theScore Updates its Financials, Reveals More Losses
Their recently posted financials revealed the company had recorded a 59.3% rise in net loss during the twelve-month period that had ended on August 31.
Sports Betting Expansion Led to an Increase in Losses
According to the company’s governance, the main cause of the increase in expenses was the launch of the new sportsbook product in New Jersey.
Overall revenue for the most recent fiscal period reached C$31.1 million, which represents a solid increase of 12% when compared to the previous year.
At the same time, theScore had seen a rise in sales in both Canada and the United States. Revenue in its home market jumped by 28.4% to $13.1 million, while revenue from other sources – including the US – improved by nearly 3% to $18.1 million.
One of the most important moments for theScore during the recently-ended financial period was the company’s debut in the US sports betting market. The new product, powered by the BetWorks platform was launched in New Jersey.
"Score Media & Gaming Inc. — better known as @theScore — could become the leading Canadian player in this space, according to one analyst."https://t.co/t6fgg0Fyqw via @BNNBloomberg #sportsbetting pic.twitter.com/NBp1S14snE— Score Media and Gaming Inc. (@theScore_IR) November 11, 2019
This move significantly impacted the company’s annual spending, with total costs for the financial year amounting to $40.7 million, which is 20.1% more from the previous twelve-month period. Personnel costs increased by 16.1% to $18.8 million, while the biggest increase was recorded during the fourth quarter as theScore was getting ready for the New Jersey launch.
Facilities, administrative and other costs increased by a staggering 71% to $10.6 million, with content spending rising by around 17% to $2.1 million. The company did, however, cut its costs related to the amortization of intangible assets by 20.6% to $2.7 million. It should be noted that marketing spending remained virtually unchanged at $2.5 million.
More money spent resulted in a net loss increase of 59.3% to $9.4 million for the full year.
More Revenue in Q4
In the final three months of the year, which is the period when the company launched its new sportsbook, theScore saw its revenue jump by 25.5% to $6.4 million.
Net loss in the fourth quarter amounted to $4.8 million, which is almost 55% more than in the corresponding period of the last year, mainly due to higher spending related to the expansion of sports betting. EBITDA fell by 70.8% to a negative $4.1 million.
Commenting on the latest results, founder and CEO at theScore, John Levy, pointed out the highlights of the most recent financial period were the launch of the company’s new sports betting product, as well as the agreement with Penn National Gaming.
Levy said theScore Bet was live and taking bets in New Jersey, capping one of the most significant quarters and fiscal years in the company’s history. He added theScore had not only managed to successfully launch its new sports betting platform in the fast-growing New Jersey market, but it had also secured market access rights for an additional 11 states through a partnership agreement with Penn National Gaming.
He went on to say the continued growth of the company’s media business, combined with its unique and differentiated entry into the sports betting space, would put it in a strong position as it entered fiscal 2020.