Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BetMakers Technology Group Ltd (ASX:BET, Financial) reported a 74% improvement in adjusted EBITDA, reducing the loss to $7.2 million for the full year.
- Operating expenses were reduced by 26%, showcasing improved efficiency in business operations.
- 97% of the company's revenues are contracted, providing a stable and predictable revenue stream.
- The company has diversified its customer base, with no single customer accounting for more than 5% of total revenue.
- Significant international growth, with 66% of revenue now derived from international racing partners.
Negative Points
- The exit of betr has led to a re-basing of revenue to $88.8 million, down from $95.2 million.
- The Australian platforms division underperformed, impacting overall revenue growth.
- Despite improvements, the company still reported a net loss and is not yet profitable.
- The company has faced delays in achieving its financial targets, setting back its progress by approximately six months.
- Gross margin decreased by 2%, primarily due to weaker performance in the Australian platforms business.
Q & A Highlights
Q: How comfortable are you with Betmakers' current cash balance to achieve breakeven?
A: Matthew Davey, President, Executive Chairman of the Board: This has been the number one focus of the Board. We are comfortable we have the assets needed to reach cash flow breakeven and drive profitability. Although we are about six months delayed, we have significant momentum and have already cut $23 million in costs, which will continue.
Q: Can you elaborate on the opportunities in international markets?
A: Jake Henson, Chief Executive Officer: Opportunities lie in emerging markets, particularly in Asia for Global Tote and in Latin America for GBS. We have announced several deals in the Global Tote space and are focusing on digitization growth for GBS, such as our partnership with Sportingtech in Latin America.
Q: How should investors think about FY25 growth given the re-based revenue?
A: Jake Henson, Chief Executive Officer: Our target is to grow double-digit top line as a SaaS B2B business. Despite setbacks, we believe we have the product set to achieve this, leveraging both new customer wins and upselling to existing customers.
Q: What is the current status and future outlook without betr as a client?
A: Jake Henson, Chief Executive Officer: The separation from betr allows us to build our product set in a more traditional B2B fashion, driving higher gross margins and a simplified business model. This flexibility will benefit us in the medium to long term.
Q: Can you provide updates on various customer agreements and partnerships?
A: Jake Henson, Chief Executive Officer: Key updates include Norway's 10-year deal going live in October, Caesars live in over 20 venues in Nevada, Bet365's fixed odds and content deals in Colorado and New Jersey, and Caymanas going live in the digital realm. We are also in advanced discussions with a larger distributor for the AdVantage Platform.
Q: What is the nature of the income tax expense and future cost reductions?
A: Carl Henschke, Chief Financial Officer: The income tax expense is not recurring and is related to a reduction in the deferred tax asset. We continue to see opportunities for cost efficiencies without compromising growth, aiming for a manageable and measured approach.
Q: What is the expected timing and impact of the Next Gen tech upgrades?
A: Jake Henson, Chief Executive Officer: The base of the pyramid services are already deployed. The final platform layer, particularly for the Australian market, is slated for the end of this quarter. This new tech stack will significantly improve our gross margin and operational efficiency.
Q: How do you feel about the broader industry and Betmakers' position within it?
A: Matthew Davey, President, Executive Chairman of the Board: The transition to digital and online wagering is growing rapidly. Betmakers is now focused on running the business profitably, with a diversified customer base and significant investments in technology. We are excited about our international rollout and achieving cash flow breakeven.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
