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PointsBet (ASX:PBH) share price jumps on strong Q3 update

The PointsBet Holdings Ltd (ASX:PBH) share price is jumping higher today after the release of a strong third quarter update…
The post PointsBet (ASX:PBH) share price jumps on strong Q3 update appeared first on The Motley Fool Australia. –

excitement surrounding asx share price rise represented by man holding slip of paper and making happy, fist up gesture

The PointsBet Holdings Ltd (ASX: PBH) share price is on course to end the week on a very positive note.

At the time of writing, the sports betting company’s shares are up 6% to $13.40.

Why is the PointsBet share price surging higher?

The catalyst for the rise in the PointsBet share price today has been the release of its third quarter update this morning. That update reveals that the company has continued to grow all key metrics at a rapid rate.

For the three months ended 31 March, PointsBet reported a 236% increase in turnover to $905.2 million. This was driven by a 137% jump in Australian turnover to $423.2 million and a 431% increase in US turnover to $482 million.

Also growing strongly was its net win metric. The company recorded a 246% increase in net win to $64.9 million for the quarter. This was the result of a 147% increase in Australian net win to $38.2 million and a 716% jump in US net win to $26.7 million.

At the end of the period, Pointsbet had 285,500 active clients. This is 169% higher than the prior corresponding period and comprises 158,000 Australian clients and 127,500 US clients. The latter is up 461% since this time last year.

Management commentary

Management was pleased with the performance of its Australian operations during the third quarter.

It explained: “Compared to the PCP [prior corresponding period], the Australian Trading business has seen improvement across a number of key KPIs as client behaviour shifts to the higher margin multi segment. Improvements in marketing tech tools also assisted with acquisition and retention compared to the PCP.”

“The performance of the Australia Trading Business remains an excellent blueprint for PointsBet’s aspirations in the United States. PointsBet’s ability to operate a growing, profitable business in the advanced and competitive Australian market, backed by continually improving product and growing brand recognition, provides confidence in the continued execution of its US strategy.”

Speaking of which, management appeared to be pleased with its progress in the US.

It said: “The US business achieved a quarterly Gross Win of $45.8 million, compared to Gross Win of $5.6 million in the PCP, with a Net Win of $26.7 million, compared to Net Win of $3.3 million for the PCP. This quarterly result was assisted by a reversal of the short-term negative variances experienced during the December quarter predominantly in New Jersey. As a result, the US business also achieved a record quarterly Gross Win Margin of 9.5% and a record quarterly Net Win Margin of 5.5%.”

“During the period, the Company had a successful Super Bowl LV, recording 4 times the handle and 12 times the number of first time bettors as compared to the previous year’s Super Bowl. Importantly, unlike some of the Company’s competitors who rely on third party platform providers, PointsBet suffered no technical issues or delays during this high-volume betting event.”

No guidance has been given for the fourth quarter or full year.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post PointsBet (ASX:PBH) share price jumps on strong Q3 update appeared first on The Motley Fool Australia.

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