SharpLink Gaming Announces Third Quarter 2024 Financial Results

Rhea-AI Summary

SharpLink Gaming (Nasdaq: SBET) reported financial results for Q3 2024, showing mixed performance. Revenues decreased 27.7% to $2.8M for the first nine months of 2024, and Q3 revenues declined 34.7% to $881.7K. However, operating expenses decreased significantly, dropping 25.9% for the nine-month period and 46% in Q3. The company reported net income of $11M for the nine months, largely due to a $22.5M cash sale of its SportsHub businesses. Cash position stood at $1.85M as of September 30, 2024, with total stockholders' equity of $2.02M, improved from a deficit of $9.4M at end-2023.

Positive

• Significant reduction in operating expenses by 46% in Q3 2024
• Net income improved to $11M for nine months, up from $9.1M loss prior year
• Elimination of virtually all debt through SportsHub business sale
• Improved stockholders' equity to $2.02M from previous deficit of $9.4M

Negative

• Revenue declined 34.7% in Q3 2024 to $881.7K
• Nine-month revenue decreased 27.7% to $2.8M
• Cash position decreased to $1.85M from $2.49M at end-2023

Insights

Financial Analyst

The Q3 results reveal concerning trends for SharpLink Gaming. Revenue declined significantly by 34.7% year-over-year to $881,690 in Q3, while nine-month revenue dropped 27.7% to $2.8M. Despite reduced operating expenses by 46%, the core business remains unprofitable with a quarterly net loss of $885,131.

The positive net income of $11M for the nine months is misleading as it's primarily due to the $22.5M sale of their fantasy sports division. The remaining cash position of $1.85M provides runway for future operations. While the balance sheet improved from negative equity to $2M positive equity, the declining core business and vague strategic plans raise significant concerns about long-term viability.

MINNEAPOLIS, Nov. 15, 2024 (GLOBE NEWSWIRE) -- SharpLink Gaming, Inc. (Nasdaq: SBET) (“SharpLink” or the “Company”), an online performance-based marketing company serving the U.S. sports betting and iGaming industries, today announced its financial results for the three and nine months ended September 30, 2024.

Financial Highlights

• Revenues decreased 27.7% to $2,838,908 for the first nine months of 2024, compared to $3,925,618 for the same nine-month period in 2023. For the three months ended September 30, 2024 and 2023, revenues declined 34.7% to $881,690 compared to $1,349,331, respectively.
  
• Total operating expenses declined 25.9% to $4,426,835 from $5,977,327 for the nine months ended September 30, 2024 and 2023, respectively; and total operating expenses dropped 46.0% to $970,080 from $1,795,057 for the three months ended September 30, 2024 and 2023, respectively.
  
• For the nine months ended September 30, 2024, net income climbed to $11,002,266 after factoring net income from discontinued operations of $14,567,733 – up 673.3% from a net loss of $9,114,443 inclusive of the net loss from discontinued operations of $2,523,754 posted for the comparable nine months in the prior year. After factoring a net loss from discontinued operations of $97,139, the net loss for the three months ended September 30, 2024 decreased 68.9% to $885,131 when compared to a net loss of $2,849,547 for the same three months ended September 30, 2023 after factoring a net loss from discontinued operations of $822,100.
  
• As of September 30, 2024, cash on hand was $1,850,206 and total stockholders’ equity was $2,020,143. This compared to $2,487,481 cash on hand and total stockholders’ deficit of $9,399,769 as of December 31, 2023.
  

Commenting on the results, SharpLink Chairman and CEO Rob Phythian said, “The notable decline in operating expenses reflects SharpLink’s continued focus on streamlining our affiliate marketing business; and the significant improvement in our bottom line results is largely a result of our $22.5 million cash sale of our SportsHub fantasy sports and sports game development businesses to RSports Interactive, Inc. earlier this year. Since that time, we have succeeded at scouring our balance sheet, eliminating virtually all of our debt, and have turned our attention to identifying, qualifying and pursuing compelling strategic growth opportunities that we believe can best be leveraged to create and enhance long-term sustainable value for our shareholders. As we progress through to the end of the year, we look forward to sharing much greater insight into our future plans for SharpLink resulting from the collective due diligence efforts of our leadership team and our highly engaged Board of Directors.”

For more detailed information about SharpLink’s Third Quarter 2024 financial results, please refer to the Company’s Quarterly Report on Form 10-Q filed yesterday with the U.S. Securities and Exchange Commission and accessible online at www.sec.gov or via SharpLink’s investor relations page at https://investors.sharplink.com/

About SharpLink Gaming, Inc.

Headquartered in Minneapolis, Minnesota, SharpLink is a trusted marketing partner to leading sportsbooks and online casino gaming operators worldwide. Through its iGaming affiliate marketing network, known as PAS.net, SharpLink focuses on driving qualified traffic and player acquisitions, retention and conversions to U.S. regulated and global iGaming operator partners worldwide. In fact, PAS.net won industry recognition as the European online gambling industry’s Top Affiliate Website and Top Affiliate Program for four consecutive years by both igamingbusiness.com and igamingaffiliate.com. SharpLink also owns and operates a portfolio of direct-to-player, state-specific, affiliate marketing websites designed to attract, acquire and drive local sports betting and online casino gaming traffic to its valued partners which are licensed to operate in each respective state. For more information, please visit www.sharplink.com.

Forward-Looking Statements

This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the Company’s ability to grow its business through strategic growth opportunities, the potential benefits of the Company’s products, services and technologies and other statements that are not historical facts, including statements which may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including without limitation, the Company’s ability to achieve profitable operations, government regulation of online betting, customer acceptance of new products and services, the demand for its products and its customers’ economic condition, the impact of competitive products and pricing, the lengthy sales cycle, proprietary rights of the Company and its competitors, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the SEC. The Company does not undertake any responsibility to update the forward-looking statements in this release.

CONTACT INFORMATION:
INVESTOR AND MEDIA RELATIONS
ir@sharplink.com

FAQ

What was SharpLink Gaming's (SBET) revenue for Q3 2024?

SharpLink Gaming's revenue for Q3 2024 was $881,690, representing a 34.7% decrease from $1,349,331 in Q3 2023.

How much did SharpLink Gaming (SBET) receive from selling SportsHub businesses in 2024?

SharpLink Gaming received $22.5 million from the cash sale of its SportsHub fantasy sports and sports game development businesses to RSports Interactive, Inc.

What was SharpLink Gaming's (SBET) net income for the first nine months of 2024?

SharpLink Gaming reported net income of $11,002,266 for the first nine months of 2024, including $14,567,733 from discontinued operations.