The BlueBet Holdings Ltd (ASX: BBT) share price is surging higher on Friday morning.
In early trade, the sports betting company’s shares are up 6% to $2.37.
This means the BlueBet share price is now up more than 100% since its Initial Public Offering (IPO) earlier this month.
Why is the BlueBet share price surging higher again?
Investors have been bidding the BlueBet share price higher today after the release of its fourth quarter update.
According to the release, BlueBet achieved turnover of $96.5 million for the quarter, up 39.8% on the prior corresponding period. For the full year, the company’s turnover increased 83.2% to $344.7 million.
This strong growth was driven partly by a 45.7% increase in active customers over the 12 months to 32,472. This significantly exceeds its prospectus forecast of 27,925.
Also growing strongly in FY 2021 was the company’s Net Win. It increased 20.9% to $10.1 million in the fourth quarter and 92.4% to $35.6 million for the year.
As a result of the above, BlueBet expects to report full year net revenue of $32 million in FY 2021. This is just ahead of its prospectus forecast of $31.4 million.
Operating cashflow was $1.8 million for the quarter and $8.3 million for the year. This left BlueBet with a cash balance of $56.1 million at the end of the financial year. Management notes that this provides it with the fuel to fund growth opportunities.
US expansion gathers pace
Those funds will be used to support its expansion into the massive United States market, which was given a boost this month by an agreement with Dubuque. The skin agreement will allow BlueBet to conduct online sportsbook operations in Iowa as an extension of Dubuque’s existing casino licence.
But it won’t be stopping there. The company has identified up to five priority states in the US – Virginia, Iowa, Colorado, Tennessee and Maryland – for its initial market entry as a wagering provider.
Like rival PointsBet Holdings Ltd (ASX: PBH), BlueBet sees a major growth opportunity in the market as regulations change. Which goes some way to explaining why investors have been bidding the BlueBet share price higher this month.
In respect to its US expansion, BlueBet’s Chief Executive Officer, Bill Richmond, previously told the Motley Fool: “Breaking into the US is a once in a lifetime opportunity. It’s not often you come across an industry where the US is not first in both people and technology but it’s the case with sports betting because it’s been underground until recently.”
“We have the technology and the expertise to take advantage of this greenfield prospect. With tremendous investor support we have raised a very substantial amount of growth capital to attack the emerging US market, which according to some estimates could be orders or magnitude larger than the Aussie market. We feel we are on the cusp of something very big here,” he added.