I would now like to hand the conference over to Mr. Andrew Menz, CEO. Please go ahead.
Good morning, and thanks for joining us today for the betr Entertainment Limited quarterly business update for Q4 FY 2025. My name is Andrew Menz, CEO of the company, and today I'm joined by our Chief Financial Officer, Darren Holley , and our Chief Operating Officer, Bill Richmond . We'll start today on slide three of the presentation. Yesterday, we announced an increase to our superior all-scrip off-market takeover offer for PointsBet Holdings Limited. PointsBet shareholders who accept our increased offer will now receive 4.219 betr shares for every PointsBet share held, representing $1.35 in value per PointsBet share based on a closing price of $0.32 as at the 29th of July. This is clearly superior to MIXI's offer of $1.20 per PointsBet share, and betr expects that the PointsBet Board will reconsider its recommendation that PointsBet shareholders accept the MIXI offer and will instead now recommend the increased betr offer.
As we've stated a number of times in recent months, we firmly believe in the combination rationale driven by increased scale and a highly material synergy prize, and that we can create material value for PointsBet and betr shareholders by integrating these two businesses, allowing us to profitably grow our share of the Australian wagering market. Importantly, upside from ongoing participation in the combined business is not available to PointsBet shareholders under the MIXI offer. PointsBet shareholders should continue to take no action until both offers are open, and we will continue to keep the market informed of further developments. Turning to slide four, with Q4 closing out the first full year since the combination of BlueBet and betr, it's timely to look back on the commitments that we made to the market at that time and our record of rapid execution and delivery.
We've reached monthly EBITDA profitability in November and were profitable for the first half of FY 2025, and we maintained that momentum into the second half, delivering a full-year EBITDA, normalised EBITDA of $7 million, beating consensus by 15%. This performance not only reflects the results of our strategic commitments, but the discipline and operational excellence within our business operations, which we've enhanced across the year. We've scaled effectively and efficiently, we've maintained discipline on margin, and we are now delivering profitable growth while continuing to focus on long-term shareholder value creation. Throughout the year, we exceeded expectation on merger synergies between betr and BlueBet, having annualized benefits ahead of schedule and executed a full customer migration just 59 days after completion. Our repeatable M&A model delivered the strategic acquisition of TopSport and a customer migration only 55 days after its announcement, with a seamless customer experience.
Importantly, we achieved and sustained profitability while executing these transformative deals and pursuing more. That underscores the confidence that we have in our ability to continue to scale by inorganic growth. This record of delivery and operational excellence demonstrates the value that we can create for PointsBet shareholders, with our proposal for PointsBet closely mirroring what we've achieved with the BlueBet and betr combination, but on a more material scale. I'll now hand you to Darren to take you through the Q4 trading metrics.
Thanks, Andrew. Moving to slide five, as Andrew said, another strong quarter for the company has seen betr record FY 2025 normalised EBITDA of $7 million, beating analyst consensus by 15%. This result was underpinned by continued levels of record turnover, which was up 160% versus the prior corresponding period to $399.5 million. Gross win was up 155% to $53.1 million, and net win up 132% to $40.2 million versus the PCP. Importantly, net win margin remained in our target range north of 10%. These activity metrics continue to demonstrate the new and growing scale of the betr base, with TopSport activity commencing in this quarter. We're pleased to see this expanding base translating into strong profitable growth, affirming our pursuit of margin accretive opportunities, not simply chasing volume. Our scalable platform, enhanced offering, and continued investment in customer experience are driving meaningful returns across our higher margin products.
We are well- positioned to maintain this momentum into the new financial year, as strong organic and inorganic growth prospects support our laser focus on consolidating the Australian wagering market. I'll now hand back to Andrew to talk more through the highlights of the quarter.
Thanks, Darren. Turning to slide six, this chart shows the company's long-term, stable, and consistent net win margin. It highlights a structural margin advantage, including over our peer set, with consistently higher net win margins and lower levels of volatility than key competitors, and reflects a valuable customer base that does offer stable and predictable revenue margins. Importantly, the company's net win margin for FY 2025 remains in the same favorable range as BlueBet had prior to the betr acquisition. This is a strong achievement and demonstrates that we have taken customers from much lower margin betting platforms in the legacy betr platform and TopSport, and obtained a positive return in line with our long-running consistent net win margin trend.
The company's ability to generate net win margins that are consistent and stable and in that target range of north of 10% are driven by our market-leading risk and trading capability, which was further bolstered with the acquisition of TopSport, as well as our highly attractive customer base with low levels of volatility. Our data-driven generosity strategy gives the right customer the right offer at the right time and minimizes waste and maximizes impact. Finally, our proprietary technology platform and promotion engine, in which we've invested heavily, and we are now obtaining increased returns as we add further scale. On slide seven, we outline the first full quarter of the TopSport acquisition. Our ability to add incremental volume has been a key achievement of FY 2025, not just through the betr and BlueBet combination, but that strategic acquisition of TopSport.
The novel commercial structure meant the transaction completed at the point of customer migration, which was only 55 days after announcement of the acquisition. This structure minimized risk, maximized shareholder value, and allowed a simpler and more efficient transaction and rapid synergy realization. Customers that represented more than 90% of the last 12 months' migratable value have already completed the migration journey, and the early insights from the behavior suggest that margin uplift is a key benefit of the transaction. Net win margin from TopSport customers has grown strongly since the migration and is materially higher than the margin on the legacy TopSport platform. Pleasingly, the chart shows that we're driving month-on-month improvements to the TopSport base's net win margin towards the levels of our overall business, which itself is the result of our product, platform, and trading capabilities as applied to this customer cohort.
We've been pleased with the level of customer stickiness, particularly amongst the higher value tiers of TopSport customers, and that's reflective of TopSport's long-held reputation as a family-run and genuine bookmaker. In terms of long-term customer reactivations, they weren't quantified in our model for TopSport, but they do represent potential upside benefit as we strategically re-engage the TopSport database, heading into the higher quality racing and sports calendar of the first quarter of FY 2026. The business remains focused on value capture from the TopSport transaction, and that will be further aided by a betr brand refresh in Q1 and by our product roadmap, which will allow us to deliver a number of key innovative products that we know the customers want. I'll hand back to Darren to talk through the cash flows.
Thanks, Andrew. Looking now at slide eight, which will provide a summary of the quarterly cash flows released this morning in our Appendix 4C. At June 30, 2025, the company's cash balance was $105.1 million, including client balances of $13.8 million. Net win for the period came to $40.2 million for the quarter. Net cash used from operating activities for the Australian business was $0.7 million, with cash outflows in the U.S. of $0.3 million, which relate to the repayment of renegotiated market access agreements. Australian operating cash flows were impacted by one-off TopSport migration bonus of $0.2 million and prepayments relating to Q1 FY 2026 of $0.8 million. Without these, the Australian business would have remained operating cash flow positive.
Cash outflows from investing activities of $63.8 million were primarily driven by the investments of $57.1 million to purchase a strategic 19.6% stake in PointsBet, $2.5 million of capitalized technology costs, and $4.2 million for the upfront payment to TopSport less the value of transferred client balances. Cash inflows from financing activities were $138.6 million following our successful $130 million equity raise and $18.9 million from borrowings, representing $33.9 million drawn from our NAD facility less the value of a repayment of an unsecured loan. All of these borrowings were used to secure the strategic PointsBet stake. These were offset by transaction costs of $10.3 million from the TopSport transaction, the $130 million equity raise, and legal, financial, and strategic advice relating to the PointsBet acquisition. I'll now hand back to Andrew prior to opening up to questions.
As you can see, quarter four capped off a milestone year for betr, with the transformational BlueBet-betr combination and the strategic acquisition of TopSport adding scale to the ongoing operational excellence in our core. With that, we'll now open to questions.
Thank you. If you wish to ask a question via the phones, please press star one and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speaker phone, please pick up the handset to ask your question. If you wish to ask a question via the webcast, please enter it into the ask a question box and click submit. Your first question comes from Phil Chippendale f rom Ord. Please go ahead.
Hi gentlemen, thanks for your time. Firstly, question for Andrew. You mentioned the product roadmap. Can you just give us a sense of the types of things that you're working on and looking to release this year, please?
Yeah, of course, Phil. Thanks for your question. I don't want to go too far into exactly what will be out because there's three or four major releases that we see coming before football finals and spring racing carnival. Obviously, the types of products that we are planning to deliver are based on pretty extensive customer research where we know customers are going, but also where we believe we can maintain structural margin advantages. We'll be looking into those higher margin products with some same-game multis features, as well as some innovation around racing as well, which we're quite excited to bring about over the upcoming spring carnival.
Okay, so you'd sort of anticipate not only sort of healthy margins coming through, but increased turnover on the back of that engagement?
Yeah, certainly. I think there's a number of reasons as to why you'd look to put out some of the products, some that we're looking for. We're looking to maintain and enhance that net win. Others, really importantly, are about generating engagement, growing share of wallet from our existing customer base, acquiring new customers, which is a key focus for the business in FY 2026. We do believe that some of the products that we'll be able to launch will certainly assist with that organic growth.
Okay, thanks. Darren, a question for you. I think marketing and advertising in the quarter was about $5.5 million. The risk of sort of preempting an August sort of discussion around FY 2026, how should we be thinking about that level of expenditure over the next 12 months or so? Presumably, that will increase in line with the net win dollars that you've been generating. Is that a fair assessment?
Yeah, thanks, Phil. I think we've invested well in our brand this year. As Andrew indicated, we do want an increased focus on acquisition leading into FY 2026. I think we'll see an increase in our marketing investment through that period, particularly around some top-line opportunities coming as well. Whilst we're certainly prudent in the money we're spending, we certainly see the key spring and carnival and football season as a great opportunity to acquire new customers where we'll see an elevated level of marketing investment through that period.
Obviously, that investment will, as always with this entity, be highly disciplined. I think the interesting thing that we're noticing in the market in recent times, Phil, is that some of these more attractive marketing properties are coming on at discounted rates. Therefore, for the first time in quite a long time, I think a marketing spend, your dollar can go a lot further than it used to when the competition was very hot, you know, when betr entered the market and before, during the COVID-interrupted period. We certainly see some primary properties out there that can deliver really solid returns, but probably not at the prices we've seen them at historically. That gives us confidence to think about that investment on an ongoing basis.
Okay, thanks. Last question for me, one for you, Andrew. Obviously, on the back of the improved offer yesterday, just keen to understand what the sort of response has been like with investors that you've been able to speak to. I know it's only been a short period of time, but obviously we can deduce what we can from share prices, but yeah, just be intrigued to know what the feedback has been so far from your conversations.
Yeah, you're right, Phil. It's all still pretty fresh, so not a heap of feedback yet, other than we've done exactly what we said we were going to do. That's how we've acted the whole way through our proposed acquisition of PointsBet . We've been consistent in what we've been saying, and we've been backing that up with action. The shareholders that we've spoken to so far are not surprised at all, given those statements that we've made that we would really look to increase that offer.
Okay, thanks. Probably room to submit just to say congratulations on the realisation of all the synergies that you targeted over 12 months ago now. A great result, I'll jump back in the queue.
Thank you, Phil. Appreciate it.
Thank you. Your next question comes from Leo Partridge from Morgans. Please go ahead.
Morning, gents. Well done on the result. Just the first question for me, just on the fourth quarter performance and kind of leading into the first quarter as well. With the new cohort, are you seeing any shift in preferences? For instance, you know, greater uptake in sports versus racing, or is it more engagement with multis versus singles? Just kind of my second question as well. Not sure how much you can say, but you know, what can you share around what led to the Takeovers Panel involvement and the confidence that you have in the process being resolved in a way that keeps everything on track? Cheers.
Thanks, Leo. I might touch on the first one very quickly. The application that PointsBet made to the Takeovers Panel is a routine step in hostile Takeovers and unsurprising given their stated preference historically for the MIXI offer. We're looking forward to the panel hearing the matter and for PointsBet shareholders being given the opportunity to make an election between our improved offers and that of MIXI's. Given the matter is in front of the panel now, there's probably not a heap more that I can say at this time other than we will obviously endeavor to keep the market updated when things progress.
In terms of the quarter four performance and the characteristics of the TopSport base, as I say, they were probably betting largely on some lower margin products on the TopSport business, a lot of racing tote business, which isn't really profitable at the levels that you need it to be. What we've seen is a repositioning of the offering that we've made to TopSport customers, encouraging them to trial more racing fixed odds, more same-game multis, and moving them towards those products where we can generate those net win revenue margins that we require to keep us towards 10%. I think you can see in that net win margin expansion on that month-on-month basis that we've been successful not just in migrating the customers to a platform, but also to betting products that yield superior results for us from an NGR perspective.
We'll continue to focus on that whilst continuing to make sure that they receive a fantastic customer experience when they're betting on those products.
Awesome. Thanks, Andrew.
Thanks, Leo.
Thank you. Once again, if you wish to ask a question via the phones, please press star one. Your next question comes from Andy Orbach from Taylor Collison. Please go ahead.
Thank you very much. Nice result, guys. Just curious on a read-through in terms of consistency in net win margins that you've been reporting amidst criticisms, I guess, about the makeup of your database. How do we interpret that? Also, just a read-through for potentially for other operators, how are you seeing the favourability of results both from a racing and a sports perspective during 4Q? Thank you.
Thanks, Andy. I'll touch on your last question first. I think early on in the fourth quarter, there were some challenging sports and racing results, and that was felt across the market. We did see quite a bit of a change through the last six weeks of Q4 with much more favorable results. That allowed us to bring that gross win margin for the quarter back to 13.3%, which is under where we proposed to be, but I think represented the challenges that we faced in April from some of those results perspective. Pleasingly, our favorable results have continued into July, and July looks like yet another relatively strong margin month. Good consistency there from both a gross win and a net win margin perspective.
In terms of some of the criticisms of the customer base, I think it's very clear on slide six that this is a highly consistent and stable customer base that continually generates net win margins north of 10%. I think that represents a customer base that is valuable and has a team working on it that can extract the right gross win margin through trading capabilities and also deploy generosity efficiently to ensure that that net win margin is, as I said before, consistent, stable, and largely higher than similar sized operators in our peer set.
Excellent. All right, thanks very much, guys.
Thank you.
Thanks, Andy.
Thank you. There are no further questions at this time. I'll now hand the conference back to your speakers.
Thanks again, everyone, for joining us at the Q4 for FY 2025. We look forward to presenting our annual results to you next month and keeping the market up to date with the ongoing PointsBet acquisition. Thank you very much for your time this morning.
That does conclude our conference for today. Thank you for participating. You may now disconnect.