Rivalry Corp.

Good morning, ladies and gentlemen, and welcome to the Rivalry Corp year-end and fourth quarter 2022 conference call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Wednesday, April 26, 2023. I would now like to turn the conference over to John Vincic, Investor Relations. Please go ahead.

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'd like to remind listeners that certain statements made during this conference call presentation may constitute overlooking 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 the 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 perspectives 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'd like to turn the call over to Stephen Saltz. Stephen?

Thank you, John, and thank you, everyone, for joining us today. Although the company has delivered many notable achievements throughout its history, I believe the Q4 full-year 2022 results The preliminary Q1 2023 results and the announcement of a 10 million equity financing all released this morning collectively represents the densest and highest quality catalyst in Rivalry's history. Every period we have reported since becoming a public company has told a consistent story of accelerating growth and a scaling economic profile, demonstrated by narrowing net losses every quarter on our path to profitability. And this report is no different. On a year-over-year basis, we've delivered triple-digit percentage growth across all key performance metrics, all while maintaining our defining position in next-generation betting globally, with a fast-growing user base of millennial and Gen Z customers, accounting for 97% of active bettors in 2022, and a market-leading esports betting product, which generated nearly 90% of the company's sportsbook handle in 2022. In full-year 2022 versus 2021, we more than doubled revenue, tripled betting handle, and quadrupled gross profits. Q4-22 showed even more compelling growth rates, including revenue up more than 4x year-over-year and gross profit up more than 12x. Q4-22 was Rosler's best-ever quarter in terms of handled revenue and gross profit, only surpassed by Q1 of this year, where our preliminary results reached new all-time highs on every measure. In particular, gross profit was $5.4 million in Q1-23, an 8x increase over Q1-22, exceeding our gross profit in the first three quarters of 2022 combined, while marketing expenses declined approximately 10% in Q1 of this year versus Q1 of last year, which we believe clearly highlights the operating leverage intrinsic to our approach that we speak about so regularly. This core strategy built on product differentiation, brand equity, and a targeted demographic of users reduces our reliance on bonuses and linear spend to capture and engage customers, allowing us to avoid the pitfalls many of our competitors in the space fall into, while simultaneously sharpening our customer economics that, as we mentioned a moment ago, increased with scale. This is further evident by the ongoing trend of reduced net losses sequentially that we're seeing across the company. In Q1-23, our preliminary reported net loss of $3.5 million is down from $6.6 million in Q1 of last year, the lowest since we've gone public and continues to chart a path to profitability for the company. Contributing to our growth over the past three quarters has been our launch and expansion in the casino segment. This began with a single third-party game in Q3 of last year, contributing 30% of betting handled, 15% of revenue in that quarter, despite little to no marketing efforts. Since then, we expanded the offering with a half-dozen games in Q4-22, along with the debut of our interactive and proprietary platform, Casino.exe. We followed that up in Q1-23, further bolstering our casino offering with table games and live dealer, as we continue to develop this segment with a selective curation of games that cater to our core audiences. of digitally native users and their unique consumption habits. In this brief timeframe, Casino has already started to generate just under half of our total betting handle, smoothing out the seasonality of the esports calendar and stabilizing margin profiles amid the relative volatility of a Sportsbook product versus a Casino offering. The success of Casino has validated several fundamental aspects of our overarching product strategy and thesis. One, with Casino.exe, we focused on creating a truly differentiated offering that is unique to Rivalry further distinguishing our platform from competitors and tailoring the user experience to the next generation of bettors. The output from these product initiatives are economically rewarding, establishing an entertaining and proprietary experience that increases engagement among our users and spreads organically through word of mouth, enabling us to achieve the level of betting activity that we're generating today with almost $0 spent on direct casino marketing efforts. This also demonstrates our ability to convert brand loyalty into economically rewarding products and activate our customers. And finally, while Casino continues to deliver material growth, Sportsbook is also trending positively on a year-over-year basis, and we're seeing almost no cannibalization in user wallets with the introduction of Casino bringing net increases to customer economics. On that note, Sportsbook revenue reached a record of $7.1 million in Q4, an increase of $1 million from the prior quarter, despite a seasonally slow event calendar during that period. And we exceeded that record by a wide margin in Q1 of this year, surpassing $10 million of revenue on our Sportsbook product, Sportsbook Vertical, for the first time. These results are encouraging as we look ahead to the rest of 2023. It is worth reminding that all growth has been organic since the launch of the company in 2018. And finally, I want to touch on the announced $10 million equity financing this morning. We are very pleased to have world-class global bookmaker Pinnacle, alongside other gaming technology and payment stakeholders, participating in this financing round. We believe the terms at $1.50 per share and the strategic value of the stakeholders participating in this round represents a vote of confidence in our one-of-a-kind team, market strategy, and unique ability to execute within this emerging vehicle, Vertical. As evident by the momentum we've demonstrated in our results today, this investment arrives at a transformative point in the company's journey where our overarching strategy and unique position at the intersection of esports and betting is increasingly being validated as one with uncapped upside and incredible torque. And this financing, when combined with our ongoing trend of narrowing net losses and the plus 17% average month-over-month growth in revenue we've achieved on both a trailing 12-month and trailing two-year basis, has us very encouraged that we are equipped to scale to the next phase of company growth and continue the trend toward profitability. I'll touch on some broader points and outlook in a moment, but at this point, I'll turn the call over to our CFO, Keita, to review our financial results in greater detail.