NorthStar Gaming Reports Third Quarter 2025 Results

Executive Summary

• NorthStar Gaming reported Q3 2025 revenue of C$6.9 M, up 4% YoY, and a fourth consecutive quarter of positive profit before marketing and other expenses (C$0.2 M).
• Gross margin improved to C$2.4 M (+14%) and gross‑margin percentage rose to 34.7%, reflecting higher managed‑services revenue and cost efficiencies.
• The company disclosed liquidity concerns, noting potential covenant breaches and ongoing discussions with its senior lender; a cash‑flow forecast to Dec 2026 is in place.

Key Details

• Revenue: C$6.9 M (Q3 2025) vs. C$6.6 M (Q3 2024); YTD revenue C$23.3 M vs. C$20.0 M YoY (+17%).
• Managed Services Revenue: Q3 2025 = C$0.8 M (↑167% YoY); YTD 2025 = C$1.9 M (↑138% YoY).
• Gross Margin: C$2.4 M (Q3) vs. C$2.1 M (prior year); gross‑margin % 34.7% vs. 31.7%.
• Profit before Marketing & Other Expenses: Q3 2025 = C$0.22 M (vs. loss of C$0.51 M in Q3 2024); YTD 2025 = C$1.55 M (vs. loss of C$0.65 M YoY).
• G&A Expense: C$2.19 M (Q3) – down 16% YoY; YTD 2025 = C$7.37 M, a 1% decline YoY.
• Marketing Expense: C$2.26 M (Q3) – down 21% YoY; YTD 2025 = C$9.4 M, an 8% reduction YoY.
• Net Loss (IFRS): Q3 2025 = C$(4.09) M vs. C$(3.65) M prior year; YTD 2025 = C$(13.73) M vs. C$(15.57) M prior year.

Operating Highlights

• Launched “The Boost” website to broaden Ontario customer acquisition.
• Phase 1 of new casino lobby live, enhancing speed and personalization.
• Onboarding improvements: 9% faster registration, 28% lower abandon rates, 8% higher completion rate.
• Marketing campaigns (e.g., “Exceptionally Canadian”) and award recognitions at Clio Sports Awards.

Outlook & Liquidity

• Management expects more moderate top‑line growth in 2026, focusing on disciplined player acquisition and cost control.
• Going‑concern statement included; cash‑flow forecast to Dec 31 2026 suggests ability to meet obligations but acknowledges risk of covenant breach.
• Ongoing discussions with senior lender regarding potential additional debt or equity financing if needed.

Restatement Note

• 2024 comparative results restated to include previously omitted merchant fees and player bonus expenses (see note 2 of Q3 2025 financial statements).

Notable Quotes

“We maintained our track record of year‑over‑year growth in both revenue and gross margin in the third quarter,” – Michael Moskowitz, Chair & CEO.
“Looking ahead to 2026, the Company has adjusted its strategy to focus on a disciplined approach to optimize player acquisition and retention…” – Michael Moskowitz.