In a mixed Q2, Ontario-based sports betting and igaming operator Northstar Gaming reported continuing losses despite record revenue results.
Northstar reported growth in revenue, handle and gross margin in Q2. This comes in the wake of the company’s reverse takeover of the business by Canadian property business Baden Resources.
The business said this was driven by customer increases and an uptick in wagering activity. Despite this, the losses only widened a small amount from the period last year at $4.8m.
Chief executive and chairman Michael Moskowitz highlighted the role played by integrated editorial content on its gaming platforms in powering the rise in revenue.
He said the Company Insights content is “proving to be increasingly popular with customers looking for insights to improve their betting experience”.
“As the business scales, we are delivering improved financial performance through operating leverage with revenue growth expected to continue to outpace expenses.”
Moskowitz also highlighted how recent M&A activity would work to support the company in its future growth.
“We expect the marketing and product initiatives we have under way to continue to drive growth throughout the remainder of this year and into 2024,” he added.
“The Slapshot Media acquisition we completed in the second quarter was a very important milestone in our goal of expanding the NorthStar Bets brand outside of Ontario starting in the fall and further leveraging our existing infrastructure and content.”
High costs push Northstar into the red in Q2
Northstar recorded CA$4.6m in the three-month period ending 30 June, compared to the CA$527,000 the business reported in the same period the previous year. The business’ revenue resulted from a $160.1m handle.
Despite the reported revenue growth, the business’ costs were also high and ate into any potential profits.
While the company’s marketing costs fell to CA$2.6m, down from CA$4.6m the previous year, the company saw a resulting increase in its general and administrative costs.
These more than doubled to CA$3.8m from the CA$1.3m reported in the same period the previous year.
Overall costs rose 17% to 6.4m compared to the CA$5.5m reported in Q2 2022.
This led to the company’s loss falling slightly from the previous year to CA$4.8m from CA$5.6m.
Trend continues on six-month basis
For the six-month period, the business reported CA$8.3m in revenue. In this time Northstar’s costs were pushed up by the CA$2.8m listing costs to CA$16.2m.
This led to a loss of $13.5m for the six months ending 30 June. Due to the losses, it paid no taxes on either a three-month or six-month basis.
Northstar announces CA$10m in new financing
Today, Northstar also announced CA$10m in new financing. This financing – which is due to close in September – will be funded through the issuing of shares and the entering into a new debt agreement.
