BetMakers share price pops then drops as full-year revenue leaps 370%

BetMakers posted a 371% increase in revenue and an $89 million loss for FY22 … and investors are buying and selling accordingly.

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Key points

  • The BetMakers share price is having some ups and downs this morning
  • The share price moves come on the back of the company's full year earnings 
  • BetMakers posted $91.7 million of revenue for FY22 and a $66.3 million gross profit

The BetMakers Technology Group Ltd (ASX: BET) share price is on a rollercoaster this morning after the company released its earnings for the 2022 financial year (FY22).

The business-to-business (B2B) betting technology provider's stock opened 1.2% higher a 41 cents before leaping to a high of 44 cents – marking an 8.6% gain.

The BetMakers share price has since plummeted 4.9% to trade in the red at 38.5 cents.

BetMakers share price soars despite losses deepening

Here are the key takeaways from the company's full-year earnings:

  • Revenue came to $91.7 million – a 371.1% increase on that of the prior corresponding period (pcp)
  • Posted an after-tax loss of $89.2 million – 411.1% deeper than the pcp's $17.4 million loss.
  • Gross profit lifted 550% to $66.3 million
  • Earnings before interest, tax, depreciation, and amortisation (EBITDA) came to a $86 million loss – 374% deeper than the pcp's $18.1 million loss
  • Adjusted EBITDA, however, reached $2.2 million – up from a $2.9 million loss

The company's three divisions each posted higher revenue in FY22.

Its global betting services brought in $40.6 million of revenue, up 179% year-on-year, while its global tote division saw $46.9 million of revenue, a whopping 2,719% improvement.

Finally, its global racing network business boasted $4.1 million of revenue – a 28% increase.

What else happened in FY22?

The biggest boost to the BetMakers share price last financial year came in April when the company announced its set to supply a new venture with wagering technology. The deal could bring in $300 million of revenue over its ten-year life.

Betmakers also revealed an on-market share buy-back in June and secured an agreement to provide tote technology services in Norway.

What did management say?

In a letter to shareholders released alongside BetMakers' earnings, CEO Todd Buckingham said:

BetMakers achieved key milestones [in FY22] as it focussed on maximising revenue growth and executing on transformative deals in line with Australian and international strategic plans.

The performance across its three divisions … showed strong overall growth and re-enforced the position of BetMakers as a leading B2B wagering technology company within the global landscape.

The further development of proprietary technologies to service the global racing industry … has been supported by a targeted recruitment of key personnel for management and the board.

In establishing this world-class team across a wide international footprint, and together with the deals signed in FY22, I am especially pleased with the position it now places BetMakers to accelerate growth opportunities in each of its revenue divisions in FY23 and beyond.

What's next?

The company didn't provide any new earnings guidance today. However, Buckingham said it expected benefits of several recent deals would begin to flow in this financial year and beyond.

Its global betting services business is set to launch several wagering platforms in the coming 12 months. It's expecting strong FY23 revenues.

BetMakers' global tote business is expected to consolidate its gains in FY23 while setting the platform for FY24 and beyond.

Finally, the company expects its global racing network's revenue to more than double in FY23 as it executes on opportunities.

BetMakers share price snapshot

The BetMakers share price has struggled through 2022 so far.

It has tumbled 51% year to date and 64% over the last 12 months.

For comparison, the All Ordinaries Index (ASX: XAO) has dumped 8% since the start of 2022. It's also fallen 6% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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