SharpLink (SBET) Q2 2024 earnings summary

Executive summary

• Completed sale of Sports Gaming Client Services and Sports Hub Gaming Network units for $22.5 million in January 2024, resulting in a significant gain and shift to a single Affiliate Marketing segment.

• Discontinued C4 technology and legacy MTS business; received $297,387 earn-out from MTS sale.

• Net income for the six months ended June 30, 2024 was $11,887,397, a 289.7% improvement from a $(6,264,904) loss in the prior year, primarily due to the $22.5 million sale of business units.

• Net loss from continuing operations improved 61.9% year-over-year to $(916,664) for Q2 2024, reflecting cost reductions.

• Initiated a formal review of strategic alternatives, including potential sale, merger, or business combination.

Financial highlights

• Q2 2024 revenue from continuing operations was $981,272, down 27.0% year-over-year; six-month revenue was $1,957,218, down 24.0%.

• Gross profit for Q2 2024 was $280,130, down 30.2% year-over-year; gross margin was 28.5% versus 29.9% in Q2 2023.

• Operating expenses decreased 30.5% year-over-year to $1,484,680 in Q2 2024, reflecting lower payroll and marketing costs.

• Net income from discontinued operations was $14,564,872 for the six months ended June 30, 2024, driven by the gain on the business sale.

• Cash on hand as of June 30, 2024 was $2,435,600, with working capital of $2,739,096.

Outlook and guidance

• Management highlights the need for additional capital to fund growth and operations, with uncertainty about the availability of future funding.

• The company is exploring strategic alternatives but has not set a timetable or guaranteed an outcome.

• The company may need to raise further capital and has an ATM Sales Agreement in place for up to $1.68 million.