The Pointsbet Holdings Ltd (ASX: PBH) share price is down 3% after the business released its FY21 result.
Pointsbet’s FY21 result
It said that its total turnover increased by 228% to $3.78 billion, with Australian turnover increasing 140% to $1.99 billion and US turnover soaring 458% to $1.79 billion.
The total gross win increased by 201% to $353.1 million. The overall net win grew 154% to $208.5 million. That broke down to the Australian net win increasing 121% to $166.1 million and the US net win jumping 502% to $42.3 million.
Australian active clients rose 117% to 196,585, whilst US active clients soared 661% to 159,321.
However, there was a huge ($167.8 million) increase in total operating expenses to $244.1 million. It was largely due to an increase in marketing costs. Australian marketing costs were $51.4 million, whilst the US market expense was $119.2 million. It’s aiming to establish and grow its market share in the US and drive revenue growth.
The US marketing expense is expected to continue to increase as its footprint expands.
Its underlying EBITDA (EBITDA explained) suffered a loss of $156.1 million, worsening from $37.6 million. The statutory loss after tax was $187.1 million for the year, which was a much heavier loss compared to $39.7 million in FY20.
Net operating cash outflows was $119.1 million, or an outflow of $138.8 million when excluding movements in player cash accounts.
Outlook for Pointsbet and the share price
Pointsbet said that there was a significant Canadian opportunity. There is apparently C$14 billion of annual illegal sports betting spending in Canada. The estimated total addressable market for the Canadian iGaming and sports betting is US$3 billion. Ontario is expected to launch sports betting by January 2022. The business is preparing for this with a targeted launch in FY22.
The ASX betting share said that it has all the pieces in place as it looks to FY22 and beyond. The Australian trading business is well positioned for the upcoming Spring sporting finals and racing carnival.
Pointsbet’s US business is ready for the upcoming NFL season as an official sports betting partner of the NFL.
There is a huge opportunity in the US for Pointsbet. It is doing what it needs to reach a large audience. Time will tell if it’s able to generate lots of profit in the future. It could be an opportunistic time to think about it considering it has fallen around 32% in the last six months.
