After turning over a new leaf in management, Youbet.com’s net income for the third quarter of 2008 experienced a significant increase in profit from the year before.
The company’s net income on continuing operations, which includes the Youbet Express wagering platform and United Tote, was $2.8 million, which reflects a four-fold difference from the $700,000 it earned during the same quarter in 2007.
“We believe that we have a stable and profitable platform to keep growing revenue,” said chief executive officer Michael Brodsky during a Nov. 6 conference call. “We are thrilled with our year-over-year improvements,” he added, explaining how the company would continue to focus on reducing its expenses in light of the current economic crisis.
Brodsky began the conference call by introducing the company’s new hires: David Goldberg, chief operation officer; Jeff Grossman, chief marketing officer; and Mike Ziegler, senior vice president, who all gave reports on the company’s progress.
“I think we’re setting a high level mark by bringing in new blood, new experience, and top people,” said Brodsky.
Brodsky also commented that while he is pleased with Youbet’s third quarter results, there is still room for improvement for the company by continuing to strengthen its track relationships instead of striving toward a national wagering model.
“We’re not waiting around for a national agreement…we’re growing the industry where it wants to grow,” said Brodsky. “Because we’re a virtual company, customers can move from place to place…I think we’re seeing a more disciplined view of how to develop an e-commerce business.”
One question brought up during the conference call was whether the competition for new customers would be more or less aggressive in the coming quarter.
“One challenge we continue to have is what the wagering population is, and how to go after those customers more effectively,” said Brodsky. “The best thing we have going is a disciplined and focused approach (to the situation).”
Total revenue from Youbet’s continuing operations was $29.3 million, down from around $35.2 million it earned during the same period last year.
Wagering revenue on the company’s Youbet Express platform was $23.4 million, which also dropped 12% from the third quarter of 2007 based on handle of $121.7 million, a decrease of 9% from last year’s period.
Youbet Express yield in the third quarter of 2008 was 7.8%, an improvement of 110 basis points from the same quarter last year mostly due to a shift in handle from lower-yielding content to higher-yielding tracks.
According to a Youbet release, the decline in handle could be attributed to the loss of content it previously had, as well as handle associated with the company’s decision to cease accepting wagers from certain states.
The company also reported that Youbet Express’ same-track and same-state handle decreased $3.9 million, or 3.2%, from the third quarter of 2007. Youbet Express handle that could be credited to new content was $4.8 million.