Betr’s Q2 FY26: $13.2m EBITDA Loss, $41m Cash, Eyes $19m FY27 Earnings
Betr Entertainment Limited reported a robust 25% headline turnover growth in Q2 FY26 despite a $13.2 million EBITDA loss in H1 due to customer-friendly racing outcomes and strategic investments. The company targets a positive EBITDA turnaround in H2 FY26 and FY27, supported by organic growth, Sky Racing integration, and a new share buyback program.
- 25% headline turnover growth outpacing market by 4x
- H1 FY26 EBITDA loss of $13.2 million driven by favourable racing results and strategic investments
- Targeting H2 FY26 EBITDA of $5m–$8m and FY27 EBITDA of $13m–$19m
- On-market share buyback announced for up to 10% of issued capital
- Strong cash position of $41 million with ongoing marketing and technology investments
Robust Growth Amid Strategic Investment
Betr Entertainment Limited has delivered a headline turnover growth of 25% in the second quarter of fiscal year 2026, significantly outpacing the broader market by approximately four times. This growth reflects the company’s successful strategic investments in brand and product development, which are expected to accelerate returns in the second half of the year.
Despite this strong top-line performance, Betr reported an EBITDA loss of $13.2 million in the first half, primarily due to customer-friendly racing results during the Spring Racing Carnival and elevated marketing and promotional costs. These outcomes, while temporarily impacting profitability, are part of a deliberate strategy to build long-term customer loyalty and market share.
Customer-Friendly Results and Market Dynamics
The Spring Racing Carnival saw an unusually high concentration of bets on favourites, with six of the eight highest-backed runners winning, compared to just two in the previous year. This led to lower operator margins and increased promotional expenses, resulting in an estimated $7 million reduction in EBITDA for the half-year period.
However, the company notes that racing results have since normalised, with net win margins returning to historical trends by the end of Q2 and into January trading. This normalisation is expected to underpin improved financial performance in the coming quarters.
Strategic Initiatives and Technology Integration
Betr has accelerated technology development, including the deployment of Sky Racing, a key product enhancement that addresses a major gap for Tier 1 operators. Launched ahead of the Spring Carnival, Sky Racing has driven increased wagering activity and is expected to contribute positively to EBITDA as integration costs stabilise.
The company also launched a high-impact brand relaunch and secured marquee sports advertising partnerships, including a record Ashes audience via Fox Cricket. These initiatives have boosted brand awareness, customer acquisition, and engagement metrics, with active customers growing 5.7% quarter-on-quarter and customer stickiness improving by 22% year-on-year.
Financial Position and Capital Management
At quarter-end, Betr held a strong cash balance of $41 million, despite net cash outflows of $9.7 million from operating activities driven by elevated marketing spend and customer-favourable outcomes. Investing activities included payments related to the PointsBet share buy-back and platform development.
Reflecting confidence in the company’s intrinsic value, Betr announced an on-market share buyback program for up to 10% of issued capital. The buyback is designed to optimise capital allocation without compromising the company’s capacity to pursue growth and M&A opportunities.
Outlook and Growth Prospects
Betr is targeting a positive EBITDA range of $5 million to $8 million in the second half of FY26 and $13 million to $19 million in FY27, assuming normalised net win margins and no significant regulatory changes. The company plans to leverage its H1 investments, ongoing organic growth, and strategic M&A to drive profitability at scale.
Further, Betr aims to monetise recent investments in AI, data analytics, and customer relationship management to enhance pricing, personalisation, and risk management, thereby improving margins and customer value.
Bottom Line?
Betr’s strategic investments and market share gains set the stage for a profitable turnaround, but execution and market conditions will be key in FY27.
Questions in the middle?
- How will Betr manage margin volatility from unpredictable racing outcomes going forward?
- What are the specifics and timing of the company’s planned M&A activities?
- How will the share buyback impact shareholder value and capital flexibility amid growth investments?
