Rivalry revenue grows 640% in 2021 – Full year results

Rivalry, an esports-focused betting operator, reported an impressive 640% revenue increase, reaching $11.1 million in 2021. Chief Executive Steven Salz described the year as “tremendous,” showcasing significant growth across various metrics.

The surge in revenue was propelled by a substantial rise in betting handle, which soared to $78.2 million—an impressive 202% increase year-over-year. However, this rapid expansion came with soaring operational costs, which increased over tenfold to $8.9 million. Despite these costs, Rivalry achieved a gross profit of $2.2 million, reflecting a 216.8% rise from the previous year. Nevertheless, after incurring $26.9 million in operating expenses—up 258.7%—the company reported an operating loss of $24.7 million, compared to a $6.8 million loss in 2020.

The breakdown of operating costs reveals key financial dynamics: share-based compensation expenses accounted for the largest share at $10.5 million, a stark increase from just $67,111 in 2020. Other notable expenses included $6.2 million in general and amortization costs, $6.1 million for marketing, $1.5 million attributed to bad debts, and $1.3 million for technology and content development. This array of costs ultimately resulted in a net loss of $24.7 million, marking a dramatic 258% escalation from the previous year. After adjusting for exchange rate fluctuations, Rivalry experienced a total comprehensive loss of $22.3 million, a 224.8% increase year-over-year.

Despite the financial setbacks, Salz emphasized the brand’s momentum and expansion plans. “We had a tremendous year by nearly all measures in 2021. Our team delivered triple-digit growth and secured financial resources to enhance our trajectory,” he said. He also noted that it was the first year Rivalry listed its subordinate voting shares on the TSX Venture Exchange (TSXV), further solidifying its position in the industry.

Looking ahead, Salz indicated that the growth trajectory persisted into the second quarter of 2022. “I’m pleased to report that we have continued that pacing into 2022, with our Q1 betting handle reflecting a 62% sequential growth over Q4 and an amazing 273% year-over-year increase,” he stated. In Q1 alone, the betting handle hit a record $40.2 million.

In early Q2 2022, Rivalry kicked off operations in Ontario, responding to the burgeoning market landscape as one of the first operators to secure a license there. “Our focus in 2022 is not just on growth but also on expanding our product offerings and entering new geographical markets,” Salz explained. “We aim to capitalize on what we believe is a generational opportunity to lead in betting and entertainment for the next generation. Through disciplined financial management and purposeful operational execution, we are confident that our unit economics will improve and a clear path to profitability will emerge.”

In conclusion, Rivalry’s impressive growth in 2021 underscores its potential within the esports betting sector. As the market continues to evolve, the company’s strategic focus on product development, new geographic expansion, and brand engagement positions it as a formidable player in a rapidly changing landscape.