GigaMedia Announces First-Quarter 2021 Financial Results

 
 

GigaMedia Limited (NASDAQ: GIGM) today announced its first quarter 2021 unaudited financial results.

 

  Comments from Management  

 

For the first quarter of 2021, GigaMedia reported revenues of $1.45 million with a gross profit of $0.79 million , an operating loss of $0.90 million and the net loss of $0.88 million . Total revenues increased by 2.0% if compared to the previous quarter.

 

"Our business momentum has slowed since the fourth quarter 2020," said GigaMedia CEO James Huang , "but as we stick with our strategies of internally-driven growth and effective marketing, we managed to sustain growth in revenues and keep costs and expenses in check."

 

  First   Quarter   Overview  

 
  •   Operating revenue   s   increased slightly by 2.0%   in quarter-on-quarter comparison   , and decreased by 9.9% year-over-year. The slowdown was primarily due to declines in certain of our licensed mobile games, where the upgrades and supports from our Japanese and Korean licensors were severely hampered by the COVID-19 pandemic.  
  •  
  •   Loss from operations increased to $0.90 million from $0.61 million last quarter, and net loss to $0.88 million , from $0.34 million last quarter   .   The increases were mainly due to rises in certain general expenses.  
  •  

  Unaudited Consolidated Financial Results  

 

GigaMedia Limited is a diversified provider of digital entertainment services. GigaMedia's digital entertainment service business FunTown develops and operates a suite of digital entertainments in Taiwan and Hong Kong , with focus on mobile games and casual games. Unaudited consolidated results of GigaMedia are summarized in the table below.

 

  For the   First   Quarter  

 
 
                                                                                                                                                                                                           
 

   GIGAMEDIA 1Q21 UNAUDITED CONSOLIDATED FINANCIAL RESULTS   

 
 

   (unaudited, all figures in US$ thousands, except per share
amounts)
 
 

 
 
 

   1Q21   

 
 
 

   4Q20   

 
 
 

   Change   

 

   (%)   

 
 
 
 

   1Q21   

 
 
 

   1Q20   

 
 
 

   Change   

 

   (%)   

 
 
 

   Revenues   

 
 
 
 

  1,446  

 
 
 
 

  1,418  

 
 
 
 

  2.0  

 
 

  %  

 
 
 
 

  1,446  

 
 
 
 

  1,604  

 
 
 
 

  (9.9)  

 
 

  %  

 
 

   Gross Profit   

 
 
 
 

  791  

 
 
 
 

  818  

 
 
 
 

  (3.3)  

 
 

  %  

 
 
 
 

  791  

 
 
 
 

  927  

 
 
 
 

  (14.7)  

 
 

  %  

 
 

   Loss from Operations   

 
 
 
 

  (901)  

 
 
 
 

  (607)  

 
 
 

  NM  

 
 
 
 
 

  (901)  

 
 
 
 

  (640)  

 
 
 

  NM  

 
 
 

   Net Loss Attributable to GigaMedia   

 
 
 
 

  (875)  

 
 
 
 

  (340)  

 
 
 

  NM  

 
 
 
 
 

  (875)  

 
 
 
 

  (286)  

 
 
 

  NM  

 
 
 

   Loss Per Share Attributable to GigaMedia, Diluted   

 
 
 
 

  (0.08)  

 
 
 
 

  (0.03)  

 
 
 

  NM  

 
 
 
 
 

  (0.08)  

 
 
 
 

  (0.03)  

 
 
 

  NM  

 
 
 

   EBITDA   (A)  

 
 
 
 

  (949)  

 
 
 
 

  (411)  

 
 
 

  NM  

 
 
 
 
 

  (949)  

 
 
 
 

  (536)  

 
 
 

  NM  

 
 
 

   Cash   , Cash Equivalents   and   Restricted Cash   

 
 
 
 

  44,446  

 
 
 
 

  46,002  

 
 
 
 

  (3.4)  

 
 

  %  

 
 
 
 

  44,446  

 
 
 
 

  57,311  

 
 
 
 

  (22.4)  

 
 

  %  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  NM= Not Meaningful  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   (A) EBITDA (earnings before interest, taxes, depreciation, and amortization) is provided as a supplement to results provided in
accordance with U.S. generally accepted accounting principles ("GAAP"). (See, "Use of Non-GAAP Measures," for more details.)
 

 
 
 

  First   -Quarter Financial Results  

 
  •   Consolidated revenues for the first quarter of 2021 increased by 2.0% quarter-on-quarter to $1.45 million , from $1.42 million in the fourth quarter of 2020, and decreased by 9.9% year-over-year from $1.60 million in the first quarter of 2020. The slowdown was primarily due to declines in certain of our licensed mobile games, where the upgrades and supports from our Japanese and Korean licensors were severely hampered by the COVID-19 pandemic.
  •  
  •   Consolidated gross profit decreased to $0.79 million from $0.82 million in last quarter and decreased by 14.70% from $0.93 million in the same quarter last year.
  •  
  •   Consolidated operating expenses were $1.69 million in the first quarter of 2021, representing an increase by $0.27 million quarter-on-quarter, or an increase by $0.13 million from $1.57 million year-over-year. The increase was mainly due to rises in certain general expenses.
  •  
  •   Net loss for the first quarter of 2021 was $0.87 million , increased from a loss of $0.34 million in the fourth quarter of 2020, from a loss of $0.28 million in the same quarter last year.
  •  
  •   Cash   , cash equivalents and restricted cash at the first quarter-end of 2021 accounted for $44.45 million , which decreased by $1.56 million from the end of 2020.
  •  

  Financial Position  

 

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $44.45 million , or approximately $4.02 per share as of March 31, 2021 .

 

  Business Outlook  

 

  The following forward-looking statements reflect GigaMedia's expectations as of    May 3    , 20   21   . Given potential changes in economic conditions and consumer spending, the evolving nature of   digital entertainments   , and various other risk factors, including those discussed in the Company's   2020   Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.  

 

"The second quarter of 2021 is already expected to be tough," cautioned GigaMedia CEO James Huang , "but we will continue boosting productivities and enhancing services for our in-house developed casual games by introducing fast-paced playability and accelerating the development of our customer platform."

 

Meanwhile, our business strategies always include expanding through mergers and acquisitions. "Including the possible cooperation with Aeolus Robotics Corporation," said CEO James Huang , "we will keep pursuing investment opportunities that are with strategic potentials to expand our business and create greater shareholder value."

 

  Use of Non-GAAP Measures  

 

To supplement GigaMedia's consolidated financial statements presented in accordance with U.S. GAAP, the company uses the following measure defined as non-GAAP by the SEC: EBITDA. Management believes that EBITDA (earnings before interest, taxes, depreciation, and amortization) is a useful supplemental measure of performance because it excludes certain non-cash items such as depreciation and amortization and that EBITDA is a measure of performance used by some investors, equity analysts and others to make informed investment decisions. EBITDA is not a recognized earnings measure under GAAP and does not have a standardized meaning. Non-GAAP measures such as EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, other financial measures prepared in accordance with GAAP. A limitation of using EBITDA is that it does not include all items that impact the company's net income for the period. Reconciliations to the GAAP equivalents of the non-GAAP financial measures are provided on the attached unaudited financial statements.

 

  About the Numbers in This Release  

 

   Quarterly results   

 

All quarterly results referred to in the text, tables and attachments to this release are unaudited. The financial statements from which the financial results reported in this press release are derived have been prepared in accordance with U.S. GAAP, unless otherwise noted as "non-GAAP," and are presented in U.S. dollars.

 

  Q&A  

 

For Q&A regarding the first quarter 2021 performance upon the release, investors may send the questions via email to   IR@gigamedia.com.tw   , and the responses will be replied individually.

 

  About GigaMedia  

 

Headquartered in Taipei, Taiwan , GigaMedia Limited ( Singapore registration number: 199905474H) is a diversified provider of digital entertainment services. GigaMedia's digital entertainment service business develops and operates a suite of digital entertainments in Taiwan and Hong Kong , with focus on browser/mobile games and casual games. More information on GigaMedia can be obtained from www.gigamedia.com .

 

The statements included above and elsewhere in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding expected financial performance (as described without limitation in the "Business Outlook" section and in quotations from management in this press release) and GigaMedia's strategic and operational plans. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, including but not limited to, our ability to license, develop or acquire additional online games that are appealing to users, our ability to retain existing online game players and attract new players, and our ability to launch online games in a timely manner and pursuant to our anticipated schedule. Further information on risks or other factors that could cause results to differ is detailed in GigaMedia's Annual Report on Form 20-F filed in April 2021 and its other filings with the United States Securities and Exchange Commission.

 

(Tables to follow)

 
 
                                                                                                                                                                                                                                                                                                                                      
 

   GIGAMEDIA LIMITED   

 
 

   CONSOLIDATED STATEMENTS OF OPERATIONS   

 
 
 
 

   Three months ended   

 
 
 
 

   3/31/2021   

 
 
 

   12/31/2020   

 
 
 

   3/31/2020   

 
 
 
 

   unaudited   

 
 
 

   unaudited   

 
 
 

   unaudited   

 
 
 
 

   USD   

 
 
 

   USD   

 
 
 

   USD   

 
 

   Operating revenues   

 
 
 
 
 
 
 
 
 
 
 

  Digital entertainment service revenues  

 
 
 
 

  1,446,276  

 
 
 
 

  1,417,636  

 
 
 
 

  1,603,904  

 
 

  Other revenues  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 
 

  1,446,276  

 
 
 
 

  1,417,636  

 
 
 
 

  1,603,904  

 
 

   Operating costs   

 
 
 
 
 
 
 
 
 
 
 

  Cost of digital entertainment service revenues  

 
 
 
 

  655,757  

 
 
 
 

  599,458  

 
 
 
 

  677,194  

 
 

  Cost of other revenues  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 
 

  655,757  

 
 
 
 

  599,458  

 
 
 
 

  677,194  

 
 

   Gross profit   

 
 
 
 

  790,519  

 
 
 
 

  818,178  

 
 
 
 

  926,710  

 
 

   Operating expenses   

 
 
 
 
 
 
 
 
 
 
 

  Product development and engineering expenses  

 
 
 
 

  345,898  

 
 
 
 

  324,404  

 
 
 
 

  328,815  

 
 

  Selling and marketing expenses  

 
 
 
 

  397,033  

 
 
 
 

  466,093  

 
 
 
 

  410,475  

 
 

  General and administrative expenses  

 
 
 
 

  946,192  

 
 
 
 

  634,118  

 
 
 
 

  824,442  

 
 

  Other  

 
 
 
 

  2,599  

 
 
 
 

  163  

 
 
 
 

  2,984  

 
 
 
 
 

  1,691,722  

 
 
 
 

  1,424,778  

 
 
 
 

  1,566,716  

 
 

  Loss from operations  

 
 
 
 

  (901,203)  

 
 
 
 

  (606,600)  

 
 
 
 

  (640,006)  

 
 

   Non-operating income (expense)   

 
 
 
 
 
 
 
 
 
 
 

  Interest income  

 
 
 
 

  78,595  

 
 
 
 

  73,403  

 
 
 
 

  255,719  

 
 

  Foreign exchange (loss) gain - net  

 
 
 
 

  (49,357)  

 
 
 
 

  142,951  

 
 
 
 

  98,887  

 
 

  Other-net  

 
 
 
 

  (2,809)  

 
 
 
 

  50,256  

 
 
 
 

  (298)  

 
 
 
 
 

  26,429  

 
 
 
 

  266,610  

 
 
 
 

  354,308  

 
 

  Loss before income taxes  

 
 
 
 

  (874,774)  

 
 
 
 

  (339,990)  

 
 
 
 

  (285,698)  

 
 

  Income tax expense  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 

  Net loss attributable to shareholders of GigaMedia  

 
 
 
 

  (874,774)  

 
 
 
 

  (339,990)  

 
 
 
 

  (285,698)  

 
 

  Loss per share attributable to GigaMedia  

 
 
 
 
 
 
 
 
 
 
 

  Basic:  

 
 
 
 

  (0.08)  

 
 
 
 

  (0.03)  

 
 
 
 

  (0.03)  

 
 

  Diluted:  

 
 
 
 

  (0.08)  

 
 
 
 

  (0.03)  

 
 
 
 

  (0.03)  

 
 

  Weighted average shares outstanding:  

 
 
 
 
 
 
 
 
 
 
 

  Basic  

 
 
 
 

  11,052,235  

 
 
 
 

  11,052,235  

 
 
 
 

  11,052,235  

 
 

  Diluted  

 
 
 
 

  11,052,235  

 
 
 
 

  11,052,235  

 
 
 
 

  11,052,235  

 
 
 

 

 
 
                                                                                                                                                                                                                                                                                                               
 

   GIGAMEDIA LIMITED   

 
 

   CONSOLIDATED BALANCE SHEETS   

 
 
 
 

   3/31/2021   

 
 
 

   12/31/2020   

 
 
 

   3/31/2020   

 
 
 
 

   unaudited   

 
 
 

   audited   

 
 
 

   unaudited   

 
 
 
 

   USD   

 
 
 

   USD   

 
 
 

   USD   

 
 

   Assets   

 
 
 
 
 
 
 
 
 
 
 

  Current assets  

 
 
 
 
 
 
 
 
 
 
 

  Cash and cash equivalents  

 
 
 
 

  44,146,308  

 
 
 
 

  45,702,352  

 
 
 
 

  56,777,472  

 
 

  Accounts receivable - net  

 
 
 
 

  281,945  

 
 
 
 

  274,584  

 
 
 
 

  355,225  

 
 

  Prepaid expenses  

 
 
 
 

  393,587  

 
 
 
 

  87,728  

 
 
 
 

  276,010  

 
 

  Restricted cash  

 
 
 
 

  300,000  

 
 
 
 

  300,000  

 
 
 
 

  533,436  

 
 

  Other receivables  

 
 
 
 

  25,937  

 
 
 
 

  3,579  

 
 
 
 

  238,396  

 
 

  Other current assets  

 
 
 
 

  156,622  

 
 
 
 

  157,020  

 
 
 
 

  148,757  

 
 

  Total current assets  

 
 
 
 

  45,304,399  

 
 
 
 

  46,525,263  

 
 
 
 

  58,329,296  

 
 
 
 
 
 
 
 
 
 
 
 

  Marketable securities - noncurrent  

 
 
 
 

  10,000,000  

 
 
 
 

  10,000,000  

 
 
 
 

  

 
 

  Property, plant & equipment - net  

 
 
 
 

  38,860  

 
 
 
 

  21,852  

 
 
 
 

  8,117  

 
 

  Intangible assets - net  

 
 
 
 

  11,596  

 
 
 
 

  3,640  

 
 
 
 

  17,965  

 
 

  Prepaid licensing and royalty fees  

 
 
 
 

  108,878  

 
 
 
 

  130,718  

 
 
 
 

  210,530  

 
 

  Other assets  

 
 
 
 

  2,481,910  

 
 
 
 

  341,701  

 
 
 
 

  285,319  

 
 

  Total assets  

 
 
 
 

  57,945,643  

 
 
 
 

  57,023,174  

 
 
 
 

  58,851,227  

 
 
 
 
 
 
 
 
 
 
 
 

   Liabilities and equity   

 
 
 
 
 
 
 
 
 
 
 

  Short-term borrowings  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 

  Accounts payable  

 
 
 
 

  88,009  

 
 
 
 

  69,931  

 
 
 
 

  60,405  

 
 

  Accrued expenses  

 
 
 
 

  1,244,580  

 
 
 
 

  1,515,712  

 
 
 
 

  1,606,501  

 
 

  Unearned revenue  

 
 
 
 

  949,396  

 
 
 
 

  949,853  

 
 
 
 

  1,285,399  

 
 

  Other current liabilities  

 
 
 
 

  740,286  

 
 
 
 

  387,712  

 
 
 
 

  715,877  

 
 

  Total current liabilities  

 
 
 
 

  3,022,271  

 
 
 
 

  2,923,208  

 
 
 
 

  3,668,182  

 
 

  Other liabilities  

 
 
 
 

  1,655,437  

 
 
 
 

  3,103  

 
 
 
 

  7,337  

 
 

  Total liabilities  

 
 
 
 

  4,677,708  

 
 
 
 

  2,926,311  

 
 
 
 

  3,675,519  

 
 

  Total equity  

 
 
 
 

  53,267,935  

 
 
 
 

  54,096,863  

 
 
 
 

  55,175,708  

 
 

  Total liabilities and equity  

 
 
 
 

  57,945,643  

 
 
 
 

  57,023,174  

 
 
 
 

  58,851,227  

 
 
 

 

 
 
                                                                                                          
 

   GIGAMEDIA LIMITED   

 
 

   Reconciliations of Non-GAAP Results of Operations   

 
 
 
 

   Three months ended   

 
 
 
 

   3/31/2021   

 
 
 

   12/31/2020   

 
 
 

   3/31/2020   

 
 
 
 

   unaudited   

 
 
 

   unaudited   

 
 
 

   unaudited   

 
 
 
 

   USD   

 
 
 

   USD   

 
 
 

   USD   

 
 

   Reconciliation of Net Income (Loss) to EBITDA   

 
 
 
 
 
 
 
 
 
 
 

  Net loss attributable to GigaMedia  

 
 
 
 

  (874,774)  

 
 
 
 

  (339,990)  

 
 
 
 

  (285,698)  

 
 

  Depreciation  

 
 
 
 

  1,902  

 
 
 
 

  1,192  

 
 
 
 

  354  

 
 

  Amortization  

 
 
 
 

  2,010  

 
 
 
 

  1,252  

 
 
 
 

  4,657  

 
 

  Interest income  

 
 
 
 

  (78,595)  

 
 
 
 

  (73,403)  

 
 
 
 

  (255,719)  

 
 

  Interest expense  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 

  Income tax  expense  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 

  EBITDA  

 
 
 
 

  (949,457)  

 
 
 
 

  (410,949)  

 
 
 
 

  (536,406)  

 
 
 

 

 

 

 

 Cision View original content: https://www.prnewswire.com/news-releases/gigamedia-announces-first-quarter-2021-financial-results-301282101.html  

 

SOURCE GigaMedia Limited

 
 

News Provided by PR Newswire via QuoteMedia

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Restatement of Results

 

The comparative results for the three months and twelve months ended December 31, 2023 have been restated in the financial statements and management's discussion & analysis ("FY2024 MD&A") for the year ended December 31, 2024 to include additional merchant fees and player bonus expenses which were not captured in the previously published financial statements (note 2 of the Financial Statements for the year ended December 31, 2024). The Company's payment processor deducted the additional merchant fee from the daily remittances to the Company, and the deductions were not accounted for by the Company. These additional fees were identified as part of the year-end reconciliation of the amount due from the payment processor, and the financial statements and FY2024 MD&A have been adjusted accordingly. These restatements did not impact the cash balances reported for the years ended December 31, 2022, 2023, or 2024. However, they did result in adjustments to the reported current asset balances for those periods.

 

Financial Highlights for the Fourth Quarter Ended December 31, 2024 ("Q4 2024"):

 
  •  Total Wagers1 at Northstarbets.ca were $303.0 million in Q4 2024, a 42% increase compared to $213.3 million in Q4 2023.
  •  
  •  Gross Gaming Revenue2 at Northstarbets.ca was $10.0 million in Q4 2024, a 31.6% increase from $7.6 million in Q4 2023.
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  •  Revenue2 was $9.5 million in Q4 2024, a 51% increase from $6.3 million in Q4 2023. Revenue in Q4 2024 includes $1.5 million of managed services revenue, which compares to $0.2 million in Q4 2023.
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  •  Gross Margin was $3.6 million, a 71% increase from $2.1 million in Q4 2023, while the Gross Margin percentage increased to 38.1%, up from 33.6% in Q4 2023.
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  •  Profit/(loss) before marketing and other expenses1 was $0.6 million in Q4 2024 compared to a loss of $2.5 million in Q4 2023, indicating that gross margin is now sufficient to cover the Company's overhead expenses.
  •  

Financial Highlights for the Year Ended December 31, 2024 ("FY 2024"):

 
  •  Total Wagers2 at Northstarbets.ca were $980.0 million in FY 2024, a 51% increase compared to $648.8 million in the year ended December 31, 2023.
  •  
  •  Gross Gaming Revenue2 at Northstarbets.ca was $34.0 million in FY 2024, a 51% increase from $22.5 million in FY 2023.
  •  
  •  Revenue2 was $29.6 million in FY 2024, a 57% increase from $18.8 million in FY 2023. Revenue in FY 2024 includes $2.3 million of managed services revenue, which compares to $0.5 million in FY 2023.3
  •  
  •  Gross Margin was $10.5 million, marking a 91% increase from $5.5 million in FY 2023, with the Gross Margin increasing to 35.7%, up from 29.3% in FY 2023.
  •  
  •  Profit/(loss) before marketing and other expenses1 was $0.1 million in FY 2024 compared to a loss of $6.7 million in YTD 2023, an improvement of $6.8 million.
  •  

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2024 Operating Highlights:

 
  • Completed the inaugural Blackjack Championship tournament, an innovative online competition that helped drive the acquisition of new high-value players and engagement for existing customers while increasing Blackjack wagering activity.
  •  
  • Implemented a series of enhancements to the NorthStar Bets platform, highlighted by streamlined navigation in both the Casino and Sportsbook sections, a doubling of Casino game selection since the start of 2024, personalized prop bets and intelligent parlay suggestions.
  •  
  • Introduced the "NorthStar Elite" program and branded tables to help secure the loyalty and satisfaction of our most active players and reinforcing the Company's positioning as a premium offering.
  •  
  • Launched "Sports Insights 2.0," a robust suite of enhancements to our content vertical that includes a redesigned home page, comprehensive team and player statistics, injury and player news feeds, added coverage of popular sports and strengthened casino content.
  •  
  • Gained significant traction outside the Ontario market with managed services revenue from Northstarbets.com site, owned by the Abenaki Council of Wolinak, increasing from $0.5 million in FY 2023 to $2.3 million in FY 2024.
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  • Outpaced the industry growth rates reported by iGaming Ontario in 2024 in both Total Wagers (51% for NorthStar vs. 33% for the industry) and Gross Gaming Revenue (51% for NorthStar vs. 31.5% for the industry).
  •  

Outlook

 

"We expect our consistent pattern of year-over-year revenue increases to continue throughout 2025, based on our ongoing success in attracting and engaging high-value players," said Mr. Moskowitz. "We will maintain disciplined control over costs so that incremental gross margin falls primarily to the bottom line. As we continue to focus on operational excellence, we remain confident that we have the capital necessary to reach profitability based on our current business platform."

 

FY 2024 Corporate Update Webinar

 

On May 15, 2025, Michael Moskowitz will present an in-depth Corporate Update, including a discussion of the Company's FY 2024 Earnings, current operations and strategic priorities. All investors and other interested parties are invited to register for the webinar at the link below.

 

Date: Thursday, May 15, 2025
Time: 11:00 am EDT
Register: Webinar Registration

 

Management will be available to answer your questions following the presentation on the webinar platform. You may also submit your question(s) beforehand in the registration form linked above.

 

Extension of Strategic Marketing Agreement

 

The Company also announced that its wholly owned subsidiary, NorthStar Gaming (Ontario) Inc. ("NorthStar Ontario"), has extended its strategic partnership with Playtech Software Limited ("Playtech Software") through the renewal of their previously announced strategic marketing agreement. Under the agreement, Playtech Software contributes services designed to accelerate NorthStar Ontario's player acquisition strategy in the province. The agreement was first implemented in June 2023 and has since been renewed several times. Pursuant to the latest renewal, Playtech Software will reimburse marketing expenses valued at a total of up to $1.5 million over a 3-month period through to March 31, 2025. Playtech Software will be compensated through a share of revenue from the income generated in connection with the marketing initiatives to which it contributes. The Transaction between Playtech and NorthStar Ontario is exempted from Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions.

 

"We are very pleased to renew the marketing services agreement with Playtech Software," said Michael Moskowitz, Chair and CEO of NorthStar. "The agreement serves to extend our marketing budget and has contributed to our tremendous growth in Ontario. Playtech plc continues to be a valuable strategic partner and we look forward to further collaboration."

 

Continuous Disclosure

 

Further to a review by the staff of the Ontario Securities Commission (the "OSC") of the Company's continuous disclosure, the FY2024 MD&A includes enhanced disclosures with respect to:

 
  • the Company's regulatory framework, licensing regimes applicable to its business operations and the legal authorizations necessary to conduct its business operations;
  •  
  • specific risk factors relating to the Company's business operations which include risks relating to operating in a heavily regulated industry, cyber security risks and risks relating to conflicts of interest with respect to directors and officers of the Company; and
  •  
  • the relationship between the Abenaki Council of Wolinak and the Company as well as its subsidiary, Slapshot Media Inc.
  •  

Such amended disclosure is being included in the FY2024 MD&A to address comments received from the OSC on its management's discussion & analysis, for the period ended September 30, 2024, and to improve the Company's disclosure.

 

As a result of having to include such enhanced disclosure after the OSC review, the Company will be placed on the public list of Refilings and Errors in accordance with OSC Staff Notice 51-711 (Revised) - Refilings and Corrections of Errors for a period of three (3) years.

 

Additional Information

 

For additional information, please refer to the Company's condensed consolidated financial statements for the year ended December 31, 2024, and the corresponding FY2024 MD&A. These documents are available on SEDAR+ at www.sedarplus.ca, and on the Company's corporate website at www.northstargaming.ca.

 

About NorthStar

 

NorthStar proudly owns and operates NorthStar Bets, a Canadian-born casino and sportsbook platform that delivers a premium, distinctly local gaming experience. Designed with high-stakes players in mind, NorthStar Bets Casino offers a curated selection of the most popular games, ensuring an elevated user experience. Our sportsbook stands out with its exclusive Sports Insights feature, seamlessly integrating betting guidance, stats, and scores, all tailored to meet the expectations of a premium audience.

 

As a Canadian company, NorthStar is uniquely positioned to cater to customers who seek a high-quality product and an exceptional level of personalized service, setting a new standard in the industry. NorthStar is committed to operating at the highest level of responsible gaming standards.

 

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange ("TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

 

Non-IFRS Financial Measures [/ Reconciliation of Non-IFRS Measures to IFRS Measures]

 

Throughout this document, management uses certain non-IFRS financial measures and supplementary financial measures to evaluate the performance of the Company. The terms "Gross Gaming Revenue" "Total Wagers" and "Profit/(Loss) before marketing and other expenses" are non-IFRS financial measures. These measures are not recognized measures under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS and are, therefore, not necessarily comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective and to discuss NorthStar's financial outlook. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures, including industry metrics, in the evaluation of companies in our industry. Management also uses non-IFRS measures and industry metrics in order to facilitate operating performance comparisons from period to period, the preparation of annual operating budgets and forecasts and to determine components of executive compensation.

 

Total Wagers

 

Total Wagers are calculated as the total amount of money bet by customers in respect of bets that have settled in the applicable period. Total Wagers does not include free bets or other promotional incentives, nor money bet by customers in respect of bets that are open at period end. Total Wagers is used to provide investors with supplemental measures of our operating performance and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures.

 

Gross Gaming Revenue

 

Gross Gaming Revenue is calculated as dollar amounts bet by customers less the dollar amounts paid out to the customers in respect of such bets which have settled in the applicable period.

 

Reconciliation of Non-IFRS Measures to IFRS Measures

 
                                
 In Q4 2024, the Company reported $10.0 million of Gross Gaming Revenue ($34.0 million in FY 2024) and has provided a reconciliation to the most comparable IFRS financial measure (Revenue) as follows:
$ Millions (unaudited)
Unaudited Three
months ended
Year ended
 Dec 31,
2024 
 Dec 31,
2023 
 Dec 31,
2024 
 Dec 31,
2023 
Gross gaming revenue from wagered games$10.0$ 7.6$ 34.0$22.5
Bonuses, promotional costs and free bets(2.0)(1.5)(6.7)(4.2)
Sub-total Gaming revenue8.06.127.318.3
Other revenue from managed services1.50.22.30.5
Revenue$ 9.5$ 6.3$ 29.6$ 18.8
 

 

 

Operating Results

 

Marketing expenses are a key driver of the business but are completely discretionary. Management considers "Profit/(Loss) before marketing and other expenses" to be a good indication of the extent to which the business' Gross Margin is in excess of its overhead costs, and therefore offsetting some portion of marketing expenses, reflecting improving economies of scale.

 
                                                    
$ Millions (unaudited) Unaudited Three 
months ended 
Year ended
 Dec 31,
2024 
 Dec 31,
2023 
 Dec 31,
2024 
 Dec 31,
2023 
Revenue$ 9,478$ 6,275$ 29,556$ 18,845
Cost of Revenues5,8684,16719,01313,317
Gross Margin3,6102,10810,5435,528
General and administrative expenses3,0334,45210,45312,277
 Profit/(Loss) before marketing and other expenses (1) 577(2,344)90(6,749)
Marketing5,2495,47215,45614,094
Loss before other expenses (1) (4,672)(7,816)(15,366)(20,843)
Other expenses(1,070)1493,6456,547
Net loss$ (3,602)$ (7,965)$ (19,011)$ (27,390)
 

 

 

(1) These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies.

 

Cautionary Note Regarding Forward-Looking Information and Statements

 

This communication contains "forward-looking information" within the meaning of applicable securities laws in Canada ("forward-looking statements"), including without limitation, statements with respect to the following: expected performance of the Company's business, the Company's growth plans being fully funded, expansion into new markets and future growth opportunities, and expected benefits of transactions. The foregoing are provided for the purpose of presenting information about management's current expectations and plans relating to the future and allowing investors and others to get a better understanding of the Company's anticipated financial position, results of operations, and operating environment. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. This forward-looking information is based on management's opinions, estimates and assumptions that, while considered by NorthStar to be appropriate and reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, among others, the following: risks related to the Company's business and financial position; risks associated with general economic conditions; adverse industry risks; future legislative and regulatory developments; the ability of the Company to implement its business strategies; and those factors discussed in greater detail under the "Risk Factors" section of the Company's most recent annual information form, which is available under NorthStar's profile on SEDAR+ at www.sedarplus.ca. Many of these risks are beyond the Company's control.

 

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking statements. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking statements. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents NorthStar's expectations as of the date specified herein, and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

 

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

 
 

For further information:

 

Company Contact:

 

Corey Goodman
Chief Development Officer 647-530-2387
investorrelations@northstargaming.ca

 

Investor Relations:
RB Milestone Group LLC (RBMG)
Northstar@rbmilestone.com

 
 

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