Northstar Gaming Holdings Inc · TSXV:BET
Northstar Gaming — Q2 2024 Earnings Presentation
26 slides from Northstar Gaming's earnings presentation, Aug 14, 2024
Slide 1: Investor Webinar
Investor Webinar August 14, 2024 TSXV:BET OTCQB:NSBBF TSXV: BET OTCQB:NSBBF 1
Slide 2: Disclaimer: Cautionary Statement
DISCLAIMER Cautionary Statement The information contained in this presentation has been prepared by NorthStar Gaming Holdings Inc. (“NorthStar” or the “Company”) and contains confidential information pertaining to the business and operations of the Company. The information contained in this presenta
Slide 3: Disclaimer: Non-IFRS Financial Measures
DISCLAIMER Non-IFRS Financial Measures This presentation includes references to the Company’s “Gross Gaming Revenue” and “Total Wagers”, measures not prescribed by International Financial Reporting Standards (“IFRS”). Management uses certain non-IFRS financial measures and supplementary financial me
Slide 4: Today's Presentation
TODAY’S PRESENTATION • Introduction • Q2 2024 Results • Keys to Our Success • Priorities for 2024/25 Michael Moskowitz CEO & Chairman • Question & Answer TSXV: BET OTCQB:NSBBF 4
Slide 5: Spearheading the Intersection of iGaming and Media
SPEARHEADING THE INTERSECTION OF iGAMING AND MEDIA
Slide 6: Investment Highlights
INVESTMENT HIGHLIGHTS ~C$8.5B Canadian TAM exposed to NorthStar brand, with 01 Ontario’s regulated market launched in April 2022 and brand launch of NorthStarBets.com in November 2023* 02 Industry leading gaming content and technology 03 Cornerstone investment by Playtech PLC Experienced management
Slide 7: Q2 2024 Results At a Glance
Q2 2024 Results At a Glance Total Wagers Gross Gaming Revenue $225.5 million 41% $8.7 million 58% Revenue Gross Margin $7.5 million 61% $3.2 million 69% QUARTER 2 2024 7
Slide 8: Total Wagers
TOTAL WAGERS1 Second Quarter First Half C$ Millions C$ Millions +48% 443.5 300.3 +41% 225.5 160.1 2023 2024 2023 2024 Three months ended June 30 Six months ended June 30 1 Represents a Non-IFRS financial measure. See “Non-IFRS Financial Measures” above for more information. TSXV: BET OTCQB:NSBBF 8
Slide 9: Revenue
REVENUE * Second Quarter First Half C$ Millions C$ Millions +62% 13.4 +61% 7.5 8.3 4.6 2023 2024 2023 2024 Three months ended June 30 Six months ended June 30 * Revenue, including managed services fees, net of bonuses, promotional costs and free bets TSXV: BET OTCQB:NSBBF 9
Slide 10: Gross Margin
GROSS MARGIN First Half Second Quarter C$ Millions C$ Millions +77% 5.4 +69% 3.2 3.0 1.9 2023 2024 2023 2024 Three months ended June 30 Six months ended June 30 Percent of 40% 42% 37% 40% Revenue TSXV: BET OTCQB:NSBBF 10
Slide 11: Consistent Growth Since Launch
CONSISTENT GROWTH SINCE LAUNCH Total Wagers1 Revenue C$ Millions C$ Millions 225.5 7.5 217.6 218.0 6.5 5.9 160.1 140.2 143.3 4.6 4.7 112.3 3.7 3.2 2.0 57.6 14.8 0.5 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 * NorthStar Commenced Opera
Slide 12: Revenue and Gross Margin Growing Faster than Expenses
DEMONSTRATING INCREASING OPERATING LEVERAGE Revenue and Gross Margin Growing Faster than Expenses Revenue Steady growth Expenses Relatively stable Launch 2022 Building Scale Break-even Profitability 2023-24 TSXV: BET OTCQB:NSBBF 12
Slide 13: Revenue and Gross Margin Growing Faster than Expenses
DEMONSTRATING INCREASING OPERATING LEVERAGE Revenue and Gross Margin Growing Faster than Expenses YTD 2024 vs. YTD 2023 $ Change % Change Revenue + $5.1 million + 62% Gross margin + $2.3 million + 77% Total operating expenses * - $0.3 million - 2% * Total operating expenses less share-based payment
Slide 14: 1H24 Activities/Achievements
1H24 ACTIVITIES/ACHIEVEMENTS Raised C$3M in short-term debt funding from Playtech PLC Renewed C$4M Playtech affiliate program to accelerate NorthStar’s player acquisition strategy Surpassed C$1B in wagers since the launch of NorthStarBets in May 2022 Product enhancements: Released NorthStar’s indust
Slide 15: The Keys to Our Success
NoRTHSTAR* GAMING THE KEYS TO OUR SUCCESS
Slide 16: Premium Positioning
PREMIUM POSITIONING Q2/24 vs. Q2/23 −Differentiated Lower cost per acquisition of a customer -12% positioning as a premium platform Steady growth in active players +48% delivering a superior customer experience Higher average player values +7% TSXV: BET OTCQB:NSBBF 16
Slide 17: Competitive Payback Ratio
COMPETITIVE PAYBACK RATIO 5.8 months 10.9 months 2.1 months ~175% lower 420% lower 1 Competitor 12 Competitor 22 1. NorthStar TTM as of March 31, 2024 CAC per player/ monthly average GGR * /player. *Represents a Non-IFRS financial measure. See “Non-IFRS Financial Measures” above for more information
Slide 18: NorthStar Gaming Engine
NORTHSTAR GAMING ENGINE Proprietary Technology Stack, Combines Joint Ventures With Leading Global Players In Playtech And Kambi The NorthStar MOBILE DESKTOP you see iGAMING & MANAGED SERVICE PLATFORM SPORTSBETTING PLATFORM The BETTING LINES / GAMING CONTENT NorthStar you don’t DIGITAL MARKETING / CO
Slide 19: Differentiated Product and Business Model
DIFFERENTIATED PRODUCT AND BUSINESS MODEL By 2024 the Canadian market is estimated to reach C$7.7B in GGR1 FY24E Market Share 20% NorthStar Brand is Well Positioned to Compete in Ontario and Beyond NorthStar Competitive Advantage: • FY2024E market share for niche operators ~C$1.5B ✓ Top-tier tech pa
Slide 20: NorthStar Sports Insights
NORTHSTAR SPORTS INSIGHTS Proprietary Content Includes Analysis, Betting Strategies and Tips, Statistics Why Content? Consumers of NorthStar’s in-house sports content translate to higher player values when compared to NorthStar average customer:1 Higher average deposit Higher online casino turnover
Slide 21: Priorities for Continued Growth
PRIORITIES FOR CONTINUED GROWTH
Slide 22: Key Areas of Focus in 2024-2025
KEY AREAS OF FOCUS IN 2024-2025 2024-2025 Focus Operational Market Excellence Expansion Strategic Product Partnerships Innovation TSXV: BET OTCQB:NSBBF 22
Slide 23: Our Approach to Product Innovation
OUR APPROACH TO PRODUCT INNOVATION Balance of “Incrementally Better” and “Fundamentally Different” Better Different Optimization Fundamentally Differentiation Different Reliability Loyalty Driver Trust Incrementally Perceived Value Speed Better Innovation Simplicity Competitive Performance Reason to
Slide 24: Market Expansion into Alberta and Rest of Canada
MARKET EXPANSION INTO ALBERTA AND REST OF CANADA Regulated Ontario Market ~C$725M Q224, On Track to Surpass C$3.0B for FY24 1 Projected Online Sports Betting and iGaming 2 Alberta Opportunity Market Size (2026E) • Canada’s 4th most populous province with a population (C$ billions) of ~4.4 million (3
Slide 25: Capitalization
CAPITALIZATION ($ millions, except per share amounts) C$ Rivett & Other Related Entities Shareholders 17.5% 28.0% Spot Share Price $0.045 205.4 million Basic Shares Outstanding 205.4 shares Bitove & 17.5% Options 1 17.7 outstanding Torstar Entities.4 2 Warrants 54.6 11.1% Directors & Senior Officers
Slide 26: Question & Answer
NoRTHSTAR* GAMING Question & Answer oOFIo "ii D2 = j © ta & GOLD | Fire Blaze: Blue Wizard™ “WOLF Wolf Gold fanchester ulham yswich <a iverpoo! re bets?
NorthStar Gaming Holdings — Q2 2024 Earnings Presentation on 6ix