TheScore has seen revenue fall 71.8% year-on-year in the three months to May 31, in a period which chief executive John Levy described as an “unprecedented challenge” for the Canadian media and betting business.
With the novel coronavirus (Covid-19) crisis leading to the suspension of sporting events around the world, revenue for the three months to May 31 declined to CAD$2.4m.
This came entirely from media activities, compared to $8.5m for Q3 2019. Of this sum, $1.1m of the total came from theScore’s native Canada, with a further $1.3m coming from other markets, predominantly the US.
Despite the disruption to the sporting calendar caused by Covid-19, monthly active users on iOS and Android came in at 2.9m, representing around 75% of the average monthly actives in Q3 2019.
This, theScore explained, was down to a lack of live sports, which drive engagement with the app. However, the total average monthly user sessions on its app came in at 100m, or 35 sessions per-user per-month.
For its sportsbook offering, theScore Bet, handle amounted to $3.5m, down from $13.8m for the three months to 29 February. From these stakes, theScore generated gross gaming revenue of $0.1m, though after promotional costs and fair value adjustments of unsettled bets, it posted a loss of $22,000 for the quarter.
“The past quarter has been a period of unprecedented challenge, as the world grappled with the vast impact of the Covid-19 pandemic, including the disruption of nearly every major sports league and event,” theScore’s founder and chief executive John Levy (pictured, left) said. “Through this difficult period, I couldn’t be prouder of how our team has come together to respond, first and foremost, by taking care of each other.
Levy explained that during the third quarter, the business had “continued to press ahead at full strength” on key initiatives such as further enhancements to its mobile sportsbook. It remains on track to launch in Colorado and Indiana – where it has been awarded temporary sports betting licenses – during the summer, he added.
While theScore said in Q2 that it aimed to reduce costs where possible, expenditure still far outstripped revenue in the third quarter. Product development and content costs declined to $1.6m, while sales and marketing expenses fell to $1.8m.
However technology and operations expenses jumped to $4.0m, with general and administrative costs growing to $3.7m, resulting in a loss before interest, tax, depreciation and amortisation of $9.0m.
After depreciation and amortisation charges doubled to $1.5m, this resulted in the business’ operating loss growing to $10.2m, compared to $1.9m in the prior year.
After financial expenses of $438,000, theScore’s net loss for the quarter stood at $10.7m.
Despite the third quarter struggles, Levy remained optimistic about a swift recovery as sports return. The National Basketball Association and National Hockey League are due to resume this week, and with Major League Baseball – for which theScore serves as an official partner – is already underway.
“Live sports has the power to serve as a positive and welcome outlet during what remains a difficult and challenging time,” Levy said. “We’re primed to deliver a best-in-class, integrated media and gaming experience as fans eagerly welcome major leagues and sporting events back to play.
“To that end, we’re already seeing great momentum building.”
Since MLB’s return on July 23, Levy said, sessions on theScore app had doubled compared to the prior days, while theScore Bet almost matched its handle from Super Bowl week in the first week of matches.
However, MLB has already seen two games suspended after players tested positive for Covid-19, with cases on the rise across a number of US states.
For the three quarters of theScore’s 2020 fiscal year, revenue was down 26.1% to $18.3m. Costs, on the other hand, rose 51.0% to $44.5m, with the loss before interest, tax, depreciation and amortisation rising to $22.2m.
Operating loss for the nine month period widened to $26.2m, and after $2.1m in finance expenses, its pre-tax loss stood at $28.3m. A deferred tax charge reduced this slightly, however, by $3.1m, for a net loss of $25.7m after a $411,000 loss from foreign exchange adjustments.