Rivalry (RVLY) Q3 2024 earnings summary

Executive summary

• Q3 2024 featured a complete product, brand, and marketing overhaul, major organizational realignment, and a shift to a global crypto-first strategy targeting high-value, digital-first users.

• Headcount and operating expenses were reduced by approximately 50% through two workforce rationalizations, with leadership taking voluntary salary reductions.

• The company launched a revamped registration flow, sportsbook, crypto-first cashier, redesigned casino, and a comprehensive VIP rewards program, rebuilding nearly the entire product in 90 days.

• The native crypto token, NUTZ, was launched and integrated with the VIP strategy, generating $3.0 million in deferred revenue in Q3, with full launch anticipated in early 2025.

• Net revenue per user reached all-time highs, up 51% versus 2024 YTD average and 70% over the trailing three-year average since new product features launched.

Financial highlights

• Q3 2024 betting handle was $79.9 million, a 9% sequential decrease from Q2 2024, primarily due to reduced marketing spend.

• Adjusted revenue, including $3.0 million in deferred NUTZ revenue, was $6.0 million; net revenue was $3.0 million.

• Nine-month net revenue was $12.1 million, down 8% year-over-year, mainly from lower marketing and a higher mix of lower-margin casino handle.

• Marketing spend was $2.0 million, down 30% year-over-year.

• Ended Q3 with $2.1 million in cash; subsequent private placement raised an additional $3.0 million.

Outlook and guidance

• Near-term profitability remains a top priority, but precise guidance is withheld until further stabilization; management expects to potentially reestablish profitability guidance early next year.

• Additional NUTZ token sales are anticipated in Q4 2024 and Q1 2025, with full launch expected in early 2025.

• Current run-rate operating expenses are approximately 50% lower than reported in Q3, supporting a clear path to profitability even with stable revenue.

• Anticipated catalysts include the full launch of NUTZ and continued growth in crypto-native player engagement.