PointsBet’s recent financial report highlights a historic achievement as the company records its first-ever quarter of positive operating cash flow.
PointsBet unveiled remarkable financial performance in its Q2 2024 (three months ending 31 December 2023) showcasing substantial achievements, especially in the Australian market.
Although the total sports betting handle dipped by 4.2% year-on-year, reaching $976.4 million, the increased sports betting net win margin of 6.5% (up from 5.9%) led to a robust total betting net win of A$63.5 million, showcasing a notable 6.2% increase.
A Focus On Australia
After selling its US assets to Fanatics last year, PointsBet turned its focus to using its technology to fuel its future in the Australian and Canadian markets.
Australia, PointsBet’s primary market and where it is based, emerged as a cornerstone of success in the company’s recent earnings report contributing 92% (A$901.6 million) of the total sports betting handle and nearly 94% (A$59.5 million) of the total net win. The net win margin in Australia saw a commendable increase from 6.2% to 6.6%, attributed to the company’s focused efforts on more efficient promotional spending. Implementing in-house tokenization, enhanced data science capabilities, and optimizing customer relationship management (CRM) allowed PointsBet to offer personalized promotions, reducing the cost of promotions from 38.2% to 32.5% of gross win and lower quarterly marketing expenses by 33% year-on-year.
CEO Sam Swanell said the company put a lot of attention into cleaning up the customers that he considers to be “bonus chasers.”
“And part of what we’ve cleaned out over the last four months is leaking value to those clients unnecessarily, and that efficiency has been what’s helped grow our net win.”
Despite a reduction in the total number of cash active clients in Australia, the company managed to increase the number of positive net win cash active clients and expects its number of cash active clients to grow in the coming quarters as well.
Room For Improvement In Canada
PointsBet navigated challenges in Canada as its sports betting handle decreased by 7% year-on-year, reaching A$74.8 million which is just 8% of the company’s total handle. However, a significantly improved net win margin of 5.4% (up from 2.6%) propelled the business to deliver a sports betting net win of A$4 million, marking an impressive 94% increase from the prior-year period which earns PointsBet its strongest net win quarter to date in Canada.
The integration of Strive Gaming, aimed at enhancing the iGaming offering, played a crucial role in expanding PointsBet’s library of available games, contributing to a record total quarterly net win of A$10.5 million in Canada, more than double the A$% million recorded in the comparative period.
Unlike in its Australian market though, the number of cash active clients in Canada increased 18%, while PointsBet recorded its highest quarterly number of first-time bettors since the launch of Ontario’s regulated market in April 2022.
2024 Outlook
As the company moves forward, PointsBet remains optimistic about its trajectory. It’s anticipating total net win in FY24 to be 10-20% higher than in FY23, a gross profit margin of around 50%, and a 15-20% reduction in total marketing expenses. Swanell also highlighted the successful transition of ownership in 13 out of 14 US states to Fanatics, with the second capital distribution on track for completion in early-to-mid Q4.
PointsBet is aiming for sustained growth and expects positive EBITDA in FY25.
