Youbet.com, the online wagering company based in California, continued its growth trend in the third quarter of 2004 with income of $791,085, compared with a loss of $617,853 for the same period in 2003.
It marked the 11th consecutive quarter of growth for Youbet.com, whose wagering hub is located in Oregon.
Total revenue for the third quarter rose to $17.2 million, up 20.5% from the same period last year. Net revenue was up $1 million, or 22.7%, to $5.5 million. Youbet.com also reported that earnings before interest, taxes, depreciation, and amortization totaled $1 million for an increase of 46%.
Youbet.com chief executive officer Chuck Champion said the improved operating results reflect an increase in handle, which increased to a record $83.7 million for the third quarter of 2004, up $11.2 million (15.4%) from the same period last year. The handle figure is up slightly from the second quarter, traditionally the company's strongest.
Champion noted that in 2003, Youbet.com offered signals from Magna Entertainment Corp. racetracks outside of California. Those signals weren't available in the third quarter of this year. Handle on tracks whose signals were available in both quarters was up 23%.
"Our targeted marketing and promotion programs continue to be instrumental in our ability to grow our customer base, while migrating customers to higher-yielding tracks and wagering options," Champion said in a release. "Our platform offers tremendous scalability as we grow our customer base, (because) we currently utilize just 25% of our network's capacity and more than 90% of our costs are fixed.
"Over the last several quarters, we have made investments in management and infrastructure to support not only our growth in our domestic horse racing advance deposit wagering platform, but in our ability to leverage this platform in new markets and other forms of gaming. As the only company focused 100% on advance deposit wagering opportunities, Youbet.com is uniquely positioned to pursue domestic (account wagering) consolidation opportunities.
"In addition, we continue to focus on potential acquisitions of complementary businesses or technologies, both domestically and internationally, which would allow us to grow our content offerings and base of customers."
Operating expenses, excluding track and licensing fees, were $4.8 million for the third quarter, up 18.6% from last year but about $151,000 less than the figure from the second quarter of 2004. The year-over-year increase is primarily due to significantly higher sales and marketing costs for the 2004 third quarter, the company said.
In October, Youbet.com said it would attempt to acquire American Wagering Co., which supplies about 85% of the sports wagering computers used by Nevada casinos, for $9.5 million. American Wagering and Leroy's Horse and Sports Palace, a wholly owned subsidiary, are operating under Chapter 11 bankruptcy protection.