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Toronto-based betting company Rivalry announced its quarterly earnings, highlighting that Q3 2022 was the company’s best quarter ever. In Q3, the company’s revenue reached $5.2 million, up 93% from Q3 2021. Similarly, gross profits jumped to a record high of $1.5 million in the quarter, up 263% from this period last year.

In its announcement, Rivalry showed that esports played a major role in the company’s success. Ninety percent of the company’s sportsbook handle was a result of esports betting, though its unclear how much esports contributed to the sportsbook’s $4.5 million in gross revenue. Largely, this focus on younger esports fans has paid dividends for Rivalry. According to a spokesperson, the average customer age is 25.

“Our leading brand position among Millennial and Gen Z consumers was a catalyst in generating meaningful revenue from esports betting during a period of several tentpole international events, and ultimately driving record results in the third quarter,” said Steven Salz, cofounder and CEO of Rivalry. “Our differentiated strategy and product offering is key in connecting with a demographic that legacy operators aren’t equipped to serve.”

However, the company is still posting net operating losses through Q3 2022. Last quarter alone, the company lost $4.1 million, up 32% from Q3 2021. For 2022 so far, these losses are just shy of $14 million. That’s more than double the losses in the first nine months of 2021.

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Meanwhile, operating expenses increased dramatically in 2022. Year-to-date, Rivalry has spent $17.4 million on operating costs. This is 2.2 times the amount it spent in the first nine months of 2021. The main contributors to these losses were marketing expenses and greater administrative costs. In the first nine months of 2022, these expenses grew 2.7 times and 2.8 times respectively compared to the same period in 2021.

This being said, this spending seems to be paying off. Rivalry’s trajectory is positive. Alongside their Q3 earnings, Rivalry released preliminary results for October that show major growth. In October alone, Rivalry recorded gross profits of $1.5 million — about equal to the company’s gross take in Q3 2022. More importantly, October is the first month where Rivalry recorded a net profit — a major milestone for the company.

Rivalry trades on the Toronto stock exchange under the stock symbol RVLY.

*Update: An earlier version of this report incorrectly indicated the sportsbook’s handle was $4.5 million, not gross revenue. We regret the error.

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