Rivalry esports betting generates best quarter ever, first net profit

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Toronto-based betting company Rivalry has announced its quarterly results, highlighting that the third quarter of 2022 was the best quarter in company history. In the third quarter, the company's revenue reached $5.2 million, up 93% from the third quarter of 2021. Similarly, gross profit reached an all-time high of $1.5 million in in the quarter, up 263% over the same period last year.

In its announcement, Rivalry showed that esports played a major role in the company's success. Ninety percent of the company's $4.5 million in sports betting was the result of sports betting. In large part, this focus on young esports fans has paid off for Rivalry. According to a spokesperson, the average age of customers is 25.

"Our brand's position among Millennials and Gen Z consumers has been a catalyst for generating significant revenue from esports betting over a period of several landmark international events, and finally delivered record third quarter results,” said Steven Salz, co-founder and CEO of Rivalry. "Our strategy and differentiated product offering are key to connecting us to a demographic that traditional carriers are not equipped to serve."

However, the company is still posting net operating losses through Q3 2022. In the last quarter alone, the company lost $4.1 million, up 32% from Q3 2021. For 2022 so far, those losses are just under $14 million. This is more than double the losses of the first nine months of 2021.

Meanwhile, operating expenses have increased significantly in 2022. Year-to-date, Rivalry has spent $17.4 million on operating costs. This is 2.2 times the amount spent in the first nine months of 2021. The main contributors to these losses are marketing expenses and increased administrative costs. In the first nine months of 2022, these expenses were multiplied by 2.7 and 2.8 respectively compared to the same period in 2021.

That said, the spending seems to be paying off. The trajectory of the rivalry is positive. Along with their third quarter results, Rivalry released preliminary results for October that show significant growth. In October alone, Rivalry recorded gross profits of $1.5 million, roughly equivalent to the company's gross take in Q3 2022. More importantly, October is the first month that Rivalry has recorded a net profit, a major milestone for the company.

The Rivalry trades on the Toronto Stock Exchange under the ticker symbol RVLY.

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