PointsBet Earnings Call Preview: US Details May Be Light After Fanatics Deal

Written By

Updated on


PointsBet is one of the first publicly traded sportsbooks to announce earnings this period, though there may not be much chatter around US operations.

Trading in Australia, PointsBet will hold its fiscal fourth quarter earnings call at 8 pm Eastern on Thursday. Its Australian operations could steal the show, considering most companies that are in the process of being acquired typically play their earnings calls a bit closer to the vest than usual.

Fanatics successfully outbid DraftKings for the PointsBet US business last month. PointsBet shareholders then overwhelmingly approved the $225 million sale at a special meeting in June.

Still, PointsBet will be reporting on a full year of US operations, which should provide some insight into what Fanatics is acquiring.

Will PointsBet hit earnings target?

On its first half call, management announced it was targeting a normalized EBITDA loss of $52 million to $55 million for the second half. That would be down significantly from $100 million in the first half and $79 million in the second half of fiscal 2022.

The company also expects cash outflow to be 30% lower than the first half.

PointsBet also reduced its headcount by laying off 12% of its workforce following a cost and efficiency review, which should save $4 million annually.

PointsBet marketing efficiency up, spending down

The third-quarter report already shows marketing costs falling despite increased active customers.

PointsBet spent 12% less on marketing and 28% less on promotions in the fiscal third quarter compared to the same quarter in fiscal 2022. But 12-month rolling active customers hit 317,071, up 27% from the prior year.

The company reported $22.3 million in US marketing and $5.2 million in Canada during the third quarter. Those marketing costs should be “significantly lower” in the fourth quarter, CFO Andrew Mellor said.

Growth in live betting?

One of the biggest focuses for PointsBet has been improving its live betting product.

The company reported North American in-play betting accounted for 56% of total handle in the first half. That improved to 59% of all fiscal third quarter US handle.

Along with making market access and licensing an easier process, Fanatics likely saw PointsBet’s in-play technology, bolstered by its $43 million Banach acquisition in 2021, as a key part of its bid.