US lottery broker and news portal Lottery.com reported a higher net loss for the first quarter of its 2022 fiscal year after a 285.5% increase in revenue was offset by a sharp rise in expenses.
Revenue for the three months to March 31, 2022 was $21.2m (£17.0m/€20.2m), up sharply from 5.5 million of the corresponding period last year.
Lottery.com said the growth was primarily driven by the sale of LotteryLink credits to a subsidiary of its LotteryLink brand. The broker said this was done primarily to acquire prepaid promotional rewards that can be issued by the affiliate to consumers for their purchase of games and lottery services from Lottery.com upon account activation.
Cost of revenue increased 10.3% year-on-year to $3.2 million, leaving $18.0 million in gross profit for the quarter, up 620.0%.
However, Lottery.com also reported an increase in expenses, with operating costs up 537.7% to $33.8 million, mainly due to staff costs which climbed 2,263.6%. at $26.0 million. Other costs were also higher, but did not increase at a pace comparable to personnel costs.
This resulted in an operating loss of $15.8 million, compared to $2.8 million last year. After factoring in $3,389 of other expenses, compared to $2.7 million of other net income last year, that left a pretax loss of $15.8 million, nearly three times the $5.5 million loss recorded in the first quarter of 2021.
Lottery.com paid no taxes during the period, nor did it receive any tax benefits, but the broker noted a profit of $129,222 attributable to a non-controlling interest. As a result, it ended the quarter with a net loss of $15.7 million, compared to $5.5 million last year.
However, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) went from a loss of $2.6 million in the first quarter of 2021 to a positive figure of $7.7 million.
“I am pleased with our first quarter results and the team’s continued focus on our core business and on generating strong Adjusted EBITDA,” said Lottery.com Co-Founder and CEO, Tony DiMatteo.
“Once again, LotteryLink has demonstrated its ability to help grow our top line and bottom line and expand our user base with limited advertising spend.
“In our B2C business, our focus on market testing and obtaining approval to advertise on major digital media platforms has solidified our foundation to launch accretive user acquisition campaigns over the the rest of the year.”