In the third quarter of the fiscal year 2024 BetMakers, listed on the Australian Securities Exchange (ASX:BET), experienced a significant market shift. The companys shares fell by approximately 11 percent, a change primarily driven by a 4.1 percent year-on-year decrease in revenue. The revenue for this quarter, ending on 31st March 2024, amounted to A$22.3 million (13.7 million), a drop from A$23.3 million in Q3 FY23.
BetMakers attributed this decline to the soft conditions in the Australian wagering market, which accounts for about 25% of its income. The quarter was particularly challenging for Australian operators due to the competitive landscape, regulatory changes, and tax-related issues in Australia.
BetMakers revenue model is intricately tied to its customers performance, given its revenue share agreements with approximately 30 different wagering platforms. The companys underlying EBITDA for the quarter was a loss of A$2.5 million, an improvement from the A$4.1 million loss in Q3 FY23. Despite the loss, the company registered positive net operating cash flows of A$1 million.
The improvement in EBITDA was a result of ongoing reductions in operating costs, which decreased by 8.2 percent quarter-over-quarter. BetMakers intends to implement further cost reductions in the current quarter. The first nine months of FY24 saw a revenue of A$73.7 million, marking a 5.3 percent increase from the same period in the previous year.
The third quarter was a period of significant change for BetMakers. The company signed new agreements with PA Betting Services, Kambi Group, and Gaming Innovation Group (GIG).
Acquisition of Racelab Global
Post the quarter, BetMakers announced a binding agreement to acquire the assets of Racelab Global, an international supplier of racing wagering products and technologies. This acquisition, costing a total of A$1.5 million, added leading race form, preview, and statistics technology to BetMakers ecosystem, along with proprietary fixed odds pricing technology.
BetMakers is also set to receive early termination fees from Australian operator Betr, which will no longer require the suppliers services after being acquired by another brand, BlueBet. BetMakers received an initial A$3.75 million from Betr in March, with further payments of A$2.25 million due by June and an additional amount between A$1.5 million and A$2 million to be paid by September.
BetMakers executive chair, Matt Davey, emphasized the companys strategy of enhanced operating discipline, focusing on higher margin, capital light revenue growth, and profitability. He expressed confidence in the companys progress and the pipeline of new growth opportunities. CEO Jake Henson echoed these sentiments, highlighting the benefits of their transformation program and the potential opportunities that position BetMakers for an exciting future.
