Why did SBT's Q4 earnings fall short of forecasts?

SharpLink Gaming's (SBT) Q4 earnings fell short of forecasts due to several key factors:

1. **Revenue Decline**: SBT experienced a 26.1% decline in total revenues, falling from $4,952,725 in 2023 to $3,662,349 in 2024. This reduction in revenue was primarily attributed to softer market conditions and the loss of certain customers.
2. **Cost Management**: Despite the revenue decline, SBT significantly reduced its total operating expenses by 45.6%, dropping from $10,425,865 in 2023 to $5,669,248 in 2024. This cost management effort contributed to the company's improved financial performance, including a net income of $10,099,619 and a net income per share of $2.29.
3. **Gross Profit Impact**: The company's gross profit decreased by 40.9% to $0.91 million in 2024, compared to the previous year's $1.52 million. This decline was influenced by higher casino payouts resulting from large winnings, which directly impacted the gross profit margin.
4. **Discontinued Operations**: SBT's discontinued operations showed a substantial improvement, with a net income from discontinued operations, net of tax, totaling $14,573,262 in 2024, a significant increase from the previous year's net loss of $14,243,182. This turnaround was largely due to the strategic sale of its Sports Gaming Client Services and SHGN businesses to RSports Interactive in January 2024.

In summary, while SBT faced challenges such as revenue decline and gross profit impact, the company's cost management efforts and the positive outcomes from discontinued operations contributed to its improved financial performance.