Rivalry Announces Record Third Quarter 2022 Results and First-Ever Profitable Month in October

Esports Betting, Expanded Casino Offering, and Deepened Brand Footprint Among Next Generation Consumers Drive Record Quarter and Net Profit in October

• Record betting handle of $70.3 million in Q3 2022, up 203% year-over-year, and 83% quarter-over-quarter.

• Record revenue of $7.1 million in Q3 2022, up 93% year-over-year, and 35% quarter-over-quarter.

• Gross profit of $2.1 million in Q3 2022, an increase of 263% year-over-year and consistent with Q2 2022.

• Momentum has continued into the fourth quarter with a single-month record betting handle of $37.2 million and revenue of $4.5 million in October 2022, achieving the first profitable month in the Company’s history.

• Operating leverage and profitable customer unit economics set stage for accelerated growth as the Company scales into new verticals and markets.

• Strong cash position and no debt provides an important foundation for further execution.

Rivalry Corp., an internationally regulated sports betting, media, and technology company, today announced its financial results for the three and nine-month periods ended September 30, 2022. The Company also announced preliminary results for the month of October, 2022. All dollar figures are quoted in Canadian dollars.

“Our leading brand position among Millennial and Gen Z consumers was a catalyst in generating meaningful revenue from esports betting during a period of several tentpole international events, and ultimately driving record results in the third quarter,” said Steven Salz, Co-Founder and CEO of Rivalry. “Our differentiated strategy and product offering is key in connecting with a demographic that legacy operators aren’t equipped to serve. We’ve created brand equity, loyalty, and consumer engagement that continue to guide our successful player acquisition and retention strategy, enhance customer unit economics, and highlight the operating leverage within the business that increases as we scale.”

“The momentum we saw during Q3 has continued into this current quarter as we delivered record results in October, including reaching our first profitable month,” Salz continued. “Delivering a clean net profit on a normalized basis is a promising validation of our overarching strategy which prioritizes sustainable user economics and careful capital allocation. While October will likely set our high benchmark in 2022 as seasonally one of the strongest months, we believe our +20% month-over-month average growth over the past year, successful casino product expansion, and increased market share ownership of esports betting positively signals directionally as to where we are headed on underlying profitability in the future.”

Third Quarter 2022 Highlights

• Betting handle was $70.3 million in Q3 2022, a year-over-year increase of 203% compared to $23.2 million in Q3 2021, and up 83% sequentially from $38.4 million in Q2 2022. Betting handle exceeded the previous record quarterly high of $40.2 million reported by the Company in Q1 2022.

• Revenue was a record $7.1 million in the third quarter, a year-over-year increase of 93% from $3.7 million in Q3 2021, and represented the Company’s highest-ever revenue in any quarter. Revenue was up 35% sequentially from $5.3 million in Q2 2022.

• The Company launched its first-ever casino game during the quarter and saw immediate impact, contributing 30% of betting handle and 15% of revenue in Q3 2022 despite minimal marketing efforts.

• Gross profit was $2.1 million in the third quarter, a year-over-year increase of $1.5 million or 263% from $0.6 million in Q3 2021, and up 1% sequentially from $2.1 million in Q2 2022.

• Company maintained a market leadership position among next generation consumers with 82% of active users under the age of 30-years old and continues to highlight significant opportunities in esports betting, demonstrated by over 90% of sportsbook handle derived from esports in Q3 2022.

• The Company had $23.0 million of cash and no debt as at September 30, 2022.

October 2022 Preliminary Results

• Betting handle for the month ended October 31, 2022 was $37.2 million, a year-over-year increase of 190% compared to $12.8 million in October 2021, representing an all-time single-month record for the Company.

• Revenue was $4.5 million in October 2022, a year-over-year increase of 501% from $0.7 million in October 2021, and also represented a single-month record.

• Gross profit was $2.1 million in October 2022, a single-month record, equaling the entire reported Q3 2022 gross profit.

• October delivered the Company’s first monthly net profit, on a normalized basis, representing a meaningful milestone that demonstrates the inherent operating leverage in the Company’s model and path forward to future sustained profitability.