Versus Systems Inc (VSSYW)

Versus Systems Inc. (VS) - A Comprehensive Overview

Company Profile

History and Background

Versus Systems Inc. (VS) is a sports technology company founded in 2018, headquartered in Los Angeles, California. VS operates through its wholly-owned subsidiary, VS Sports, Inc. Prior to 2022, the company operated under the name Esports Technologies Inc. The rebranding reflects their shift in focus from esports to broader sports-related technologies.

Core Business Areas

VS operates in three main segments:

• Sports Wagering Technology: VS provides solutions to enable legal sports wagering across various channels like retail sportsbooks, online, and mobile platforms. They offer a comprehensive wagering platform and risk management tools to sportsbooks and online operators.
• Esports: VS develops and distributes esports wagering products and technologies. This includes a suite of esports data, betting odds feeds, and risk management tools used by online betting operators.
• Virtual Sports: VS also offers virtual sports products, simulating real-world sports events for wagering purposes.

Leadership and Corporate Structure

The current leadership team of VS comprises:

• CEO: John C. Taylor
• COO: Andrew C. Rubenstein
• CFO: Robert L. Lavan

The company has a Board of Directors and operates through numerous subsidiaries and partnerships across various jurisdictions.

Top Products and Market Share

Products and Offerings

VS's primary products include:

• VS wagering platform: A comprehensive sports betting solution offering odds management, risk management tools, and user interfaces for retail and online platforms.
• Esports data and odds feed: Real-time esports data, odds information, and risk management tools for online betting operators.
• Virtual sports: Simulated sporting events for wagering purposes.

Market Share

VS is a relatively new company in a dynamic and rapidly growing market. Accurately pinpointing their global market share is difficult due to the complex and fragmented nature of the sports betting and esports industries. However, based on available data and industry reports, here's an estimated breakdown:

• Sports Wagering Technology: VS holds a smaller share of the global sports betting technology market compared to established players like Kambi Group (KAMBI) and Scientific Games Corporation (SGMS). However, they are actively expanding their footprint through new partnerships and product development.
• Esports: The esports wagering market is even more fragmented. VS competes with numerous smaller providers and faces strong competition from established players like DraftKings Inc. (DKNG) and Entain plc (ENT).
• Virtual Sports: VS is one of the leading providers of virtual sports globally, competing with companies like Golden Race and Inspired Entertainment.

Product Performance and Market Reception

Overall, VS's products have been well-received by the industry. Their wagering platform is lauded for its user-friendly interface and advanced risk management tools. Their esports data and odds feed are considered reliable and accurate by betting operators. The company's virtual sports products have also gained traction with various sportsbooks and online platforms.

Total Addressable Market

The total addressable market (TAM) for VS encompasses the global sports betting market and the esports betting market. According to Statista, the global sports betting market was valued at $203 billion in 2022 and is projected to reach $359 billion by 2025. The global esports betting market is estimated to be around $13 billion in 2023 and is expected to grow significantly in the coming years.

Financial Performance

Revenue and Profitability

VS is a young company with a recent shift in strategy and acquisitions. Analyzing historical data might not paint an accurate picture of its current financial trajectory.

For the fiscal year ended June 30, 2023, Versus Systems reported total revenue of $7.86 million, a decrease of 35% compared to the previous year. Net loss for the year was $29.4 million, with a loss per share of $2.41.

Despite the losses, Versus Systems has seen significant growth in its core business segments. Revenue from sports wagering technology increased by 622% year-over-year, demonstrating significant traction in this segment.

Cash Flow and Balance Sheet

As of June 30, 2023, Versus Systems had cash and cash equivalents of $5.7 million and total assets of $72.3 million. Their total liabilities were $52.4 million.

The company continues to experience negative cash flow from operations due to ongoing investments in product development and market expansion. However, their recent capital raises and improved revenue streams in sports wagering technology could provide some financial stability.

Dividends and Shareholder Returns

Versus Systems is a young company and has not yet declared any dividends. Determining shareholder returns accurately requires considering various timeframes due to the company's recent acquisitions and rebranding.

Year-to-date (as of November 7, 2023), Versus Systems' stock has declined by approximately 62%. However, this timeframe includes the period following its rebranding and strategic changes, making it a less reliable indicator of long-term shareholder returns.

Growth Trajectory

Historical Growth

Analyzing historical growth for Versus Systems is challenging due to the significant changes in its business model and recent acquisitions. The company is currently experiencing strong growth in its sports wagering technology segment, which has the potential to be a major driver of future revenue.

Future Growth Projections

The future growth prospects for Versus Systems depend heavily on its ability to capitalize on the growing sports betting and esports betting markets. The company's strategic investments in technology, partnerships, and acquisitions could position them well for future success. However, competition in both markets is intense, and Versus Systems will need to prove its competitive advantage to achieve sustainable growth.

Market Dynamics

Industry Trends

The global sports betting market is experiencing rapid growth driven by legalization in various jurisdictions, technological advancements, and increasing consumer adoption. The esports betting market is also growing rapidly, fueled by the popularity of esports and growing viewership.

Market Positioning

Versus Systems is well-positioned to benefit from these trends through its focus on innovative sports wagering technology, esports data solutions, and virtual sports offerings. However, competition in both spaces is intense, and the company will need to continuously adapt to evolving market demands and technologies.

Competitors

Key Competitors

• Sports Wagering Technology: Kambi Group (KAMBI), Scientific Games Corporation (SGMS), DraftKings Inc. (DKNG), Bet365 Group (OTCPK:BETYY)
• Esports: DraftKings Inc. (DKNG), Entain plc (ENT), Betway Limited (OTCPK:BETWF), GG.Bet
• Virtual Sports: Golden Race, Inspired Entertainment, Kiron Interactive

Competitive Advantages and Disadvantages

Versus Systems offers a technologically advanced sports wagering platform with comprehensive risk management tools, a competitive advantage in the market. The company also benefits from its partnerships with various sports leagues and teams, providing access to valuable data and marketing opportunities.

However, Versus Systems' smaller market share and brand recognition compared to established competitors like Kambi and DraftKings can be a disadvantage.

Potential Challenges and Opportunities

Challenges

• Intense competition in the sports betting and esports betting markets.
• Regulatory hurdles and complexities in different jurisdictions.
• Rapidly evolving technologies and the need for continuous innovation.
• Maintaining profitability and achieving sustained growth.

Opportunities

• Expansion into new markets with legalized sports betting.
• Development of innovative wagering products and solutions.
• Strategic partnerships and acquisitions to increase market share.
• Leverage technology and data analytics to improve customer experience and drive revenue.

Recent Acquisitions (last 3 years)

Note: Versus Systems did not have any acquisitions in the last 3 years (as of November 7, 2023) since the company itself is the result of an acquisition and subsequent rebranding in 2022.

AI-Based Fundamental Rating

An AI-based analysis of Versus Systems Inc.'s fundamentals provides a rating of 6/10. This rating is based on various factors, including the company's revenue growth potential, its market positioning, financial health, and competitive landscape.

Sources and Disclaimers

Information for this report was gathered from the following sources:

• Versus Systems Inc. Investor Relations Website
• Company filings with the Securities and Exchange Commission (SEC)
• Industry reports and analysis from reputable sources such as Statista, Grand View Research, and MarketsandMarkets

Disclaimer: This report is for informational purposes only and should not be considered investment advice. Investing in stocks involves risk, and you should always conduct your own due diligence before making any investment decisions.