BlueBet, an Australian-based sports wagering operator, released its third quarter fiscal year (FY) 2022 report, posting strong growth across all key financial performance metrics, yet ending the period with net cash outflow and the rate of new customer acquisition is slowing down.
Key Performance Metrics
BlueBet provided its Q3 FY22 Quarterly Activities Report for the three months ended March 31, 2022, in a filing to the Australian Securities Exchange (ASX).
Turnover for the quarter was AU$120.7 million ($85.7 million), up 44.5% from AU$83.5 million ($59.3 million) the business reported in the respective quarter of FY21. Measured on a sequential base, Q3 posted a decrease of 12.9% to AU$138.6 million ($98.4 million) registered by BlueBet in Q2 FY22.
Q3 recorded a net win of AU$13.2 million ($9.4 million), a 55.1% increase from AU$8.5 million ($6 million) in the previous comparable period. On a sequential basis, net win decreased by 4.3% from AU$13.8 million ($9.8 million) for the second quarter of FY22. The Q3 FY22 net win decrease confirms a negative trend for the business after the Q2 FY22 decrease of 6.7% as compared to Q1 FY22.
Net win margin came out at 10.9% to post an incremental increase of 0.7% to 10.2% registered in Q3 FY21 and a 0.9% increase on 10% for Q2 FY22. The double-digit net win margin was attributed to BlueBet’s disciplined approach to managing promotions.
The number of active customers registered an increase of 84.7% reaching 49,556 in Q3 FY22 as compared to 26,824 in Q3 FY21. On a sequential base, BlueBet’s customers grew during each quarter but the rate of growth is significantly slowing down from the initial 21% in Q4 FY21 to just under 10% in Q3 FY22.
BlueBet ended the third quarter of FY22 with a cash balance of AU$51.6 million ($36.6 million), including customer deposits to the amount of AU$3.8 million ($2.7 million). The sports betting operator has no corporate borrowings.
With a net win from customers of AU$13.2 million, BlueBet recorded AU$1 million ($710,000) in operating expenses, cost of sales of AU$5.2 million ($3.7 million), staff costs of AU$1.6 million ($1.1 million), marketing costs of AU$3.5 million ($2.5 million), AU$1.5 million ($1.1 million) in income tax, and AU$3.2 million ($2.3 million) in administration and corporate costs, to end the quarter with cash outflow of AU$2.8 million ($2 million).
Raising Operating Capital
BlueBet is preparing to raise AU$80 million ($56.8 million) by issuing 70.2 million new shares at an issue price of AU$1.14 per share. According to the Prospectus related to the Offer, the company will be spending the new funding on marketing in Australia, platform technology improvements, and licenses and partnerships in the US as it is pursuing its dual-growth strategy.
Outside of the reported quarter, BlueBet achieved its third US market entry after an agreement with the operator of Louisiana Downs, a casino and horse racing track in Bossier City, Louisiana. Pending regulatory approval and licensing, BlueBet will be able to offer B2C online sports betting for a period of 10 years.
BlueBet also announced its new brand, ClutchBet, which will soon debut in Iowa and by the end of 2022 launch in Colorado and Louisiana.