Rivalry upbeat despite wider net loss and lower revenue in Q1

Steven Salz, co-founder and CEO of Rivalry Corp, remains optimistic about the sportsbook and igaming operator’s future growth prospects, despite reporting an increased net loss and lower revenue for Q1. In particular, Salz highlighted the upcoming launch of their new native cryptocurrency, Rivalry Token, as a pivotal development for the company.

For the three-month period ending March 31, Rivalry’s net revenue reached $4.5 million (£3.5 million/€4.2 million), representing a decline of 16.7% compared to $5.4 million in Q1 of the previous year. Net revenue is derived by subtracting operational expenses from gross gaming revenue (GGR), which also saw a significant dip of 35.8% to $7.7 million, indicating challenges in both sectors of sports betting and igaming.

Despite these figures, Salz conveyed a sense of optimism regarding the company’s performance. He pointed to a record revenue margin of 58.5%, the highest in Rivalry’s history, as a significant positive indicator. Additionally, there was an uptick in player spending observed during Q1, further adding to a cautiously optimistic outlook.

“We are encouraged by the all-time high net revenue margin we achieved in Q1, which reflects the effectiveness of our strategies. This margin represents a meaningful improvement compared to the averages observed throughout 2023,” Salz stated. He also mentioned an increasing interest in Rivalry’s exclusive casino content, which is opening doors for potential business-to-business (B2B) revenue opportunities that the company plans to explore further in the near future.

Rivalry Initiates Launch of New Crypto Token

Another focal point for Salz was the imminent launch of Rivalry Token, designed to enhance functionality, economics, and user experiences over their entire product suite. Set for release in the latter half of the year, Rivalry Token illustrates the company’s commitment to integrating cryptocurrency into its operations, catering particularly to its core audience of under-30 bettors.

Following the launch, the token will be accessible to customers in all active markets, with the exception of Ontario and Australia. Salz emphasized, “Rivalry is poised to capitalize on the growth potential within the crypto space through our established product offerings, a brand deeply rooted in internet culture, and a dedicated user base of digitally savvy individuals who are leading this economic shift.”

He added, “This launch—alongside our broader cryptocurrency initiatives— strengthens our market positioning among young audiences. We aim to capture a significant share of this rapidly expanding and lucrative market segment.”

Quarter-On-Quarter Recovery for Rivalry

While the effects of Rivalry Token will unfold later in the year, the company recognizes that improvements are essential to recover from its Q1 results. The decline in both net revenue and gross gaming revenue stems principally from a nearly 40% drop in sportsbook GGR, which fell to $6.2 million. In contrast, igaming revenue also declined but at a lesser rate, totaling $1.5 million—a drop of 11.8% compared to the previous year.

Despite these challenges, Salz highlighted positive trends in player spending during Q1, noting a total betting handle of $94.7 million, which is an 11.3% increase from the $85.1 million recorded in Q4 of last year. Notably, both net revenue and GGR experienced quarter-on-quarter growth, with net revenue rising by 50% and gross gaming revenue increasing by 20.3%.

Analysis of Increased Net Loss in Q1

Examining operational expenditures, deductions from gross gaming revenue reached $3.2 million, an improvement from $6.5 million in Q1 of 2023. However, total operating costs rose by 6.7% to $9.6 million, driven primarily by increased expenditures in marketing, promotions, technology, and content development. Rivalry also incurred net financial costs of $141,083.

With no taxes reported, Rivalry recorded a net loss of $5.2 million, an increase from last year’s Q1 loss of $3.3 million. After also considering a negative impact from foreign currency translation amounting to $498,111, the overall comprehensive net loss for Q1 totaled $5.7 million, widening from $3.9 million in the previous year.

As Rivalry navigates through these financial challenges, the strategic launch of Rivalry Token and innovations in player engagement are poised to play critical roles in the company’s recovery and growth trajectory in the competitive landscape of the gambling industry.