Deep Dive: BetMakers Technology ASX:BET

📅 May 2025
🌐 Website: www.betmakers.com

FIRSTLY: A look at the BetMakers Technology ASX:BET 2024 Annual Report

Here is the forensic financial analysis of BetMakers Technology Group Ltd (ASX:BET) for FY2024.

📊 Balance Sheet

Risk Indicator	Status	Comments
Goodwill >25% of Assets	✅ No Flag	Goodwill and intangibles totaled $59.1M vs net assets of $111.6M; while high, net tangible assets remain positive.
Rising Receivables Days	✅ No Flag	Receivables analysis not directly disclosed; no abnormal growth trends evident.
Inventory Growth vs Profit	✅ No Flag	Not applicable — company operates a service-based model with no inventory.
High Borrowings	✅ No Flag	Debt levels not highlighted as concerning; no breach of covenants noted.
Loans to Related Parties	✅ No Flag	No related party loans reported.
Idle Cash	✅ No Flag	Company actively investing in technology and acquisitions, no sign of idle cash.

📈 Income Statement

Risk Indicator	Status	Comments
Revenue vs Profit Divergence	🔴 Red Flag	Revenue flat at $95.2M, yet net loss remains high at $38.7M; profit performance not improving despite cost resets.
Capitalised R&D/Interest	🟠 Amber Flag	$6.3M capitalised for “Next Gen” platform; no capitalisation in FY23, indicating a change in policy.
Extraordinary Items	🟠 Amber Flag	Impairments and valuation gains/losses present but reduced vs prior year. Still material to profit fluctuations.
Tax Rate Drop	✅ No Flag	Deferred tax asset of $20.1M affects result, but not a drop in effective tax rate per se.
Profit vs Cash Flow	🟠 Amber Flag	While EBITDA loss improved (–$7.2M vs –$27.8M), cash flow not explicitly detailed; still operating at a net loss.
One-Off Gains Boosting Profit	✅ No Flag	No clear revenue boosts from asset sales or other one-off gains.

🏛️ Governance, Disclosure & Audit

Risk Indicator	Status	Comments
Auditor Changes	✅ No Flag	Audit opinion unmodified; no auditor changes.
Audit Qualifications	✅ No Flag	Clean audit opinion issued.
Exec Departures	🔴 Red Flag	CFO Anthony Pullin resigned March 2024; replaced in June by Carl Henschke.
Transparency Issues	✅ No Flag	Disclosures comprehensive and consistent.
Board Weakness	✅ No Flag	Board includes skilled and diverse non-executive directors.
Executive Pay Misalignment	🔴 Red Flag	High share-based payments despite ongoing losses (e.g., $1.42M to Todd Buckingham for rights vesting).
Promotional Language	🟠 Amber Flag	Optimistic tone (“transformation”, “significant progress”) not yet backed by profitability or revenue growth.

✅ Final Summary

Category	🔴 Red Flags	🟠 Amber Flags
Balance Sheet	0	0
Income Statement	1	3
Governance / Disclosure	2	1

🔴 Total Red Flags: 3
🟠 Total Amber Flags: 4

🟠 Amber & 🔴 Red Flag Overview

Persistent Net Losses: Flat revenue with $38.7M net loss raises questions about scalability and unit economics.
Capitalised Development Costs: Newly adopted capitalisation ($6.3M for “Next Gen”) raises concerns about consistency and comparability.
Executive Remuneration: High equity-based awards granted despite poor shareholder returns and losses.
Management Turnover: Recent CFO change amid restructuring adds to governance risk.
Optimistic Outlook vs Financial Reality: “Turnaround” narrative is not yet substantiated by revenue or profit performance.

Overall, BetMakers presents a high-risk profile typical of turnaround-stage tech firms, with execution risk remaining elevated.

SECONDLY: A look at their Half-Year Report for 2025

Trend Analysis: BetMakers Technology Group Ltd (ASX:BET): Comparing FY2024 Annual Report with 1H FY2025 Interim Report

📉 Financial Deterioration Indicators

Revenue Decline: Revenue dropped 19.4% to $41.4M in 1H FY25 (vs. $51.4M in 1H FY24), showing weakening top-line momentum and client attrition.
Widening Losses: Net loss widened to $17.1M from $13.5M in pcp — indicating no clear path to profitability yet.
Net Tangible Assets Per Share: Fell sharply from 8.56c (1H FY24) to 3.63c (1H FY25) — reflects significant value erosion.
Cash Burn: Operating cash flow turned negative ($5.4M outflow vs. $2.4M inflow in 1H FY24); cash dropped from $29.3M to $20.9M in just six months.
Related Party Borrowings Introduced: A new $3.2M related party loan at 12% interest — potentially expensive funding reflecting capital strain.
Rising Debt: Borrowings increased from nil to $3.2M, though total liabilities stayed relatively flat.
Accumulated Losses: Increased from $203.5M to $222.0M, pushing net assets down by ~15% in six months.

🔧 Operational Adjustments

Cost Base Reset Continues: Employee costs down significantly ($18.4M vs $24.7M pcp); headcount reduced from 383 to 338.
Adjusted EBITDA: Slight improvement to –$1.3M (vs –$1.4M); still negative, but impact of restructuring and margin control is starting to show.
Capex Focused on Software: $3.8M capitalised into software development in 1H FY25; reflects ongoing reliance on intangible build-up.
Platform Migration: Australian clients transitioned to Apollo (Next Gen) platform — expected cloud savings in 2H FY25.
Segment Pressure: Revenue dropped in both segments: Global Betting Services (–24.6%) and Global Tote (–15.1%).

🔭 Strategic Shifts & Positive Signals

Expansion Initiatives:
- Bet365 launched fixed odds racing in NJ & CO — early monetisation of platform IP.
- Contract with Sportradar post-period — global distribution leverage of AdVantage platform.
- New launches in Asia and ADW upgrade (GTX) on track — should reduce infrastructure costs.
Gross Margin Maintenance: 59.7% gross margin in 1H FY25 (vs. 64.4% in 1H FY24); though lower, still robust given revenue decline.

📌 Conclusion: Position Appears Eroding

Despite structural improvements and platform upgrades, BetMakers’ core financial metrics have deteriorated in 1H FY25. The topline contraction, deepening losses, dilution of tangible equity, and new high-cost related party debt reflect a weaker operational position relative to FY2024.

While some cost efficiencies are evident, the company remains in a vulnerable phase with persistent negative cash flows and a dependence on internally generated intangible assets for future growth. Execution of new strategic partnerships will be critical to stabilise and recover momentum by FY26.

THIRDLY: A look at their Third Quarter Update for year 2025.

Quarterly Progress Evaluation – Q3 FY2025: Based on: FY2024 Annual Report, 1H FY2025 Interim Report, and April 2025 Quarterly Update Presentation

📊 Performance Improvement Indicators

Revenue Growth Resumed: Q3 FY25 revenue rose 3.7% QoQ, reversing the 19.4% YoY decline noted in 1H FY25.
Gross Margin Recovery: Gross margin improved to 63.9% in Q3 FY25 (vs 59.7% in 1H FY25 and 57.8% in Q1 FY25), signaling cost base leverage from technology upgrades (e.g., Apollo).
Adjusted EBITDA Turned Positive: Achieved $1.2M Adjusted EBITDA in Q3 FY25 — first meaningful positive result after multi-period losses (e.g., –$28M FY23; –$1.3M in 1H FY25).
Positive Operating Cash Flow: Q3 FY25 generated $3.0M in operating cash flow vs a $5.4M outflow in 1H FY25.
Annualised Cost Base Compression: Now $53.9M, down from $65.3M FY24 — supports sustained profitability if revenue stabilises or grows.

⚠️ Remaining Risks and Considerations

Revenue Still Below Prior Year: Even with QoQ growth, revenue remains significantly below prior periods (e.g., $95M in FY23 vs annualised ~$83M now).
Dependence on Capitalised Costs: EBITDA improvement still includes capitalised costs, which masks underlying cash burn if sustained.
Market Confidence Lagging: Despite improving metrics, BET’s market cap and share price remain depressed, reflecting investor caution.
Loan Still Outstanding: Related party loan ($3.2M at 12% interest) remains a risk unless repaid from ongoing positive cash flows.

📌 Conclusion: Trajectory: Improving

The Q3 FY25 results mark a genuine financial inflection point for BetMakers. For the first time in recent periods, the company posted positive adjusted EBITDA and operating cash flow. Gross margin recovery and ongoing cost reductions show that restructuring is yielding results.

However, revenue base needs to grow sustainably to confirm a turnaround, and the business remains exposed to execution risk — particularly in monetising new partnerships (e.g., Sportradar) and launching GTX platform products.

BetMakers is transitioning from erosion to potential recovery, but consistent quarterly delivery is needed to maintain credibility.

LASTLY: A look at today’s (22/05/2025) May Trading Update

Commentary on May 2025 Trading Update: In Context of FY2024, 1H FY2025, Q3 FY2025, and Strategic Developments

📈 Ongoing Positive Momentum

The May 2025 trading update confirms that BetMakers’ turnaround is gaining traction, reinforcing earlier Q3 signals of financial and operational improvement:

April 2025 Performance:
- Adjusted EBITDA: $0.88M for April (excluding $0.45M capitalised costs)
- Gross Margin: 65.2% — up from 63.9% in Q3 FY25, moving closer to 70% target
- Free Cash Flow: Positive — confirms operational cash generation is continuing
Technology Execution:
- Apollo Platform Uptake: Monthly bets up 50% and active users up 35% (March–Sept 2025 comparison)
- GTX Platform: Pre-launch stage, positioned to replicate Apollo’s margin-enhancing effects in the tote segment
Strategic Partnerships: Deployment success and collaboration with Sky Racing, along with the Sportradar partnership, are beginning to translate into real user growth and market reach.

🔎 Forensic Financial Observations

Area	Status	Commentary
Operating Cash Flow	✅ Positive	April and Q3 both posted positive cash flow, a major reversal from past years.
Profitability	🟢 Improving	Adjusted EBITDA turning positive consistently is a clear shift.
Gross Margins	🟢 Improving	65.2% in April indicates ongoing margin expansion.
Product Maturity	🟢 Improving	Apollo benefits now visible in financials; GTX nearing monetisation.
Balance Sheet	🟠 Watch	No new details, but earlier risk factors (e.g. related party loan, goodwill) still apply until FY25 report.

📌 Conclusion: Inflection Confirmed, Trajectory Upward

BetMakers is now showing sustained operational progress, driven by:

Strategic product launches (Apollo, GTX)
Margin discipline and cost base reset
Market validation through usage metrics and partner traction

OVERALL FINAL COMMENTS

While the business still carries legacy balance sheet concerns and remains reliant on technology execution, this update reinforces the narrative that BetMakers has exited erosion phase and is now in early-stage recovery with tangible commercial traction.

FY25 results will be pivotal to confirm full-year positive cash flow and profitability trend, but based on current performance, the risk profile is improving.

Deep Dive: BetMakers Technology ASX:BET - 12 month, daily price chart with 3 EMA and volume indicators

Update 23/5/25 – Ord Minnett Research Report

Here is a released today from Ord Minnett in response to the latest update from BetMakers.

bet-update-ordminnett-23052025

Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.