The PointsBet Holdings Ltd (ASX: PBH) share price has been a positive performer on Friday.
In morning trade the sports betting company’s shares jumped as much as 6.5% to $16.49.
The PointsBet share price has since dropped back a touch and is now up 2% to $15.81.
Why is the PointsBet share price jumping higher?
Investors have been buying PointsBet shares on Friday following the release of a quarterly update which revealed further strong growth across major metrics.
For the three months ending 31 December, PointsBet recorded turnover of $1,198.2 million. This was up a massive 303% on the prior corresponding period.
Strong turnover growth was achieved across both its Australian and US operations. Australian turnover increased 193.9% to $543.3 million and US turnover jumped 482.4% to $654.9 million. This was driven partly by a 106.6% increase in active clients to 211,100. This comprises 143,000 in Australia and 68,100 in the US.
Also growing strongly was the company’s gross win, which increased 189.2% to $83.4 million. This growth was driven entirely by its Australian operations, with its US business actually going backwards despite its huge turnover growth.
Australian gross win was up 264.4% to $75.5 million, whereas US gross win fell 2.6% to $7.9 million. This means these businesses were operating with vastly different gross win margins of 13.9% and 1.2%, respectively.
Pleasingly, there has been a huge improvement so far in the third quarter. Between 1 January and 24 January, the US business enjoyed a gross win margin of 15% and the Australian business’ gross win margin came in at 12.1%.
Finally, PointsBet’s net win for the second quarter was $44.6 million, up 148.1% from the same period last year. And thanks to the aforementioned improvement in its gross win margins in the third quarter, the company’s net win was $22.9 million between 1 January and 24 January. This means it has achieved half of its second quarter net win in just three and a half weeks.
Balance sheet
At the end of the period, the company’s corporate cash balance stood at $359.1 million with no borrowings.
PointsBet does, however, have a commitment to invest US$393 million into marketing over a five-year period to support its partnership with NBCUniversal.
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More reading
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- Why Megaport, Netwealth, PointsBet, & Zip shares are racing higher
- Here’s why the PointsBet (ASX:PBH) share price will be on watch today
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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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