Release Date: November 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rivalry Corp (RVLCF, Financial) completed a significant product overhaul, including a revamped registration flow, sportsbook, and a new crypto-first cashier, enhancing user experience.
- The company's average net revenue per user increased by 51% compared to the 2024 year-to-date average, indicating improved monetization.
- Rivalry Corp (RVLCF) reduced operating expenses by approximately 50%, creating a leaner and more efficient cost structure.
- The introduction of the native crypto token, NUTZ, has generated $3 million in deferred revenue and is well-received in the crypto community.
- The company successfully closed a $3 million non-brokered private placement, strengthening its balance sheet and supporting growth initiatives.
Negative Points
- Betting handle decreased by 9% sequentially from Q2 2024, partly due to reduced marketing expenses.
- Net revenue for the nine months ended was down 8% from the comparable period in 2023, reflecting challenges in maintaining revenue growth.
- The reduction in marketing spend impacted player acquisition, with some marketing expenses going towards agreement exit costs.
- Rivalry Corp (RVLCF) reported a net loss of $5.8 million, a slight increase from Q3 2023, indicating ongoing financial challenges.
- The company has not provided specific guidance on profitability timelines, creating uncertainty about future financial performance.
Q & A Highlights
Q: With the recent corporate overhaul and rebranding, can you provide an update on Rivalry's cash runway and operating expenses? Is there a possibility of reestablishing profitability guidance next year?
A: Steven Salz, CEO, explained that while they have moved away from providing specific guidance, they are focused on near-term profitability. The company's operating expenses have been reduced by 50%, and even with stable revenue, there is a clear path to profitability. They are confident in their liquidity position and anticipate reestablishing profitability guidance early next year.
Q: Can you update us on the user base, particularly regarding reactivated and new users, and how this impacts revenue?
A: Steven Salz noted a significant uptake in users connecting their wallets to the NUTZ token, which includes high-value players. The average net revenue per user has increased by 51% compared to the 2024 year-to-date average and by 70% compared to the trailing three-year average. This indicates successful engagement with high-value players and a focus on crypto-native audiences.
Q: How has the deferred revenue from the NUTZ token impacted Rivalry's financials?
A: The deferred revenue from the NUTZ token has been positive, with $3 million recorded in Q3. This revenue stream is finding market fit among the target audience and is well-received in the crypto community, contributing to higher revenue profiles and retention rates among crypto wallet-connected users.
Q: What are the key developments in Rivalry's product offerings, and how do they align with the company's strategic priorities?
A: Steven Salz highlighted the launch of a revamped sportsbook with 40 new titles, a redesigned casino offering, and a crypto-first cashier system. These developments are aimed at capturing crypto gambling market share, enhancing VIP customer engagement, and driving profitability. The new product set is expected to accelerate Rivalry's position as a global crypto-native operator.
Q: Can you elaborate on the strategic importance of the NUTZ token and its role in Rivalry's business model?
A: The NUTZ token is central to Rivalry's VIP strategy, offering a more customer-centric experience and fostering loyalty. It addresses the traditional win-lose dynamic in online gambling by creating alignment between players and the house. The token is expected to enhance user engagement and generate additional revenue once fully launched in early 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
