PointsBet confirms talks to potentially sell North American business, sees revenue up 39% in Q1

Australian sports betting operator PointsBet has confirmed that the business is “currently in discussion with multiple parties” regarding the sale of its North American business. The remarks came as the firm posted its financial results for the first quarter of the year, with a revenue rise of 39% to AUD 106.6 million ($70.2 million).

Additionally, the company also announced it has terminated previously reported talks to sell its Australian business to Betr, a News Corp-backed gaming brand. However, the firm said it remains in discussion with “other third parties” that have expressed interest in purchasing the business.

“Consistent with commentary previously provided to our investors and the market more generally, PointsBet continues to engage in discussions regarding strategic transactions that offer the potential to add value for our shareholders,” said the company.

“We’ve got businesses in North America and businesses in Australia today that are doing well,” said the company’s managing director, Sam Swanell, as reported by Australian Financial Review. “We think they are very valuable businesses in their respective markets. Our job is to maximize shareholder value and if we think that some of those strategic discussions can lead to accretive shareholder value, then that’s what we’re going to look at.”

Q1 results

For the three-month period ending March 31, the Australian bookmaker delivered gross gaming revenue of AUD 106.6 million ($70.2 million), up 39% from the $76.9 million posted in Q1 of the previous year; and a total net win of AUD 78.8 million, up 13% on Q1 2022. However, the business’ Australian arm actually saw a slight revenue decline on a yearly basis, down by 3% to $50.7 million.

It was the expansion of the company’s United States operations that drove growth during the quarter, as revenue rose 103% year-on-year to $49.8 million. PointsBets’ Canadian business also had a solid quarter, growing 21% on a quarterly basis to $6.1 million.

However, the revenue growth in North America might not be enough: the company forecasts an EBITDA loss of between $77 million and $82 million for H2. Economic pressures have led the company to seek ways in which to cut costs, further driving the business toward profitability.

“We recently completed a cost and efficiency review of our North American operational workforce,” the company noted. “This resulted in the streamlining of operations and resulted in a 12% reduction in headcount. This reduction is expected to result in annualized cost savings of approximately $6 million.”

During Q1, the Australian bookmaker cut its cost of sales by 10.5% to $55.5 million, meaning that despite modest rises in costs in its other spending streams, including sales, marketing and staff, costs ultimately fell across the board.

Elsewhere in its report, the company said the volume of wagering for Q1 was down 30% to AUD 1.3 billion ($857.6 million) compared with the same period last year.

See PointsBet’s full Q1 report here.