Release Date: May 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- First quarter revenue reached $217 million, marking a 34% increase year-over-year, demonstrating strong financial growth.
- EBITDA for the quarter was $17 million, a significant improvement from a negative $8.7 million in the previous year, indicating enhanced profitability.
- Both iCasino and online sports betting sectors experienced over 35% growth, showing balanced expansion across product verticals.
- Record growth in monthly active users in North America by 20% year-over-year, highlighting effective user acquisition and retention strategies.
- Expansion into new markets like Delaware has shown promising early performance, with annual GGR run rate nearing $70 million.
Negative Points
- Despite overall growth, operating margins in Pennsylvania and Illinois remain lower due to arrangements with land-based partners, potentially impacting profitability.
- The company faces intense competition in key markets, which could affect market share and growth sustainability.
- Dependence on the performance of newer markets and products for continued revenue growth introduces risks related to market acceptance and regulatory environments.
- Marketing spend is expected to increase in the upcoming quarters, which could impact short-term profitability if not managed effectively.
- Foreign exchange rates and seasonal variations could pose challenges to maintaining consistent revenue growth, as indicated by the cautious revenue guidance for upcoming quarters.
Q & A Highlights
Q: Hey, guys. Thanks for taking my question and great quarter. Just looking at the back half kind of the updated guidance implies some sort of a deceleration, but you do have the easing comps on you get a benefit of a full year of Delaware So can you just talk about what's going on there? And then can you give us an update on how holds are trending in April relative to March in 1Q? Thanks
A: Sure, Jed. I would say we feel like we put really, really solid growth numbers in the guidance here with revenue up something like 17% to 24% in EBITDA, $42 million to $52 million compared to last year month. I'll remind you that where we put our guidance at the beginning of the year, we were above consensus and then from just increased EBITDA and revenue again as since the since the call before.
Q: Good evening, everyone or afternoon, depending on where you are. Thanks for taking my question. I am I know the Joe mention Delaware and Richard, I'm not sure I heard a ton on in your prepared remarks. Apologies if I missed it, but could you just give us a sense for how you're doing there and what your outlook and expectations are?
A: Sure. I think what we what we shared is that we went from last quarter, we thought the run rate is around $60 million. We'd be able to accelerate that to the run rate now being at a near $70 million GGR for the year would say that we're having tremendous success. I think the quality of our casino product and the user experience we offer to our customer service.
Q: Afternoon. Thanks for taking my question and nice results and outlook. Kyle, your balance sheets in a really strong position. It looks like based on end of quarter; your cash balance is the highest. It's been in at least six quarters here. So on given the outlook of EBITDA, the cash balance, how are you thinking about uses of this, whether it's M&A, capital allocation? Can you kind of frame that out?
A: Yes, I'll point out it wasn't that many quarters ago that you guys were asking about, do we have enough cash and now now we're generating plenty. So we're pretty excited and we're happy to be in that position and don't see. I don't see that changing. I think in terms of use of the cash, obviously, we're always looking at the highest return opportunities and where those where those might be in that conversation evolves. And we continue to look at different things. I think the biggest thing that we've got to be ready for and have have dry powder for is new market launches. So that's that first and foremost.
Q: good afternoon, everyone. Thanks for taking my question. On terms of the revenue growth, it looks like in the US, it accelerated in the first quarter. I think was your highest pace of growth in a number of quarters. So I mean, I assume that that's from Delaware, but to what extent are there other factors in there, maybe reduction in promotions or even an acceleration in some of the markets you're in. You could just kind of unpack that and maybe give some detail on how to think about the rest of the year as it relates to US versus versus Lat Am?
A: No, it's a great question, Dan. I think the growth is really very broad-based. Certainly Delaware has been a nice win for us. But to your point in the US, US and Canada at our highest growth rate, even excluding Delaware, to our highest growth rate in many, many quarters, obviously, Latin America is growing wildly That's fantastic. Richard pointed out that in Michigan, New Jersey and Pennsylvania, three of our largest markets, we had our highest growth rate in over two years some highest year-over-year quarterly growth rate.
Q: Hi, This is Stefanos Crist calling in for Bernie. Thanks for taking our questions. I wanted to ask on Mexico continuing to show strong growth. I just wanted to ask on the timing and path to profitability there. Thank you.
A: Yes, I'll start up. We're still having great success in that launch period. We've referenced Colombia in the past. But if you were to update the information that we're about two times that the Columbia launch revenue over that same time period. So you can see we've accelerated at a really nice pace relative to where we were in Colombia. We know how great the story of Colombia has unfolded for us in recent years. And I think in terms of the profitability, we actually have crossed the threshold. We're profitable in the first quarter on a contribution basis from Mexico.
Q: Hey, good afternoon, guys. Want to stay on Mexico, good to hear profitability there. I guess how much of that do you think is attributed to product and the assortment you guys are offering from a user experience standpoint? Also thinking about the largest operator there that has dominant market shares had some legal issues, had some issues with their tech partner. I guess how much of that competitive dynamic is also helping?
A: Hey, Ryan, it's Mexico is a complicated market. It's there's a lot of quality of operators there and some quality experiences. I do think that we've done a really nice job of building the right functions that you need to localize the product in the proper way to optimize our results.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
