PointsBet sold its US operations to Fanatics for $225 million, with a net profit of $267.1 million for the full year of 2024, and a cash reserve of $28.1 million.
PointsBet CEO Sam Swanell told analysts in the unaudited 2024 performance report that the sale of the US business provided the group with a substantial cash reserve of $28.1 million, which could be "invested in further growth".
Swanell emphasized that the cash flow in the fourth quarter set a record of $7.1 million. He stated that the company is "well-capitalized to invest in further growth and execute ongoing operational and strategic plans".
"We continue to invest to achieve further growth, particularly through our strategic marketing investments, investing in our core technology and product capabilities. This has driven our market share growth in Australia and Canada, and laid the foundation for further success for the company," he said.
PointsBet received the last payment of $50 million from Fanatics in the fourth quarter.
The company's gross margin for this fiscal year was 50%, with an EBITDA loss lower than expected at $1.8 million, 55% below the initially forecast range of $4 million to $6 million.
Canada Drives Group Betting Development
The group's core sports betting business net win increased by 13.6% to $248.3 million. In FY24, the profit margin of this vertical also rose from 7.7% to 8.5%.
The betting industry's quarterly growth was also strong, with net wins increasing by 12% from April to June 2024.
The growth in the Canadian market was significant, with annual market betting volume increasing by 124% to $15.2 million, and turnover also growing by 31% to $255 million. Swanell told analysts that the company's market share was growing in both Canada and Australia.
As for Canada's igaming, PointsBet's net profit was $18.8 million, up 63.5% from the previous year. Currently, igaming operates only through its Canadian product, while sports betting spans Australia and Canada.
Swanell stated that PointsBet's business growth rate would exceed the overall Canadian market in 2024. "But Canada is still an early market with stronger growth potential," he said.
Australia remains the company's core market, with sports betting net winnings of $233.1 million, up 10.1%. Betting turnover grew by 1.7%, reaching $2.68 billion, with the net win rate rising from 8% to 8.7%.
Swanell noted that the number of cash active betting customers increased by 4% in the fourth quarter, driven by its internal betting products and a strong focus on retention and reactivation.
Reducing Advertising to Minimize Harm
As the company cut back on TV and in-stadium advertising spending to reduce the exposure risk of its gambling brand in advertisements, marketing expenditures decreased by 21%.
The company no longer airs ads on free TV between 6 PM and 9:30 PM and has removed its brand from stadiums and sports teams' jerseys, meaning its sponsorship agreements with the Manly Sea Eagles and Cronulla Sharks will be canceled starting from 2025.
