Rivalry Corp.

Good morning, ladies and gentlemen, and welcome to the Rivalry Corp Q1 2022 Results Conference Call. At this time, note that all phone lines are in a listen-only mode, but following the presentation, we will conduct a question-and-answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Thursday, May 26, 2022. And I would like to turn the conference over to John Vincic, investor relations for Rivalry Corp. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Our speakers on today's call will be Stephen Saltz, co-founder and chief executive officer of Rivalry Corp, and Keita Corey, chief financial officer. Before we begin, I would like to remind listeners that certain statements made during this conference call presentation may constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance, or achievements of Rivalry Corp. and its subsidiary entities or the industry in which it operates to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. When used in this conference call presentation, such statements use words such as may, will, expect, believe, plan, and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this presentation. These statements involve known and unknown risks, uncertainties, and other factors, including those risk factors identified in the company's prospectus dated September 17, 2021, under the heading risk factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under securities legislation. And now, I would like to turn the call over to Stephen Saltz. Stephen?

Thanks, John. And thank you, everyone, for joining us. As our Q4 and annual earnings conference call was just four weeks ago, and we discussed our pre-release Q1 handle then, among a number of other strategic objectives for 2022, this quarter's remarks will be a little more concise. On the subject of timing, our first quarter results do not include any impacts on our operations in our two new regulated markets, Ontario and Australia, as we launched in Ontario April 4th when the market opened, and Australia on May 9th. We will be able to more meaningfully address the progress we've seen in those markets, as well as our expectations in future quarters. However, I'd like to take a moment to remind everyone of Rivalry's market entry strategy. This is something we discussed in more detail in our recent annual letter and have executed on consistently throughout our history. In many ways, it is the inverse of our peers. In new markets, we start slow on spend, take in feedback, conduct user testing, iterate against it, and build brand awareness in parallel. As underlying key performance indicators hit our target range, we then increase spend accordingly. The most critical piece of our strategy is cost-effective customer acquisition. This requires long-term brand building that turns into brand love with success. Over time, we expect that success to translate into declining customer acquisition costs as beloved brands self-perpetuate product discovery. At that point, operating leverage becomes events as reliance on new spend for every incremental dollar of revenue declines. Our peers will often do the inverse of this, deploying their highest spend in the initial flurry of a marketing launch through promotions, bonusing, and various marketing deals, which then tapers off over time as they see their competitors in the market cool off on spend as well. This has been the case across nearly all U.S. state regulated launches. As an example, in Ontario, our initial experience and that of customers have matched that U.S. model. The market saw a burst of simultaneous launches on April 4th, where capital cannons have since been firing at one another to see who can subsidize the customer the most, i.e. through the offering of promotions and bonuses. This competitive dynamic has played out throughout history across a number of industries. For example, most recently in rideshare and food delivery apps, and like in sports betting, investors are now looking for where the operating leverage truly exists in this model long-term and how companies can sustainably reach a profit. Our slower and more staged approach, which perhaps seemed misguided in a bull market, now looks prudent. Critically, it allows us to pace our balance sheet in a market where runway is vital while still giving the business oxygen to deliver results. And the underlying foundation to all of this is customer health on unit economics first and increased spend second. To wrap this point up, the moderator of the largest Ontario betting chat room heading into launch day on April 4th said it best in a post to the entire community there, and I quote, this is where the money is made. There will be no shortage of opportunities to take advantage of sportsbooks overpaying for customer acquisition. Need I say more? Lastly, I want to provide a quick highlight of our Q1 results, leaving the details for our CFO, Kata Corey. In Q1, we saw continued momentum. Betting handle was $40.2 million, a year-over-year increase of 273% and up 62% sequentially from Q4-21. Revenue was $4.8 million in the first quarter, a year-over-year increase of 149% and up 122% sequentially from Q4-21, both of which were all-time records for the company. And again, this is all generated out of the same international markets as permitted under our Isle of Man license. This strength continued to be driven primarily by our esports business with our betting handle mix still heavily weighted towards esports at approximately 90% of handling Q1 and traditional sports representing the difference. The seasonality for esports is such that late January sees the kickoff of the esports season across all major game titles, which then continues strong until the end of the quarter. Mid-April or early Q2 sees that abate as the first part of the season ends for many titles, only to pick up again in June. As a result, Q2 usually sees a softer esports event calendar than Q1, most of Q3 a fairly strong calendar, followed by the offseason in Q4. At this point, I'll turn the call over to our CFO, Keita, to review our first quarter results in greater detail.