7% growth in igaming activities.

PointsBet’s overall performance highlights included a gross profit of AU$65 million, an 11.1% improvement, and a significant reduction in normalized EBITDA losses, which decreased from AU$13.3 million to AU$3.3 million.

“While we will publish full H1 results next month, we are pleased to report a $10 million enhancement in our H1 EBITDA position, leading to a loss of $3.3 million,” noted Swanell. “This signifies that the company has achieved a pivotal milestone, delivering a full-year EBITDA profit for calendar year 2024 of $8.2 million.”

No Updates on Acquisition Speculations

Notably absent from the recent earnings call was any discussion regarding ongoing reports suggesting a potential AU$300 million acquisition target for PointsBet.

In November, reports surfaced indicating that PointsBet had engaged in talks concerning a potential takeover, with discussions said to include several interested parties, including at least one from Asia. However, PointsBet has publicly refuted these claims, asserting that no formal discussions have taken place. No further statements were offered during the post-Q2 results earnings call.