Sports betting and media company Rivalry Corp. issued Wednesday a letter to shareholders summarizing recent progress and outlining strategic priorities for 2023. The update states that the company experienced “a breakout year” in 2022, with “exceedingly strong performance across the business.”
Rivalry delivered triple-digit year-over-year growth in both revenue and betting handle, with average month-over-month revenue growth accelerating to 32% through the first 10 months of the year. Having achieved record results every quarter, Rivalry now believes the prospects for the business are "as strong as ever" as it kicks off 2023.
The business also reduced bonus/promotional spend relative to revenue by over 50%, and achieved its first-ever profitable month in October. These results were underpinned by greater product diversification that reduced the impact of seasonality, notes the company.
Last year, the company delivered significant growth including year-to-date betting handle increasing 181% YoY to CAD 186 million ($136.9 million), and revenue increasing 130% year-over-year to CAD 21.7 million ($16 million) in Q3 2022.
1/ 🚀 We just announced our 2023 Business Update at $RVLY. 2022 was an inflection point for us: avg. MoM rev growth hit 32% in the first 10 months, while reducing bonus/promo spend relative to rev by +50% YoY, and hit our first profitable month in Oct. https://t.co/vm3m38CKtK— Steven Salz (@StevenSalz) January 18, 2023
Rivalry also maintained a firm esports betting position, as it saw 90% of its sportsbook handle be driven by this vertical. The brand also perceived an increased market share of Millennial and Gen Z consumers, represented by 82% of its active user base being under 30-years old, and an average customer age of 25.
Expanding its esports betting product, including the introduction of mobile game titles in March, is another one of the main highlights of the company’s 2022. It also succeeded to expand into a new product category with the launch of Casino.exe, its proprietary casino interface, which drove "immediate impact," contributing 30% of betting handle and 15% of revenue in Q3 2022 with "minimal marketing efforts."
Rivalry also launched in two new regulated markets, including the province of Ontario in Canada, and Australia. “These results and signals of sustainable growth are all organic, driven by an overarching strategy that prioritizes great consumer products and brand engagement over flash-in-the-pan trends and promotional spend,” Rivalry says.
“Our approach toward attracting the next generation of consumers is different from legacy operators," Rivalry said in its letter to shareholders. We scale through word of mouth and organic market entrenchment of band equity that allows us to operate without dependency on excess bonusing and player subsidies."
This approach is what helped Rivalry drive the aforementioned 50% reduction year-over-year in bonus/promotional spend relative to the company’s revenue. “Gaming and internet culture guides this successful player acquisition strategy, and allows us to engage with a deeply valuable and nuanced demographic of users that legacy operators aren’t equipped to serve," argues the business.
“There is tremendous value gained by participating in these communities and cultures, building lasting brand affinity among gaming fans who are quickly emerging as the consumer economy of the future, and similarly by attaching ourselves to the pervasiveness and virality of the internet,” the company said.
“We believe an intimate understanding of these audiences and cultures will shape the next generation of great consumer products. It is with this understanding that Rivalry is able to tap into a global gaming audience and drive betting activity among the 532 million esports viewers worldwide,” it concluded.
When it comes to the new year, Rivalry said it will continue making "strategic and measured investments" in key areas of the business that set the stage for further growth, with objectives that should ensure its current momentum toward profitability "remains intact."
The company expects to expand its esports offering; continue its evolution of Casino.exe; launch a mobile app in its regulated markets; expand geographically; expand its content and content creator partner program; and continue to grow its investor base through proactive capital markets outreach.
Steven Salz, Co-Founder and CEO of Rivalry Corp, commented: “I’m extremely proud of the differentiated approach Rivalry has taken from day one and what it has enabled us to achieve, creating a truly distinct product and brand that is driving operating leverage and bearing fruit across the business.”
“As we move into 2023, we’re eager to continue demonstrating the same operational excellence which has enabled us to stand out in a deeply competitive industry,” he concluded.