NorthStar Gaming (BET) Q3 2024 earnings summary

Executive summary

• Operates a premium online betting platform in Canada, focusing on iGaming and media integration, with rapid growth and expanding market share, especially in Ontario and new markets outside the province.

• Achieved strong year-over-year growth in Q3 2024, with total wagers up 69% and gross margin up 63%.

• Strategic partnerships with Playtech and Torstar provide technology, investment, and media reach, supporting product innovation and customer acquisition.

• Differentiated by proprietary content, local customization, and a scalable, variable cost model that aligns incentives with partners.

• Gross margin now fully covers overhead costs, marking a milestone toward profitability.

Financial highlights

• Q3 2024 total wagers reached CAD 234 million, up 69% year-over-year, setting a new quarterly record and marking the fourth consecutive record quarter.

• Q3 2024 revenue was CAD 6.9 million, a 45% increase from Q3 2023; year-to-date revenue grew 55%, closely tracking total wagering growth.

• Gross margin in Q3 2024 was CAD 2.7 million, up 63% year-over-year; year-to-date gross margin rose 72% to CAD 8 million.

• Gross margin as a percentage of revenue expanded to 39% in Q3 and 40% year-to-date, reflecting strong operating leverage.

• Profit before marketing and other expenses was positive CAD 600,000 for the first nine months of 2024, compared to a loss of CAD 3 million in 2023.

Outlook and guidance

• Anticipates strong Q4 2024 due to seasonal trends and expects continued growth in 2025, driven by player value, marketing efficiency, and operational leverage.

• Management expects a strong Q4, typically a seasonally robust period, driven by recent marketing and product launches.

• Focus remains on year-over-year growth, with break-even and profitability expected as scale increases and marketing efficiency improves.

• Confident in accessing additional capital to support ongoing growth strategy, with updates expected soon.

• Expansion into Alberta and the rest of Canada is a key growth opportunity, with strategies to replicate Ontario's success while tailoring local marketing.