Earnings call transcript: Better Ltd Q3 2025 highlights merger and growth

Better Limited (Market cap: $119M) reported strong financial performance in the third quarter of 2025, emphasizing its strategic initiatives and market positioning. The company announced significant milestones, including a proposed merger with PointsBet and a robust financial outlook, aiming to capture a larger share of the Australian wagering market. According to InvestingPro data, the company has demonstrated impressive revenue growth of 76.5% over the last twelve months.

Key Takeaways

• Better Limited reported strong operating momentum with over 152,000 active cash customers.
• The company generated more than 3 million USD in operating cash flow.
• A proposed merger with PointsBet is expected to create annual synergies exceeding 40 million USD.
• Better secured a 120 million USD debt facility from National Australia Bank and plans a 130 million USD equity raising.
• The company aims for a 10% market share in the Australian wagering market.

Company Performance

Better Limited’s third-quarter results reflect strong operational momentum, with a significant increase in active cash customers and robust cash flow generation. The completion of the migration of TopSport customers post-quarter end further strengthens its market position. The company’s strategic initiatives, including the proposed merger with PointsBet, are expected to enhance its competitive edge in the consolidating Australian wagering market.

Financial Highlights

• Operating cash flow: Over 3 million USD
• Active cash customers: More than 152,000
• Proposed annual synergies from merger: Over 40 million USD

Outlook & Guidance

Better Limited’s forward-looking strategy includes targeting over 40 million USD in annual synergies from the merger with PointsBet. The company plans to deleverage to under 1x net debt/EBITDA within the first year post-merger, continuing to pursue both organic and inorganic growth strategies. While current EBITDA stands at -$9.32M, InvestingPro analysts forecast the company to return to profitability this year. Get detailed insights and access to the comprehensive Pro Research Report, available for Better Limited and 1,400+ other stocks on InvestingPro.

Executive Commentary

• Matt, an executive, stated, "We do believe there are further M&A opportunities in this market."
• Andrew, another executive, emphasized, "We’re not looking at a slash and burn. We’re not trying to get a synergy number that is going to preclude growth."
• Matt also highlighted, "We’ll be data led as we are in everything that we do."

Risks and Challenges

• Market consolidation may intensify competition, posing challenges for growth.
• Integration risks associated with the PointsBet merger could impact projected synergies.
• Economic uncertainties and regulatory changes in the wagering industry could affect operations.

Better Limited’s strategic focus on mergers and acquisitions, coupled with its strong financial performance, positions it well for future growth in the dynamic Australian wagering market.

Full transcript - betr Entertainment Ltd (BBT) Q3 2025:

Matt, Executive (likely CEO), Better: Cost synergies, in addition to the $26,000,000 of synergies already realized through the Bluebet and Topsport transactions. We are highly confident that our proposal offers superior value for both Better and PointsBet shareholders. It is highly accretive for the Better shareholders, and the innovative mix and match structure offers PointsBet shareholders flexibility, access to synergies, growth, and future market consolidation. Today, we’ll detail the $260,000,000 of cash funding we have secured, comprising of a credit approved term sheet for $120,000,000 of debt from the National Australia Bank on favorable terms, a fully underwritten equity raising of $130,000,000 and a $45,000,000 non binding proposal for the sale of PointsBet Canada to realize the value of that business, while increasing our laser focus on success here in Australia. As we announced last night, we are now the largest shareholder in PointsBet with a 19.9% relevant interest acquired from PointsBet’s largest shareholders and intend to vote that stake against the current MiXi proposal.

In summary, there is strong and accelerating momentum in our Better Business. We have outlined a compelling vision for a combination with PointsBet, and we believe Better is the right team with the right M and A experience and repeatable integration model to deliver value from this transaction. All of the concerns outlined by the PointsBet Board about our bid are fully addressed, and we’re ready to go and we’ll throw everything at making this combination a great success. I’ll now hand over to Andrew to talk through the proposal in more detail.

Andrew, Executive (likely CFO), Better: Thanks, Matt, and good morning, everybody. Returning to Slide eight of the presentation, which shows that our revised proposal confirms a single offer price of $360,000,000 which is the top of the range we outlined in our previous correspondence to PointsBet. We’ve enhanced the certainty of the $260,000,000 cash component, as you can see on the slide, through a credit approved term sheet from National Australia Bank for 120,000,000 of acquisition debt funding, a nonbinding proposal to realize the value of PointsBet Canada, and a fully underwritten equity raise of $130,000,000 The funding of this transaction has been carefully constructed to maximize certainty and ultimately drive returns for shareholders where we realize the value in the combined business. Further information about each funding stream is available in the full presentation. As Matt said, as Pointsworth’s largest shareholder, we intend to vote our holding against the current MiXi proposal, which we consider lays significant value on the table.

Turning to Slide nine, which demonstrates how Better’s proposal for PointsBet is superior to the current MiXi proposal, both in terms of value and its ability to be actioned. The revised proposal confirms a single offer price of $360,000,000 and a reduced due diligence period of only fifteen days. On Slide 10, the Better proposal offers greater flexibility for PointsBet shareholders, giving them the ability to elect their preferred combination of cash and Better shares, and with the combined business to remain ASX listed, represents the only listed pure play digital wagering operator in the attractive Australian market. As is demonstrated on Slide 10, Beta’s proposal is superior to the MiXi proposal, whether shareholders elect to receive cash, scrip or a combination of the two. Moving ahead to Slide 15.

You can see that Better has become PointsBet’s largest shareholder, having acquired a relevant interest in nineteen point nine percent of the company at approximately $1.1 per share. This reflects our strong commitment and unwavering confidence in this opportunity. As we’ve said, we intend to vote against the current MiXi proposal, which materially decreases its actionability, and our ongoing engagement with other key shareholders of PointsBet indicates that there is strong support for Better’s superior proposal. On Slide 17, critically, we detail the compelling synergy prize which is on offer in this combination. By moving to a single brand app and technology platform, we expect to deliver cost synergies of over $40,000,000 annually, together with a deeper investment in brand, product and customer intelligence, which will drive sustainable and profitable growth.

Matt and the rest of our team have a tried and tested playbook for doing this, which has been demonstrated by the $26,000,000 of combined synergies that we’ve successfully already realized from the recent Bluebet and TopSport transactions. The synergies in the PointsBet transaction have already been outside invalidated by an independent Big four accounting firm. Slide 20 shows why we have such conviction in this synergy opportunity, with the Better team’s track record of swift decision making and rapid execution already having realized that synergy pool of £26,000,000 in the Bluebet and Topsport transactions. The proposed combination with PointsBet offers a materially larger scale and a materially larger synergy price. I’ll now hand back to Matt to run you through the equity raising.

Matt, Executive (likely CEO), Better: Thanks, Andrew. And turning to Slide 23. As mentioned earlier today, we are launching a fully underwritten $130,000,000 equity raising as part of the funding for our proposal, the components of which are listed on your screen. We are very pleased with the support from investors with new shares under the offering representing a premium of 6.7% to Beta’s last closing price and a 13.7% premium to the ten day VWAP. We see the strong institutional demand as an endorsement for Beta’s strategy of pursuing profitable growth via organic and inorganic means and the attractive opportunity that remains as the Australian wagering market continues to consolidate.

Moving to Slide 25, it shows the timetable for the equity raise with a retail entitlement offer to open at 9AM on Tuesday, May, and close at 5PM on Tuesday, May, with new shares issued under the retail entitlement offer to commence trading on Wednesday, May. I’ll now hand back to Andrew to run you through our Q3 results.

Andrew, Executive (likely CFO), Better: Turning now to Slide 27. While the PointsBet proposal represents an exciting opportunity for Better shareholders, the core Better business continues to experience strong and accelerating operating momentum, which is delivering continued improvement in our key operating metrics, as you can see on the screen. Post the migration of Better customers onto the platform, we are now a much larger business, with more than 152,000 cash active customers in the quarter, and with the ongoing strategic reactivation of the Beta database, maintaining robust net win margins that enabled us to deliver north of $3,000,000 of operating cash flow during the quarter. Importantly, we successfully completed the migration of top sports customers after the period end and with activity from those customers to be included in our Q4 numbers. Overall, we’re extremely happy with the performance of the business during the quarter and excited as we look ahead.

Matt will now wrap up before we turn to Q and A.

Matt, Executive (likely CEO), Better: Thanks, Andrew. And before opening to questions, I would just like to reiterate that we are highly confident that our proposal will provide superior value to Better and PointsBet shareholders, creating a leader in the Australian wagering market and leveraging the unrivaled sector experience and demonstrated M and A capability of the Better team. Myself, Andrew and the Better Board are excited by the potential of a combination between Better and PointsBet. And having fully addressed the concerns previously raised by the PointsBet Board, we encourage shareholders to support Better’s superior proposal. We’ll now open the lines for questions.

Conference Operator: Thank Your Your first question comes from Andrew Auerbach from Taylor Collison. Yes.

Andy, Analyst, Taylor Collison: Matt and Andrew, fair bit to digest here. Just on the potential sale of the Canadian business to Hard Rock, Just interested in what’s included there. Is it the platform to iGaming, as in would Beta retain iGaming capabilities?

Andrew, Executive (likely CFO), Better: Hi, Andy. Good to hear from you. Yeah. In terms of Canada, we obviously have a a nonbinding indication from Hardrock as to their willingness to purchase the Canadian business, interested primarily in the customer base, and we would be retaining the PointsBet technology in such a transaction with the opportunity to continue to redeploy that throughout North America. So retaining value there whilst ensuring that we’re divesting of the operating costs associated with the PointsVet Canada business.

Andy, Analyst, Taylor Collison: Terrific. That’s good news. Alright. And just one other follow-up on. If the transaction is successful, it’s going to get better at a roughly 10% market share domestically.

That’s a figure you’ve sort of quoted quite a bit in terms of being a critical number. Just your thoughts on whether that’s sufficient moving forward and whether there’s further plans to bolster that percentage up given the consolidation that’s expected in this mid tier continuation? Andy,

Matt, Executive (likely CEO), Better: Matt here. We do believe there are further M and A opportunities in this market. We do think, though, that getting to 10% allows us to grow profitably at scale. And so whilst we have a very strong organic growth strategy, the inorganic we’ve made no secret of the inorganic story and and the fact that we’ll continue to pursue further M and A.

Andy, Analyst, Taylor Collison: Wonderful. All right. I’ll jump back in the queue. Thanks.

Conference Operator: Thank you. Your next question comes from Leo Partridge from Morgan. Please go ahead.

Leo, Analyst, Morgan: Just on synergies and potential upside from that, you’ve outlined $40,000,000 synergies there, which is a sizable number. Can you speak to any areas which you see potential upside beyond that number based on your experience with the previous transaction?

Andrew, Executive (likely CFO), Better: Thanks, Leo. Thanks for your question. Look, the the synergy prize on offer here is really material and a number well north of $40,000,000, we think is highly attractive. Obviously, these are outside in, diligence at the moment. Working with the PointsBet team, hopefully, in a due diligence period would allow us to to firm up some of these numbers, and I do believe that there’s potential for upsizing in in a number of the buckets.

What’s really important about a synergy play here, though, is that we’re not looking at a slash and burn. We’re not trying to get a synergy number that is going to preclude growth, and it’s really important that once once we’ve realized these synergies and and and to the earlier point, getting to that 10% market share, that we’re investing for that continued growth from that position and positioning the business to grow faster than the market. So there’s always a trade off, I think, between grabbing the synergies and making sure that you’re set up for success in the future. But certainly, to your point, once we’ve diligence this, we’ll be able to firm up our exact exact synergy estimate.

Leo, Analyst, Morgan: Thanks. And one more if I may. Just on the funding and balance sheet position. So following the capital raise, and funding commitments, how comfortable are you with the balance sheet position post acquisition, especially in terms of, you know, providing flexibility and marketing investment support growth?

Andrew, Executive (likely CFO), Better: Yeah. Absolutely. The the funding pool that we’ve been able to put together allows us not only to complete on the transaction, but also to invest for growth, invest during that key customer migration period that we always speak of, and our experience in integrating these businesses and undertaking customer migrations dictates that you do need to have some cash on hand to be able to do that. As you can see, despite the business taking on some debt, there’s a very strong deleveraging profile here, and we’re very confident that the operating cash flows of of the business after that full first year of ownership get us well under one times net debt EBITDA and put us in a really strong position to grow the business and invest going forward.

Andy, Analyst, Taylor Collison: Perfect. Thanks, Andrew.

Conference Operator: Thank you. Your next question comes from Phil Chippendale from Ords. Please go ahead.

Phil, Analyst, Ords: Hi, guys. Thanks for your time. Just a couple of questions. Firstly, just on the debt facility. Andrew, can you just talk to maybe the terms around especially just on the pricing side of things?

Know it’s with NAB, so I mentioned the pricing is reasonably competitive, but, yeah, maybe you could just give us a little bit more detail on that, please.

Andrew, Executive (likely CFO), Better: Yeah. Of course. We’re very pleased to be able to put together what we’ve what we’ve received from NAB, a credit approved term sheet for a hundred and $20,000,000 of debt. Importantly of that, and I think underlying, NAB’s commitment to to to working with us to try and get this, deal done is the $35,000,000 facility that’s already been advanced to support, the current pre bid stake that we’ve built in the business. We see these terms as as, very, commercial, and in line with what Big Four financing would be expected.

You can see the interest rate that we’ve published there at BBSY plus 4% and covenants in line with what you’d expect from a Big Four lender. So we’re very comfortable with the interest covenant obligations that will be on the business. And as I said before to Leo’s question, really important that we’re deleveraging quickly as we’re generating that operating cash flow post the migration.

Phil, Analyst, Ords: Yep. Understood. Thank you. And just my final question is just one for Matt. You know, imagine you put this revised offer to the Consulate Board.

Can you just talk to, you know, any response or discussion that you’ve had with them to this point?

Matt, Executive (likely CEO), Better: We it’s only just gone to them, Phil, so we we haven’t had any engagement as yet, but we’re hoping to have some engagement later today. There’ll be some calls made and and hopefully some positive outcomes off the back of that.

Phil, Analyst, Ords: Okay. Thanks. I’ll jump back in the queue.

Conference Operator: Thank you. Your next question comes from Andrew Auerbach from Taylor Colson. Please go ahead.

Andy, Analyst, Taylor Collison: Thanks again. Just a couple more follow-up ones. One, just can you talk to us please on the combined platform as it might look with the points that are and any advantages that that might provide, please?

Andrew, Executive (likely CFO), Better: Yeah, absolutely, Andy. You know, we are blessed with the fact that there there are wonderful technologists in in both businesses, and the technology platform by PointsBet and Better is actually built off the same code base, the TBS code base, and therefore familiar to us, and and our platform is familiar to the to the PointsBet team. So we’ll we’ll look to go and confirm in in due diligence where those technology platforms are sitting and make some decisions around that. But but, hopefully, we see that there are components of each that would make the whole go faster. And so whilst we’re looking at a technology platform rationalization, we see that there are bits and bits and pieces from from each of the the team’s brilliant work over an an incredibly long period of time that are gonna make the business go faster.

So we’re really excited about the opportunity to to provide a a more scalable, reliable platform and faster product development together than either businesses currently by itself.

Andy, Analyst, Taylor Collison: Excellent. Alright. And and one final one from me. Just on on slide 17 of the deck, it says it relates to moving to a single brand and app. Any I know it’s early, and it’s probably a little cheeky.

Any sort of early indications of of which brand or or what brand you’re gonna go with, please?

Matt, Executive (likely CEO), Better: Not as yet, Andy. We’ll be we’ll be data led as we are in everything that we do. So we’ll run focus groups. We’ll do some analysis. We’re not wedded to any brand either way, but we’ll be we’ll be guided by what we hear over the course of the coming weeks, and we’ll action that pretty quickly.

As long as we position the brand in what we want to stand for as opposed to what the brand actually is itself, we think it’ll be fine.

Andy, Analyst, Taylor Collison: Okay, great. Thank you very much.

Conference Operator: Thank you. There are no further questions at this time. I’ll now hand the conference back for closing remarks.

Matt, Executive (likely CEO), Better: Well, thank you, everyone, for joining us. We hope you’re as excited as we are about this opportunity. We look forward to keeping you abreast as we progress through conversations with PointsBet. Thank you for your time today, and again, apologies for the delay. Thank you.

Thanks.

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