FansUnite points to cost-cutting measures amid 11% decrease in Q1 revenue
The Vancouver-based firm also posted a decrease in net loss and increase in gross margin
FansUnite has published its financial results for the first quarter of 2023, reporting a 11% year-on-year decline in revenue.
The Vancouver-based betting and gaming firm recorded total revenue of $8.73m for the three months ended Mar. 31, down from $9.66m in Q1 2022.
However, FansUnite also highlighted some more positive aspects, with its gross margin of $5.41m (62%) up from $5.9m (61%) over the same period last year, and its net loss of $6.15m – which includes non-cash expenses of $6.39m – down from $9.17m in Q1 2022 (inc. non-cash expenses of $10.31m).
“The work we began in 2022 to reduce costs and streamline operations are being reflected in our results,” explained Scott Burton, CEO of FansUnite. “The first quarter of 2023 saw an increase in gross margin to 62%, a decrease in net loss to $6.4m as compared to $9.2m in Q1 of the prior year while we generated positive cash flow from our operations.
“Additionally, we reached multiple strategic milestones, including the sale of one of our affiliate brands, BetPrep, to achieve cost-savings and reallocate our resources to other high-revenue segments as well as the Company obtaining a prominent strategic investor, Tekkorp Capital, in our recent financing.”
The aforementioned $3.04m Tekkorp investment was officially completed mid-March, issuing an aggregate of 37.97m units at an issue price of $0.08 per unit.
After closing the transaction, Burton revealed the additional capital would be used to invest in areas where “impactful revenue growth” had been witnessed, which he elaborated on in the company’s latest quarterly report.
He said: “We are going to continue our focus on growing our high margin and profitable US affiliate-centric businesses, primarily Betting Hero and its new divisions. The affiliate side of our business has continued to produce substantial revenues while having a strong foothold in the affiliate business.
“The focus moving forward will be to execute on new revenue opportunities while driving improved margins and positioning FansUnite as a business that generates significant cash flow in the global gaming market.”
Meanwhile, subsequent to the first quarter of the year, FansUnite sold its Scotland-focused sportsbook and online casino McBookie for $5m, which represented a significant return on the $2.2m it paid for it in March 2020.
FansUnite also gained further funds from the sale of its Chameleon igaming platform, which was acquired by Betr for $7.45m.
Once again, Burton cited the revenue opportunities provided by Betting Hero as a crucial factor in its decision to complete the “transformational transaction”.