SharpLink (SBET) Q3 2024 earnings summary

Executive summary

• Completed sale of Sports Gaming Client Services and SHGN business units for $22.5 million in January 2024, resulting in a $14.6 million gain and a strategic shift to a single Affiliate Marketing segment.

• Realigned organizational structure to focus on Affiliate Marketing, operating a global network and U.S. state-specific domains for sportsbook and casino partners.

• Discontinued C4 technology and legacy MTS business, with all historical results reflected as discontinued operations.

• Net income for the nine months ended September 30, 2024, was $11,002,266, a turnaround from a $9,114,443 net loss in the prior year, driven by the gain on the business sale.

• Revenues from continuing operations declined 27.7% year-over-year for the nine months ended September 30, 2024, primarily due to market softening and customer losses.

Financial highlights

• Revenue from continuing operations declined 34.7% year-over-year for Q3 2024 to $881,690 and 27.7% for the nine months to $2,838,908.

• Gross profit margin decreased to 19.6% in Q3 2024 from 29.0% in Q3 2023, and to 26.1% for the nine months from 30.1% in the prior year.

• Net loss from continuing operations improved 47.4% year-over-year for the nine months to $(3,465,467).

• Net income from discontinued operations for the nine months was $14,467,733, reflecting the gain on the business sale.

• Cash on hand at September 30, 2024, was $1,850,206, down from $2,490,000 at year-end 2023.

Outlook and guidance

• Board initiated a formal review of strategic alternatives, including potential sale, merger, or other transactions; no deadline or definitive timetable set.

• Substantial doubt exists about the ability to continue as a going concern due to ongoing operating losses and need for additional capital.