Home > Finance > Quarterly results > NorthStar reduces Q1 net loss as revenue climbs 63.9%

NorthStar reduces Q1 net loss as revenue climbs 63.9%

| By Robert Fletcher
NorthStar Gaming has reported a reduced net loss for Q1 of 2024 on the back of an increase in revenue and lower spending, while the operator has also appointed Chin Dhushenthen as chief financial officer on a full-time basis.
NorthStar Q1

Revenue in the three months to 31 March hit CA$5.9m (£3.4m/€4.0m/US$4.3m). This is 63.9% up from the $3.5m reported by NorthStar in Q1 of the previous year. 

Incidentally, Q1 of last year saw NorthStar Gaming complete the reverse takeover of Baden Resources. Baden, which owns Canadian property business Midway Property, combined with NorthStar Gaming Inc and a wholly owned subsidiary of Baden.

The takeover, coupled with other factors, helped push revenue up year-on-year in Q1 this year. Another is NorthStar extending to all provinces and territories in Canada in October 2023, having only previously been remained accessible in Ontario.

Other developments flagged by NorthStar include “notable” improvements across its key performance indicators. These include a 42.0% increase in active players, a 9.0% drop in cost per acquisition of a customer (CPA) and a 54.0% rise in estimated 12-month player values.

Add in the recently renewed strategic marketing agreement with Playtech Software, which will contribute services valued at up to $4.0m to October 2024, and CEO and chair Michael Moskowitz said this places NorthStar in a solid position for further growth.

“In Q1 we continued our pattern of strong year-over-year growth, highlighted by record total wagers,” Moskowitz said. “Our premium customer experience and growing brand awareness are propelling higher player retention, strengthened loyalty and increased player values. 

“These positive trends enable us to spend our marketing dollars more efficiently. This then contributes to improved operating leverage as the business scales.”

Record wagers drive revenue up in Q1

Taking a closer look at the Q1 figures, $5.8m of all revenue came from gaming activities, up 61.1%. Gaming revenue is drawn from both sports betting and casino.

The remaining $159,327 came from managed services within the Slapshot Media business that was acquired in 2023. As the deal did not complete until after Q1 last year, there are no year-on-year comparable figures.

NorthStar also said revenue benefitted from the expansion of its brand across all regions in Canada. Wagers reached a record high, with total spend on Northstarbets.ca climbing 55.5% to $218.0m.

Turning to spending, revenue costs increased 83.3% to $2.2m, with operator participant and service providers fees increasing. However, operating expenses were down 21.4% to $7.7m, with last year’s spend including $2.8m worth of listing associated with the TSX Venture Exchange public listing.

Financial costs hit $976,710, meaning pre-tax loss amounted to $6.5m, down 25.3% in 2023. NorthStar did not pay tax either this year or last, meaning comprehensive net loss also stood at $6.5m.

“Our team is making regular improvements to our service offering, such as the recent launch of a VIP Elite strategy aimed at the most active players who drive a meaningful share of our results,” Moskowitz said.

“We have some exciting demand creation activities planned for the coming months along with further innovations to our platform and content. We remain focused on unlocking value for our stakeholders and are excited about the opportunities ahead of us in 2024.”

NorthStar welcomes Dhushenthen as permanent CFO

In other news, NorthStar has announced that interim CFO Dhushenthen will now take on the role full time.

Dhushenthen has served as interim CFO since November following the departure of Jennifer Barber. He was previously vice-president of finance and compliance at the operator. 

Prior to NorthStar, Dhushenthen spent 13 years in financial leadership roles at CAPREIT, a Canadian provider of quality rental housing.

“Chin has demonstrated strong leadership of the finance team and excellent knowledge of our compliance and financial reporting systems,” Moskowitz said. “I look forward to his continued contributions.”

Subscribe to the iGaming newsletter