Rivalry (RVLY) Q2 2024 earnings summary

Executive summary

• Net revenue reached CAD 4.7 million in Q2 2024, up 22% year-over-year and 3% sequentially, with a record net revenue margin of 62.5% driven by margin enhancement initiatives.

• Strategic focus shifted to margin improvement, VIP player acquisition, and expansion into the crypto segment with Rivalry Token, supported by operational cost controls and workforce rationalization.

• Rivalry Token generated CAD 1.7 million in revenue post-Q2, attracting high-value and engaged users, and is expected to continue as a revenue stream into Q3 and Q4.

• Operating expenses decreased by 5% year-over-year, with further cost rationalization underway to support the path to profitability.

• Betting handle was CAD 87.8 million, down from CAD 112.2 million in Q2 2023, reflecting a focus on higher margins over volume.

Financial highlights

• Net revenue for Q2 2024 was CAD 4.7 million, up 22% year-over-year.

• Gross gaming revenue declined 12% year-over-year to CAD 7.4 million.

• Net revenue margin reached a record 62.5%, up from 45%-46% in 2023.

• Operating loss narrowed to CAD 4.8 million, the lowest in five quarters.

• Net loss improved to CAD 5.8 million, a CAD 0.9 million improvement year-over-year.

• Ended Q2 with CAD 4.6 million in cash, including $1.2 million in cash and equivalents and $3.3 million in restricted cash.

Outlook and guidance

• Profitability guidance for H2 2024 is maintained, with expectations for continued revenue from Rivalry Token into Q3 and Q4.

• Further cost reductions and margin improvements anticipated in the second half of 2024.

• Plans to license first-party casino games, establishing a new B2B revenue stream in the coming months.

• VIP player initiatives and ongoing development of social-based crypto products expected to drive growth, especially in Q4.

• Timing of full Rivalry Token launch and exchange listings may impact revenue ramp.