The PointsBet Holdings Ltd (ASX: PBH) share price will be in focus this morning after the release of the sports betting company’s first quarter update.
How did PointsBet perform in the first quarter?
PointsBet was a very strong performer in the first quarter and recorded exceptional growth across all major metrics.
For the three months ended 30 September, the company reported turnover of $691.9 million, up 193% from the prior corresponding period.
The majority of PointsBet’s turnover continues to be generated in the Australian market. The Australian business reported a 221% increase in turnover to $527.7 million, which was supported by a 130% increase in US turnover to $164.2 million.
Growing at an even quicker rate was the company’s gross win metric, which lifted 282% to $70.4 million for the quarter. This comprises Australian gross win of $60.5 million and US gross win of $9.8 million. The net win metric also grew strongly, up 222% on the prior corresponding period to $38.1 million.
At the end of September, PointsBet had a total of 164,500 active clients, up 88% since this time last year. This comprises 124,700 Australian clients and 39,800 US clients. The latter was up 159% on the prior corresponding period.
Net cash used in operating activities was $10 million. Though, excluding movement in player cash accounts, net cash used in operating activities was $21.6 million. Management notes that its operating net cash outflows were driven by cost of sales ($19 million), non-capitalised staff costs ($6.4 million), marketing costs ($28.6 million) and administration and corporate costs ($5.8 million).
Despite these outflows, PointsBet finished the period with a hefty $436.5 million of corporate cash. A significant amount of this is held in US dollars.
Outlook.
While no firm guidance was given for the remainder of the financial year, management appears positive on its outlook.
It commented: “The Company recognises a structural change in the Australian online wagering market, including brand consolidation (BetEasy, previously the third largest brand in the Australian market merging with SportsBet during the quarter) and a shift from retail (venue) to online wagering. As a result, the Company is pursuing a strategy to increase Net Win growth and market share.”
Whereas in the United States, it notes that its NBC Sports deal aligns the company with a 2025 US$12 billion opportunity.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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