Toronto-based Rivalry reported a 51% quarter-over-quarter increase in net revenue in the first quarter of 2024 and smaller upticks in betting handle and gross gaming revenue but is still lagging behind where it stood this time last year.

The jump in net revenue to $4.5 million means that as a percentage of GGR, Rivalry’s Q1 2024 net revenue margin of 58.5% was the highest in company history. It is 13% higher than the margin for FY 2023.

For the three-month period ended March 31, 2024, Rivalry’s betting handle climbed 11% from Q4 2023 to reach $94.7 million and its GGR rose by 20% in the same period to hit $7.7 million.

The company attributed the quarterly improvements to “ongoing initiatives to increase margins through innovation and adjustments to the product offering.”

Co-founder and CEO Steven Salz said on an earnings call on May 30 that the all-time record net revenue margin proves the company’s innovation strategy is “delivering results.” Salz also noted that a contributing factor was the company scaling back on promos as “we found different ways to reactivate, whether through marketing efforts or otherwise that are below the line.”

However, while Rivalry reported progress quarter-over-quarter, the company’s financials are still down.

When comparing Q1 2024 and Q1 2023, betting handle, GGR and net revenue all fell by double digits. Handle dropped 21.2%, GGR sunk 35.8% and net revenue declined 16.7%.

Salz stressed that through the company’s continued innovation, it expects moderate growth for the remainder of 2024.

Rivalry CFO Kejda Qorri told investors that the company’s handle in Q1 2024 came mostly from casino gaming (59%), with sportsbook handle at 41%.

Salz teased that an increased interest in the company’s original casino content will unlock B2B revenue opportunities “that we are keen to detail more fully in the near future.” Rivalry has stated it will continue to explore interest in licensing its first-party casino games.

However, Qorri noted that sports betting made up nearly 80% of the Q1 GGR, in line with the average split in 2023. “Based on their respective contributions to GGR, the sportsbook segment has been a greater focus in our efforts to improve margins,” said Qorri. “Gaming typically generates lower but more predictable margins.”

The company released several new sports betting features in the quarter as part of this bid to include margins, including a basketball same-game-parlay product coinciding with the 2024 NBA playoffs, pre-made parlays and shareable bet slips.

The company also announced its new Rivalry Token, a native cryptocurrency token that is set to launch in the second half of FY 2024.

Salz told investors says the token is a continuation of its goal of capturing and engaging its target demographic of under-30s “who were born on the internet.” Customers can earn tokens by wagering and referring their friends. The token will be integrated across its sportsbook and casino verticals and the company said it will drive an increase in player engagement, loyalty, and advocacy.

However, the crypto token will not be available in Ontario. The province’s iGaming standards specifically state that “cryptocurrency is not legal tender and shall not be accepted.”

Salz clarified that the token is not used as betting currency per se, instead serving as a loyalty reward for its customers, but they have chosen not to launch it in the province.