FansUnite (FANS.TO) is a sports and entertainment company, focusing on technology related to regulated and lawful online sports betting, esports betting, casino and fantasy. Their mission is to be a leader in the gaming industry by providing their partners and players the industry’s most versatile and vertically integrated platforms with a portfolio of unique products and a focus on esports, sports betting, casino and the next generation of bettors.

Today the Company reported its Q3 2023 financial results. At time of writing, the stock is up 11.11% on the results.

Here are highlights. All amounts are reported in Canadian Dollars:

• Total revenue for the three months ended September 30, 2023 was $4.8 million, an increase of 12% as compared to $4.3 million over the same period in the prior year.
• Gross margin for the three months ended September 30, 2023 was 59%, an increase of 9% as compared to 50% over the same period in the prior year.
• Gross profit for the three months ended September 30, 2023 was $2.8 million, an increase of 27% as compared to $2.2 million over the same period in the prior year.
• Total Adjusted EBITDA for the three months ended September 30, 2023 was $0.2 million, an increase of $1.5 million as compared to ($1.3) million over the same period in the prior year.
• The Company had net working capital of $1.5 million as of September 30, 2023, as compared to ($4.2) million as of December 31, 2022.

In terms of the nine months ended fiscal 2023 financial highlights:

• Total revenue for the nine months ended September 30, 2023 was $17.2 million, a decrease of approximately 2% as compared to $17.5 million over the same period in the prior year.
• Gross margin for the nine months ended September 30, 2023 was 64%, an increase of approximately 10% as compared to 54% over the same period in the prior year.
• Gross profit for the nine months ended September 30, 2023 was $10.9 million, an increase of approximately 16% as compared to $9.4 million over the same period in the prior year.
• Total Adjusted EBITDA for the nine months ended September 30, 2023 was $1.1 million, an increase of $2.3 million as compared to ($1.2) million over the same period in the prior year.

“We are pleased to achieve continued growth as highlighted by our financial performance in the third quarter of 2023,” said Scott Burton, CEO of FansUnite. “With a focus on expanding our affiliate business, FansUnite reported substantial increases in our revenues and gross margins during Q3 of this year. These results reflect our strategy to focus on profitability while maximizing our cost efficiencies in all areas of our business.”

FansUnite also reached an agreement with Welsh-based UK sportsbook DragonBet to migrate off the Chameleon Gaming platform on September 3rd 2023. This is part of FansUnite’s strategy to streamline its business operations. As a result of this and the sale of Chameleon’s source code to Betr Holdings on May 8th 2023, FansUnite expects to achieve annualized cost savings of approximately $7.8 million, which includes reductions in salary and selling, general and administrative costs.

In terms of forward guidance, FansUnite intends to expand its affiliate operations across North America via Betting Hero by entering new betting jurisdictions as well as growing its additional revenue streams, which include Hero Research and Hero Hotline. FansUnite will continue evaluating new opportunities to achieve cost efficiencies across all business units without disrupting its revenue growth.

As mentioned earlier, the stock is up 11.11% with volume of 51,000 shares traded. The stock remains in its range and a close above $0.05 would take us to highs not seen since September of this year. The major resistance comes in at the $0.06 zone. This resistance level used to be previous support and was rejected twice in August and September this year. Regaining this zone would be a positive bullish step for the stock.