BetMakers reduces net loss in financial H1 2023 as revenue grows 7.5%
ASX-listed betting technology supplier BetMakers reported a 7.5% increase in revenue for the first half of its 2023 financial year (six months ended 31 December 2022).
BetMakers generated revenue of A$46.7m during the half, up 7.5% compared to the prior-year period. Gross profit after the cost of sales came to A$30.2m, down 5.7% year-on-year.After accounting for other expenses including employee benefits and professional fees, the adjusted EBITDA loss for the period was A$15.4m, compared to positive adjusted EBITDA of A$2.3m in the prior year.
After accounting for depreciation, amortisation, share based expenses, finance costs and other comprehensive income including a tax benefit of A$6m, total comprehensive loss for the half year was A$17.6m, down from a A$27.2m comprehensive loss in the prior year.
The supplier ended the period with cash and cash equivalents of A$61m, down from A$110.9m at the end of H1 FY22.
BetMakers’ gross profit margin came in at 65%, lower than in the prior-year comparative period (73.6%) as a result of increased costs associated with the development of the firm’s ‘Next Gen’ betting platform, as well as costs associated with a purchase and distribution contract with Penn Entertainment in July.
BetMakers’ business model is divided into three segments: Global Betting Services, Global Tote and Global Racing Network.
The Global Betting Services division provides customers with a variety of racing software, data and anaytical tools, as well as wagering tools such as platforms and managed trading services.
The Global Racing Network helps racing bodies and rights holders to produce and distribute racing content, while the Global Tote division provides tote software and integrations for pari-mutuel betting operations.
Of its total revenue, the firm’s Global Betting Services and Global Tote divisions together brought in the vast majority, generating A$21.7m and A$21.4m, respectively.
Betting services revenue was up 20.6% year-on-year, while Global Tote revenue slipped by 7.8%.
The Global Racing Network generated an additional A$3.7m, up 57.7% year-on-year.By region, Australia and New Zealand was the highest-earning area for BetMakers. The region generated A$21.2m in revenue amid a year-on-year increase of 67.8%.
That was the only geographical region to demonstrate growth during the period, as US revenue came in at A$17.2m, down 14.1%, the UK and Europe generated A$5.1m, down 19.6%, and the Rest of the World brought in A$3.4m, down 26.3%.
During the reporting period, BetMakers provided its technology and wagering services to power the launch of Betr, the Australian operation backed by NewsCorp and Tekkorp Capital, in which BetMakers is also a major shareholder.
In October, BetMakers also announced the acquisition of Punting Form, an affiliate business using proprietary IP and AI to create sectional times and benchmarks for horse racing used to create time-based ratings systems.
BetMakers paid an initial A$3m consideration for the business and must pay potential further earn-outs worth up to A$17m over the next three years, depending on Punting Form’s delivery of operational, revenue and profitability targets.
In January, the business announced a senior management reshuffle, as former CEO Todd Buckingham moved to a new role as chief growth officer.
He is now “laser focused” on executing BetMakers’ strategic growth initiatives internationally, the firm said.In his former role of CEO is Jake Henson, previously COO, who the board considers “a key executive who can capitalise on the global aspirations of the company.”
Former chief product officer Martin Tripp, meanwhile, has stepped into the role of COO.
In addition, Tekkorp Capital founder and chairman Matt Davey was brought back to the BetMakers board as president and executive chairman. Formerly a board member of BetMakers, Davey previously stood down from the role in April 2022.
iGaming NEXT recently published an exclusive Q&A with Davey, exploring his views on NFT regulation, Tekkorp’s targets for returns on capital and the biggest challenges currently facing investors.