Rivalry Corp.

Good morning, ladies and gentlemen, and welcome to the Rivalry Corp. First Quarter 2023 Financial Results Conference Call. At this time, all 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 May 24, 2023. I would now like to turn the conference over to John Vincic, Investor Relations of Rivalry Corp. Please go ahead.

Thank you, Joanna. Good morning, everyone. Our speakers on today's call will be Stephen Saltz, Co-Founder and Chief Executive Officer of Ravelry Corp, and Kata 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 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 annual information form dated May 1, 2023, 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?

Thank you, John, and thank you, everyone, for joining us today. Today's first quarter 2023 results are very exciting, setting all-time quarterly records for betting handle, revenue, gross profit, and our narrowest net loss yet, making that five quarters in a row now of narrowing net losses, charting a continued path to profitability. Given that we released our preliminary Q1 results last month, I will take the opportunity to spend a little bit less time talking about the numbers and more time drilling down into the strategic choices that have enabled us to continue delivering consistent growth year over year. I'll briefly go through some of the first quarter highlights since Cato will be discussing the results in more detail shortly. Betting handle was $120.2 million, tripling year over year. Revenue of $12 million increased 150%. Gross profit of $5.4 million was up 8x. And a net loss of $3.3 million was 50% lower than Q1 2022 and our narrowest net loss since going public in 2021. Each of these figures are in line with the accelerated growth we've been delivering for years now. And as I said on our Q4 investor call, rivalry is at an inflection point where the operating leverage created through our market strategy is meeting scale in the business. And if we continue to grow as we have been, profitability is within our sights. For now, I'd like to take a step back and speak to some of the ways in which our first quarter results validate our strategy and highlight what is driving our growth. First is the audience. We are executing against a targeted demographic of millennial and Gen Z consumers, which accounts for 97% of our active customers. It is this focus on next-generation betting and entertainment that guides the vision and direction for the company. This is a fast-consuming, digitally native customer cohort with unique consumption habits and entertainment preferences. Everything from our product to our brand and marketing caters to this core audience. This allows us to tailor the online betting experience from the ground up with this specific demographic in mind, and avoid the challenges of pursuing a much broader and mature audience that is oversaturated by our peers in this industry. Technology and design is a cornerstone of this approach, arming the company with significant capacity to continuously innovate on product and further create a betting experience on rivalry, which is original, engaging, and entertaining. The byproduct of engaging in fun products is increased user activity and satisfaction, translating into enhanced player values and margins. Whether that's exclusive casino games developed in-house, or original sportsbook features that separate us from competitors. This represents a material competitive advantage in our eyes. Next is building a great brand, organically loved by an audience of the Internet. Our leadership position among next-generation users allows us to acquire customers profitably through organic, word-of-mouth marketing and retain them through an affinity for our brand and pairing that with an incredible original product. We have demonstrated quarter after quarter that this approach can grow the business in such a way where increases in marketing spend are not linear to top-line growth. This was demonstrated quite clearly in this quarter, where we delivered multiple 100% growth on all KPIs year over year as compared to Q1 last year, with a 5% reduction in marketing spend and that loss being 50% lower. Content and media underpin this brand strategy, fusing world-class creative and entertainment with over 100 esports and gaming partners to engage online communities globally. In Q1, we added several new partners from top esports teams to influential gaming creators, establishing authentic touchpoints between our target audience and our brand that enhance our ability to activate customers around 10-pole events and tap into significant cultural moments in esports. And as of recently, we surpassed 85 million followers across our own media properties and creator partners combined. Collectively, these initiatives speak to our broader thesis and ambition to become the global leader in betting entertainment. Rivalry behaves much differently than our industry peers because we don't look at our business purely in the context of sports betting. Instead, we take inspiration from other great consumer products and category leaders, which wrap entertainment around the product and brand experience to create something unique for fans. We believe this is foundational to success for any consumer product targeting the next generation of consumers. The product transactionally or functionally working well is only one piece and expected from the customer. The real key is how well you can inject entertainment into the experience as a whole and ensuring there is connective tissue between that on-site or on-product entertainment experience and the outward facing brand you create through every marketing touchpoint. Truly doing this well is incredibly challenging and importantly, not something you can just buy. It takes time, a talented team, and a relentless year after year focus on honing product, brand, and marketing into one unified experience. The results of striking this balance speak for themselves and is the operating leverage we speak to so consistently on these calls since going public. I'd like to spend a minute providing one specific example of this product, brand, and marketing unity. Rivalry stands out from many sportsbooks by not being a combination of plug and play white label solutions as is so commonly utilized in our industry. The majority of our technology, as mentioned earlier, is built in-house, giving us the freedom to create custom features for almost everything, which we take advantage of as often as possible. During the launch of our cash-out feature, we wanted something that fit our brand more closely, so we introduced it as an animal-themed feature called Chicken Out. This is our version of cash-out, but rather than a sliding bar of your cash-out value on a bet, it's a chicken that starts as an unhatched egg and eventually turns into a rotisserie chicken, depending on how much of your bet you cash out of. To market this new feature, we created our own extended cut of the Are You Winning Sons, which is a popular internet meme among our demo, which introduced a new character to the mix, the chicken guy, who comes in to save the day. Chickens are also a visual motif of Counter-Strike Global Offensive, also known as CSGO, one of the top three esports and bet on titles at Rivalry, as they appear frequently throughout user gameplay. The next marketing campaign was to send a very muscular guy in a chicken suit to attend the biggest CSGO event of 2022, IEM Rio. The brand activation successfully hijacked the event for free as a rivalry chicken guy appeared live on global streams in front of hundreds of thousands of fans, featured on the official Twitter account of the event with over 1.2 million followers, and even making his way into the much-hyped after-event video on YouTube. But it's not over yet. Just when we thought the chicken train had slowed down, the muscular chicken made another appearance during a popular Twitch stream live in front of 15,000 plus viewers. It turns out that the CSGO community of this streamer liked the chicken guy as much as we do, so much so that a user handcrafted an in-game sticker for him. This is an in-game item in CSGO that now features our character, which again is tied to our product cash-out feature, Chicken Out. And it's still not over. Recently, we recruited some of South America's biggest CSGO content creators, bringing a combined audience of over 2.3 million fans into our network, and officially launched our partnership with them in a video that became Rivalry's most watched piece of content in 2023, with nearly half a million views in just a few days. In this video, we turned this chicken character, Chicken Guy, into an even deeper character IP of Rivalry's where he features as a mob boss. This character is increasingly becoming beloved in the region. And as of just last week, our chicken guy and new content creator crew headed off to Paris for the 2023 CSGO major, where they created a ton of incredible content and entertainment for this community of fans. So all this may sound a bit crazy, but really that is entertainment. And that is just one piece of marketing for one game in one region. We do this everywhere. And that is product connected to brand and marketing. And this is what we do and how we've increasingly found strength as a brand that is translating into results. It is my belief that our ability to do this at scale with the completely beloved brand now is beginning to set the industry precedent for betting entertainment and demonstrating that we have been able to carve out a powerfully unique position in a highly competitive sector. At this point, I'd like to turn the call over to our CFO, Keita, to review our financial results in greater detail.