The PointsBet Holdings Ltd (ASX: PBH) share price is having a volatile day following the release of its fourth quarter update.
After being up as much as 4.5% to $6.54, the sports betting company's shares are currently down 3.5% to $6.06.
How did PointsBet perform in the fourth quarter?
During the fourth quarter of FY 2020, PointsBet delivered turnover of $349.4 million. This was an increase of 57.9% on the prior corresponding period.
This growth was due entirely to its Australia business (+80.5% to $302.9 million), which offset a disappointing 12.9% decline in US turnover to $46.5 million.
A key driver of this growth was a 39.2% increase in active customers over the prior corresponding period to 111,361. The majority of this customer growth came in the first half of the financial year. Management advised that the suspension of key global sports during the pandemic weighed on customer acquisition and activity during the second half.
One positive, though, was that thanks to a 6.3 percent point increase in its net win margin, PointsBet recorded a 355.7% jump in its net win to $33.5 million during the quarter. This includes a record quarterly net win for the Australian business of $32.4 million.
The latter helped the Australian business deliver its second consecutive quarter of positive EBITDA.
Full year update.
In light of the above, PointsBet recorded turnover of $1,151.6 million during FY 2020. This was more than double what it achieved a year earlier. This turnover comprised Australian turnover of $830.5 million and US turnover of $321.1 million.
The company finished the period with a net win margin of 7.1%, which led to a net win of $82.1 million for the year. This was a 190.9% increase on FY 2019's net win.
At the end of the year, PointsBet had $135.4 million of corporate cash and no borrowings. The majority of its cash is held in US dollars.
No guidance was provided for FY 2021 at this stage. However, management notes that the big four US sports are all re-launching concurrently in the first quarter of FY 2021. This is a historical first and has led to the company executing a brand-led marketing strategy in Indiana and Illinois to grow its market share.
