NetDragon Announces Fiscal Year 2020 Financial Results

NetDragon Websoft Holdings Limited ("NetDragon" or the "Company"; Hong Kong Stock Code: 777), a global leader in building internet communities, today announced its financial results for fiscal year 2020. NetDragon's management team will hold a conference call and webcast at 10:00am Hong Kong time on 26 March 2021 to discuss the results and recent business developments.

Mr. Dejian Liu , Chairman of NetDragon, commented: "The year of 2020 marked the 10th consecutive year of revenue growth for NetDragon as we continue to focus on growing our business and strengthening our core competencies during the Covid-19 pandemic."

"The pandemic has brought on both unprecedented opportunities and challenges. We have seen accelerating adoption of technology in the education space, a trend which is widely believed to continue in the post-Covid-19 world. Thanks to our years of research and development effort, our one-stop blended learning solutions have enabled us to capitalize on a new market opportunity to address the holistic edtech needs of countries around the world. We believe 2020 is a year of validation of our country model, as we succeeded in commencing our first country-wide rollout in Egypt , as well as expanding our model into a growing list of countries such as Ghana , Thailand and Malaysia . Our flagship classroom technology subsidiary of 2020 and continued to maintain its global market leadership position, being number one in market share in eight of our top ten countries by revenue contribution ^[1] . "

"In China, we continued to focus on broadening user coverage and driving user engagement across multiple product categories in order to prepare ourselves to scale future monetization. With monthly teachers' active installed base of over 1.5 million in December 2020 , 101 Education PPT has become one of the most popular lesson preparation and delivery platforms in China , providing us with a solid foundation to roll out paid value-added services, such as live broadcast service which we started to pilot in the second half of 2020. Meanwhile, One-Stop Learning platform expanded our "to G" penetration to nine provinces during the year, including the provinces of Hubei , Henan and Shaanxi where we are selected as their respective Ministry of Education's official provincial education platforms."

"We are also excited about our achievements in our gaming business in 2020, as we continued to grow our revenue by investing our efforts in development of new titles, expanding the contents in existing titles, as well as strengthening our go-to-market capabilities. During the year, we ramped up content updates for our E udemons IP and launched 7 expansion packs, leading to significant increase in user activities and engagement. Our flagship game Eudemons Online saw its MAU and DAU increased 49% and 46%, respectively year-over year, providing a solid foundation for sustained, long-term growth of the game and the overall E udemons IP. We are also pleased with the progress we have made in developing a brand new next generation 3D Eudemons game, which will take our gamers' experience to a whole new level. Last but not least, as the economy continued to recover from the pandemic, we saw an 8.4% increase in our gaming revenue in the second half compared to the first half, and we expect this momentum to continue into 2021 as we maintain our strategy to maximize IP value with a series of new games to be launched in the new year."

[1] Based on report issued by Futuresource Consulting dated 15th February 2021, incorporating actual shipment volumes (excluding China) of the Company

Fiscal Year 2020 Financial Highlights

Revenue was RMB6,137.6 million , representing a 5.9% increase year-over-year.
Revenue from the gaming business was RMB3,432.7 million , representing 55.9% of the Company's total revenue and registering a 4.0% increase year-over-year.
Revenue from the education business was RMB2,443.9 million , representing 39.8% of the Company's total revenue and registering a 2.0% increase year-over-year.
Gross profit was RMB4,171.3 million , representing an 8.2% increase year-over-year.
Core segmental profit ^[2] from the gaming business was RMB1,963.5 million , representing a 2.1% increase year-over-year.
Core segmental loss ^[2] from the education business was RMB585.5 million , representing an 11.6% increase year-over-year.
Cash inflow from operating activities was RMB1,329.7 million , representing a 13.1% increase year-over-year.
EBITDA was RMB1,621.5 million , representing a 30.2% increase year-over-year.
Non-GAAP operating profit ^[3] was RMB1,314.8 million , representing a 24.0% increase year-over-year.
Profit attributable to owners of the Company was RMB953.5 million , representing an 18.1% increase year-over-year.
Non-GAAP profit attributable to owners of the Company ^[3] was RMB1,142.3 million , representing a 19.6% increase year-over-year.
The Company declared a final dividend of HK$0.25 per ordinary share (2019: HK$0.25 per ordinary share), subject to approval at the coming annual general meeting. Total dividends for the year amounted to HK$0.50 per ordinary share (2019: HK$0.40 per ordinary share), representing approximately 25.9% of the total profit attributable to the owners for the year. During 2020, the Group repurchased over 7.5 million ordinary shares, which accounts for 1.3% of issued shares as of 31 December 2020 , for a total consideration of approximately HK$128.0 million . The total dividends plus share buy-backs for the year accounted for 37.3% of the profit attributable to the owners for the year.

[2] Core segmental profit (loss) figures are derived from the Company's reported segmental profit (loss) figures (presented in accordance with Hong Kong Financial Reporting Standard ("HKFRS") 8) but exclude non-core/operating, non-recurring or unallocated items including government grants, fair value change and finance costs of financial instruments, intercompany finance costs, impairment loss (net of reversal), impairment of goodwill and intangible assets, fair value change and exchange loss on convertible preferred shares, fair value change on financial assets at fair value through profit or loss ("FVTPL"), fair value change and exchange gain on derivative financial instruments and interest and exchange gain on convertible and exchangeable bonds.

[3] To supplement the consolidated results of the Group prepared in accordance with HKFRSs, the use of non-GAAP operating profit and non-GAAP profit attributable to owners of the Company measures are provided solely to enhance the overall understanding of the Group's current financial performance. The non-GAAP measures are not expressly permitted measures under HKFRSs and may not be comparable to similarly titled measures for other companies. The non-GAAP measures of the Group exclude share-based payments expense, amortisation of intangible assets arising on acquisition of subsidiaries, impairment of goodwill and intangible assets, fair value gain on financial assets at FVTPL, fair value gain on derivative financial instruments, finance costs, interest income on pledged bank deposits and exchange gain (loss) on financial assets at FVTPL, bank borrowings, convertible and exchangeable bonds and derivative financial instruments.

Segmental Financial Highlights

	FY2020		FY2019		Variance
(RMB '000)	Gaming	Education	Gaming	Education	Gaming	Education
Revenue	3,432,666	2,443,941	3,299,626	2,395,398	4.0%	2.0%
Gross Profit	3,301,513	758,605	3,165,500	713,009	4.3%	6.4%
Gross Margin	96.2%	31.0%	95.9%	29.8%	+0.3 ppts	+1.2 ppts
Core Segmental Profit (Loss) ^[2]	1,963,534	(585,481)	1,923,262	(524,458)	2.1%	11.6%
Segmental Operating Expenses
- Research and development	(634,272)	(536,678)	(557,561)	(491,261)	13.8%	9.2%
- Selling and marketing	(401,142)	(483,215)	(385,921)	(508,088)	3.9%	-4.9%
- Administrative	(306,586)	(291,157)	(306,434)	(254,866)	0.0%	14.2%

Gaming Business

Our gaming business revenue increased by 4.0% year-over-year to RMB3,432.7 million in 2020. While Covid-19 resulted in a slowdown in spending growth of our high-paying user segment in the first half due to the pandemic, our gaming revenue regained growth momentum in the second half with an 8.4% increase half-over-half as the economy continued to recover. Despite the challenges brought by the pandemic, our overseas markets also demonstrated a strong performance with significant year-over-year increase in revenue, representing 13.7% of total gaming revenue in 2020.

Eudemons , our flagship IP, recorded solid revenue growth in 2020, driven primarily by significant increase in active users. We forged ahead in our efforts to grow a larger active user base, drive higher user engagement and build stronger IP recognition, which all served to drive our future growth. During the year, we took a more aggressive approach to enhance gamers' loyalty by launching 7 new expansion packs and a new Eudemons IP game. As a result, the MAU and DAU of Eudemons IP surged 22% and 37% in 2020 respectively.

The focus of Heroes Evolved during the year continued to be on expanding and optimizing its user base. Through effective marketing and promotion campaigns including collaboration with two well-known anime, OVERLORD and That Time I Got Reincarnated as a Slime , Heroes Evolved expanded its gamer base to ACGN ^[4] field, forming a strong high paying user base foundation for future monetization. During the year, Heroes Evolved Pocket Version was also recommended by App Store and hit the iOS Top 10 free gaming app chart for the first time. Meanwhile, our other major IP Conquer Online recorded revenue growth of 6.3% in 2020, as a result of robust content and user experience enhancement with multiple expansion packs launched during the year.

Looking forward, we expect to drive revenue and profit growth on multiple fronts, including maximizing our IP values through launching new games and entering into new genres, as well as expanding our IP portfolio and IP collaboration. Our pipeline is robust with multiple new games ready to be launched in 2021. We expect to launch two Eudemons IP games, namely Eudemons Mobile II and Legends of Eudemons , as well as Neopets Match 3 and Neopets Island Builders under the Neopets IP during this year. In terms of new IP, our first ACGN-style mobile game Under Oath is also scheduled to be launched in collaboration with Bilibili in the third quarter of 2021.

[4] ACGN refers to Animation, Comic, Game and Novel

Education Business

In 2020, our education business recorded revenue of RMB2,443.9 million , up 2.0% year-over-year. The outbreak of Covid-19 has brought challenges but also opportunities, as blended learning model has become a necessity and we saw its adoption continuing to accelerate during the year. We have successfully capitalized on this opportunity with our unique blended learning solution, and have been engaging in active discussions with multiple countries in the pipeline.

In August 2020 , we signed a 5-year MOU with Ministry of Education of Egypt (Egypt MOE) and commenced the implementation to deliver a country-wide blended learning solution that integrates our Promethean, Edmodo and several other flagship product offerings. In addition, we were in close discussion during the year with education authorities in Thailand , Ghana , Malaysia and several other countries. We expect our country rollout to be executed with a multi-pronged revenue model, including sale of hardware, realizing software revenue in the form of SaaS, subscription or licensing, as well as long-tail revenue in the form of contents and services.

Our classroom technology subsidiary Promethean continued to maintain its market leadership position during the year with its unique product value proposition, a well-established and growing channel of distributors and partners, as well as a high level of brand equity globally. Shipment of Promethean Interactive Flat Panel recorded 16.4% year-over-year increase in 2020, as we successfully transitioned into a virtual sales and marketing model in view of the pandemic. We also saw significant revenue momentum in the second half as Promethean's revenue grew by 8.0% half-over-half compared to the first half. Furthermore, we continued to enhance Promethean's operating efficiency as we achieved reduction in all of our major core direct cost items including freight, warranty and warehousing costs, leading to gross margin increase from 30.1% in 2019 to 33.6% in 2020.

In China , we continued to execute our strategy to broaden user coverage and drive user engagement in order to build a strong foundation to scale monetization. With monthly teachers' active installed base of over 1.5 million in December 2020 , 101 Education PPT has become one of the most popular lesson preparation and delivery platforms in China , and we have started to pilot monetization approaches such as live broadcast service. Our other flagship product, the One-Stop Learning platform, recorded tenfold surge in average MAU to 2 million compared to 2019, and expanded its penetration to nine provinces during the year, including the provinces of Hubei , Henan and Shaanxi where we are selected as their respective education ministries official provincial education platforms. We believe the broad coverage of provinces will enable us to move toward the scaling of monetization, as education authorities are increasingly embracing the use of technologies in learning and teaching as part of the macro trend. Another major milestone achieved during the year is our successful pilot carried out for our Virtual Lab platform across 6 provinces in partnership with the National Center for Educational Technology ("NCET"), a unit directly affiliated to Chinese Ministry of Education. The virtual experimental teaching platform was well received by the participating teachers and students, and we expect to roll out the solution across the country to start generating SaaS revenue in 2021.

With our unique blended learning solutions, we are well positioned to elevate teaching and learning experience and capture market opportunities globally in a world of ever-increasing demand for education technology. We are optimistic about our growth trajectory in 2021 as we continue to capitalize on our market leadership position, our broad market coverage and our ability to execute country-level rollouts.

Management Conference Call

NetDragon's management team will hold a conference call and webcast at 10:00am Hong Kong time on 26 March 2021 to discuss the results and recent business developments.

Details of the live conference call are as follows:

International	+852 2112 1888
Mainland China	4008 428 338
HK (China)	+852 2112 1888
US	1 866 226 1406
UK	0800 032 2849
Passcode	7636526#

A live and archived webcast of the conference call will be available on the Investor Relations section of NetDragon's website at https://ir.nd.com.cn/en/category/webcast . Participants in the live webcast should visit the aforementioned website 10 minutes prior to the call, then click on the icon for "2020 Annual Results Conference Call" and follow the registration instructions.

About NetDragon Websoft Holdings Limited

NetDragon Websoft Holdings Limited (HKSE: 0777) is a global leader in building internet communities with a long track record of developing and scaling multiple internet and mobile platforms that impact hundreds of millions of users, including previous establishments of China's first online gaming portal, 17173.com, and China's most influential smartphone app store platform, 91 Wireless.

Established in 1999, NetDragon is one of the most reputable and well-known online game developers in China with a history of successful game titles including Eudemons Online, Heroes Evolved and Conquer Online. In recent years, NetDragon has also started to scale its online education business on the back of management's vision to create the largest global online learning community, and to bring the "classroom of the future" to every school around the world.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020


	2020	2019
	RMB'000	RMB'000

Revenue	6,137,640	5,793,075
Cost of revenue	(1,966,376)	(1,937,823)

Gross profit	4,171,264	3,855,252
Other income and gains	230,884	139,568
Impairment loss under expected credit loss model, net of reversal	1,607	(26,491)
Selling and marketing expenses	(893,513)	(915,754)
Administrative expenses	(903,111)	(883,083)
Development costs	(1,175,928)	(1,075,400)
Other expenses and losses	(326,817)	(307,820)
Share of losses of associates	(15,080)	(4,936)
Share of losses of a joint ventures	(1,783)	(3,370)

Operating profit	1,087,523	777,966
Interest income on pledged bank deposits	3,263	3,181
Exchange gain (loss) on financial assets at fair value through profit or loss, bank borrowings, convertible preferred shares, convertible and exchangeable bonds and derivative financial instruments	45,302	(1,052)
Fair value change on convertible preferred shares	-	110,697
Fair value change on financial assets at fair value through profit or loss	51,733	219
Fair value change on derivative financial instruments	43,323	-
Finance costs	(157,680)	(24,742)

Profit before taxation	1,073,464	866,269
Taxation	(217,644)	(163,214)

Profit for the year	855,820	703,055

Other comprehensive (expense) income for the year, net of income tax:
Item that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations	(11,568)	5,517
Item that will not be reclassified to profit or loss:
Fair value gain on equity instruments at fair value through other comprehensive income	6,042	878
Other comprehensive (expense) income for the year	(5,526)	6,395
Total comprehensive income for the year	850,294	709,450
Profit (loss) for the year attributable to:
- Owners of the Company	953,501	807,212
- Non-controlling interests	(97,681)	(104,157)
	855,820	703,055

Total comprehensive income (expense) for the year attributable to:
- Owners of the Company	944,235	813,456
- Non-controlling interests	(93,941)	(104,006)
	850,294	709,450

	RMB cents	RMB cents
Earnings per share
- Basic	171.19	152.68
- Diluted	170.96	152.17

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 December 2020


	2020	2019
	RMB'000	RMB'000
Non-current assets
Property, plant and equipment	1,992,708	1,918,697
Right-of-use assets	455,011	467,250
Investment properties	76,529	95,090
Intangible assets	625,771	675,737
Interests in associates	49,659	54,655
Interests in joint ventures	16,563	12,346
Equity instruments at fair value through other comprehensive income	10,808	4,514
Financial assets at fair value through profit or loss	281,194	-
Loan receivables	10,421	9,573
Other receivables, prepayments and deposits	62,841	57,829
Deposits made for acquisition of property, plant and equipment	3,630	11,486
Goodwill	241,332	313,328
Deferred tax assets	43,437	47,317
	3,869,904	3,667,822

Current assets
Properties under development	263,915	469,070
Properties for sale	253,367	20,640
Inventories	316,909	237,478
Loan receivables	22,042	27,354
Trade receivables	525,353	689,360
Other receivables, prepayments and deposits	399,537	328,369
Contract assets	12,236	18,333
Amount due from a related company	47	849
Amounts due from associates	-	2,262
Amounts due from joint ventures	974	279
Amount due from a director	-	400
Tax recoverable	14,035	6,689
Financial assets at fair value through profit or loss	5,781	1,492
Restricted bank balances	15,611	15,089
Pledged bank deposits	146,073	145,787
Bank deposit with original maturity over three months	33,021	-
Bank balances and cash	4,114,410	2,125,637
	6,123,311	4,089,088

Current liabilities
Trade and other payables	1,091,369	980,522
Contract liabilities	405,483	529,497
Lease liabilities	56,224	54,603
Provisions	71,501	69,867
Derivative financial instruments	40,894	-
Amount due to a related company	-	105
Amounts due to associates	3,484	257
Amount due to a joint venture	593	-
Convertible and exchangeable bonds	15,351	-
Bank borrowings	154,597	161,135
Dividend payable to non-controlling interests	99	-
Tax payable	121,083	107,120
	1,960,678	1,903,106

Net current assets	4,162,633	2,185,982
Total assets less current liabilities	8,032,537	5,853,804


Non-current liabilities
Other payables	5,409	16,275
Convertible preferred shares	-	-
Convertible and exchangeable bonds	976,765	-
Bank borrowings	191,073	246,068
Lease liabilities	116,453	108,803
Deferred tax liabilities	90,907	121,610
	1,380,607	492,756

Net assets	6,651,930	5,361,048

Capital and reserves
Share capital	40,951	38,822
Share premium and reserves	6,766,393	5,557,499

Equity attributable to owners of the Company	6,807,344	5,596,321
Non-controlling interests	(155,414)	(235,273)
	6,651,930	5,361,048

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SOURCE NetDragon Websoft Holdings Limited

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NorthStar Gaming Announces Revocation of Management Cease Trade Order

NorthStar Gaming Holdings Inc. (TSXV: BET) (OTCQB: NSBBF) ("NorthStar" or the "Company") is pleased to announce that effective May 16, 2025, the Ontario Securities Commission has revoked the temporary management cease trade order ("MCTO") it had previously granted to the Company on May 8, 2025 under National Policy 12-203 Management Cease Trade Orders, as the Company successfully completed the filing of its annual audited financial statements, management's discussion and analysis, and related certifications for the year ended December 31, 2024 (collectively, the "Annual Filings") on May 14, 2025.

The revocation of the MCTO means members of management are no longer prevented from trading the Company's securities. All of the Annual Filings are available under the Company's profile on SEDAR+ at www.sedarplus.ca.

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NorthStar Gaming Reports Year-End 2024 Results

Annual Revenue Growth of 57%, Gross Margin up 91%

NorthStar Gaming Holdings Inc. (TSXV: BET) (OTCQB: NSBBF) ("NorthStar" or the "Company") today announced its financial results for the three months and year ended December 31, 2024. The Company also announced that it will discuss the results on an investor webinar to be held Thursday, May 15, 2025 at 11:00am (please see below for details). All dollar figures are quoted in Canadian dollars.

"We delivered strong financial results in 2024, highlighted by 57% growth in revenue and a 91% increase in gross margin. At the same time, we held marketing expense to a 10% increase and reduced G&A expense, demonstrating the continually improving operating leverage built into our business model," said Michael Moskowitz, Chair and CEO of NorthStar. "Equally important, our team rolled out innovations in both our sportsbook and casino that have further differentiated NorthStar Bets as a premium offering and helped drive the retention of, and engagement with, our loyal customers."

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.
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.
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.
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.

"Early in 2025, we completed our most significant fund-raising to date, with a $43.4 million debt financing. This capital gives us a long runway on which to continue our trajectory of growth in wagering, gross margins and improving operating leverage. This was a milestone event for our business," added Mr. Moskowitz.

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.
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 revenue	8.0	6.1	27.3	18.3
Other revenue from managed services	1.5	0.2	2.3	0.5
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
$ Millions (unaudited)	Dec 31, 2024	Dec 31, 2023	Dec 31, 2024	Dec 31, 2023
Revenue	$ 9,478	$ 6,275	$ 29,556	$ 18,845
Cost of Revenues	5,868	4,167	19,013	13,317
Gross Margin	3,610	2,108	10,543	5,528
General and administrative expenses	3,033	4,452	10,453	12,277
Profit/(Loss) before marketing and other expenses (1)	577	(2,344)	90	(6,749)
Marketing	5,249	5,472	15,456	14,094
Loss before other expenses (1)	(4,672)	(7,816)	(15,366)	(20,843)
Other expenses	(1,070)	149	3,645	6,547
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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Investor Insight

Overview

Financial Performance

Company Highlights

Key Brands

NorthStarBets.ca

NorthStarBets.com

Management Team

Michael Moskowitz – CEO and Chairman

Corey Goodman – Chief Development Officer, Counsel and Corporate Secretary

Chin Dhushenthen – Chief Financial Officer

Barry Shafran – Lead Director

Vic Bertrand – Director

Brian Cooper – Director

Sylvia Prentice – Director

Dean MacDonald – Director

Chris McGinnis – Director

Alex Latner – Director, General Counsel, Playtech

Mike Cormack – Head of Content & Integrations

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