This was despite the company’s Canadian turnover rising 111.4% to $44.2m. Its Australian turnover, however, fell 7.3% to $566.9m.
This was the first time PointsBet’s US operations did not appear in its quarterly results, after it successfully sold PointsBet US to Fanatics earlier this year. Fanatics first put forward a bid to purchase PointsBet for $150.0m in May. DraftKings joined the race in June, but ultimately pulled out after Fanatics increased its bid to $225.0m.
In September, Fanatics closed on the first eight states in the deal, with New York and Wyoming following in early October. Four states remain.
Net win creeps up
PointsBet’s net win from sports betting continuing operations grew 14.7% to $55.1m. Net win from igaming rocketed 130.7% to $3.0m. This brought the total net win from continuing operations to $58.2m, up by 18.0%.
Sam Swanell, PointsBet’s CEO said PointsBet was on a “path to profitability” in Canada particularly. “In FY25, we want Canada profitable,” he said. “The Canadian business provides shareholders continued exposure to the fast-growing North American market through a jurisdiction that is more attractive than most US states.”
He added that the operator was working on improving its casino offerings, which is crucial to continued success in Ontario.
“[We] are also actively working to significantly enhance our casino product offering in order to improve the overall experience for customers in terms of games offerings, bonusing options, which are both key elements to growing market share in Ontario,” he continued.
For Australia alone, sports betting net win was $52.8m, up by 11.1%. This was $2.3m in Canada, a rise of 440.0%. This was due to the re-regulation of Ontario last year, which saw the province’s legal igaming market open in April. Canada’s igaming net win was $3.0m, bringing its total net win for the quarter to $5.4m.
That business has “a strategically important place in the Australian wagering market”, Swanell added.
“It’s a $5bn online market here in Australia. We’ve got plenty of room to grow into. We think the market as a whole will have some modest growth this year.”
Ongoing Q1 costs
The operator recorded $58.3m in receipts from customers, consisting of $55.1m from sportsbook and $3.0m from igaming. Cost of sales was $22.1m, and sales and marketing costs hit $21.4m.
After factoring in staff costs, administrative and corporate costs as well as other operating cash flows, the net cash outflow from operating activities resulted in a loss of $10.4m. PointsBet said it expects operating cash flows for the remaining three quarters of 2024 in aggregate to be positive.
As of the end of the quarter, PointsBet had $55.5m in statutory corporate cash.
Looking ahead to FY25
PointsBet says it expects FY24 net win to be between 10%-20% higher compared to FY23, and total marketing expense to be 15%-20% lower. Group EBITDA is projected to to positive in FY25.
As it reported in August, PointsBet reiterated that it expects group EBITDA to be at – or close to – breakeven from mid-2024. In addition, the operator projects normalised marketing expenses to be between $60m and $70m in FY24.
For its live markets, PointsBet expects a clear path to group probability in FY25, adding that it expects to capitalise post-sale of PointsBet US.
“We have a great team and I’m confident we will deliver our group strategy for EBITDA to be at or close to breakeven post the close of the Fanatics transaction in March 2024,” Swanell added. “In today’s challenging funding environment, you know how important it is that we don’t anticipate needing additional capital to deliver positive EBITDA in FY25.”
Original article: https://igamingbusiness.com/finance/pointsbet-turnover-falters-in-first-quarter-since-us-sale/
