PointsBet share price shoots 13% higher on strong Q3 growth

Businessman outside jumps in the air

Businessman outside jumps in the air

The PointsBet Holdings Ltd (ASX: PBH) share price is on course to end the week on a very positive note.

At the time of writing, the sports betting company’s shares are up 13% to $3.09 following the release of its quarterly update.

PointsBet share price higher after reporting strong growth

  • Turnover up 54% to $1,398 million
  • Gross win margin down 2.2 percentage points to 8.9%
  • Gross win up 24% to $124.9 million
  • Net win margin down 2.1 percentage points to 5.1%
  • Net win (including iGaming) up 18% to $76.9 million
  • Cash balance of $425 million

What happened during the quarter?

For the three months ended 31 March, PointsBet reported a 54% increase in turnover to $1,398 million. This was driven by a 37% increase in Australian turnover to $579.4 million and a 70% jump in US turnover to $818.6 million.

Things weren’t quite as positive for its gross and net win, which softened year on year due to its US business. Nevertheless, this couldn’t stop PointsBet from reporting a 24% increase in gross win to $124.9 million.

Whereas PointsBet’s third quarter net win increased 10% to $71.4 million, reflecting a 37% jump in Australian net win to $52.3 million and a 29% decline in US net win to $19.1 million. If you include the company’s iGaming operations, its net win rose 18% year on year to $76.9 million.

This ultimately led to cash receipts of $78 million. However, due partly to its $53.7 million spend on advertising and marketing, the company reported an operating cash outflow of $58.5 million for the period.

Nevertheless, PointsBet finished the period with a healthy cash balance of $425 million.

Outlook

No real guidance was provided for the remainder of the year. However, management advised that it continues to expect the Australian business to be EBITDA positive for FY 2022.

Whereas in North America, PointsBet USA’s CEO, Johnny Aitken, highlighted that the company had won another award and spoke positively about the opportunity in the key market.

He said: “Being recognized for the second consecutive year as the top sports betting operator at the EGR North America Awards is a tremendous honour the PointsBet team does not take lightly. We extend our sincere thanks to the judges, sponsors, industry colleagues, and entire EGR team for the recognition and validation of our hard work in the past year, which featured PointsBet extending its operations further across North America to jurisdictions like New York, Pennsylvania, and Ontario. Looking at the opportunity ahead, we are excited to continue proving our vision and ability to execute.”

The post PointsBet share price shoots 13% higher on strong Q3 growth appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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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