PointsBet Q3 revenue more than doubles due to US, Aus growth

28 April 2020

PointsBet posted a 139.7% increase in net win revenue to AUD$18.7m (£9.7m/€11.2m/US$12.2m) in the third quarter of its fiscal year on the back of Australian and US growth, but costs continued to outpace revenue as the operator fell to a $15.5m loss for the year.

The business’s net win of $18.7m for the quarter ending 31 March came on a gross win - which is revenue before accounting for bonus costs - of $26.8m, up 21.2% and turnover of $268.7m, up 97.3%.

The majority of Pointsbet’s turnover came from Australia, where players bet $178.4m, up 58.3%. US turnover, meanwhile, almost quadrupled to $90.7m. Of this $90.7m, $85.0m came from New Jersey, with a further $5.4m from Iowa and the remainder from Indiana.

PointsBet noted that this increase in betting in the US came despite the fact that almost all sports in the country, including the NCAA basketball tournament, were suspended for the latter half of March.

Australia dominated in terms of PointsBet’s gross win, with $21.2m coming from the country, up 63.6%. The US brought in $5.6m, more than five times the net win for the same quarter in 2019, of which $5.5m came from New Jersey.

Similarly, $15.5m of PointsBet’s net win came from Australia, up 89.8% compared to just $3.3m from the US, which posted a loss in net win in Q3 of the previous fiscal year.

In Australia, the business set monthly records for net win in both February and March, helping the business to quarter-on-quarter growth, despite the impact of the novel coronavirus (Covid-19) and the fact that the second quarter of PointsBet’s fiscal year includes the Melbourne Cup.

The number of active PointsBet users increased 63.1% to 106,046.

However, the business paid $7.6m in costs of sales, plus a further $7.0m in marketing expenses. In addition, PointsBet’s staff costs came to $8.4m, while administration and corporate costs came to $3.9m.

The operator noted that its Australian business posted positive EBITDA for the first time ever.

The business received $455,000 through interest income, but incurred $154,000 in interest costs, for a $301,000 net interest gain. In addition, PointsBet saw a $2.6m net decrease in player cash accounts.

This resulted in a net loss from operating activities of $10.5m, this was down from a $14.3m operating loss in Q2 of its 2020 fiscal year.

The business paid a further $4.8m in capital expenditure. Of this total, $3.0m came in market access and retail sportsbook fitout costs. Costs to acquire intellectual property came to $1.3, while costs to acquire property, plants and equipment came to $470,000.

Pointsbet paid a further $270,000 in repayment of its lease liability. This resulted in an overall negative cash flow of $15.5m.

The business said it is seeking to mitigate the effects of the novel coronavirus on the business, with the cancellation of almost all global sport likely to have a major impact on its bottom line.

PointsBet said it was working on a new igaming vertical and has made major cuts to its marketing expenses. The business added that it furloughed 20 staff in the US this month.