I will now hand the conference over to Mr. Sam Swanell, Group CEO. Please go ahead.
Good morning, and thank you for joining the PointsBet Holdings Ltd Q1 FY 2025 Business Update. I'm Sam Swanell, and joining me on the call today is our Group CFO, Alister Lui. Please note the Safe Harbor statement. All the numbers referred to are unaudited and in Australian dollars unless otherwise stated. We'd like to start with a few comments on our global commitment to responsible gambling. PointsBet endorses the principle of informed choice, which is aimed at empowering customers to make informed decisions and exercise choice regarding their betting expenditure. PointsBet's commitment to responsible betting is demonstrated through its wide range of responsible wagering initiatives and tools. Responsible gambling initiatives will continue to remain central to our organization's sustainability commitment.
In addition to paying AUD 0.48 i n the dollar to governments and racing and sports bodies, as just referenced, we make a material investment in achieving best-in-class compliance with important consumer protection measures. In Australia, PointsBet has committed significant resources to deliver initiatives such as monthly activity statements, zero-day KYC, integration to the National Self-Exclusion Register, and a ban on using credit cards to deposit. This package of initiatives and others means the regulated online wagering sector in Australia is clearly operating to very strong consumer protection standards. When it comes to advertising, PointsBet has restated many times our support for significant advertising reform. However, we do believe it is important that reputable, licensed, compliant Australian operators that pay significant taxes and fees can distinguish themselves from unregulated offshore service providers via sensible advertising.
We've consistently outlined a logical advertising model to be adopted that will clearly protect children and vulnerable people. Turning to slide three, the September quarter has been another period of strong progress for the company. The group delivered net win of AUD 65.3 million, up AUD 7.1 million, or 12% on the PCP. This impressive result has been assisted by improved sports betting net win margins of 9.7%, driven by strong gross win margins and efficient use of generosity. iGaming net win was AUD 4.6 million, up 50% versus the PCP, driven by higher actives, higher turnover, and targeted generosity spent. Importantly, the efficient delivery of net win has resulted in group gross profit for the quarter increasing 15% versus the PCP, outpacing the 12% growth for net win.
Turning to slide four to discuss the Australian trading business. Australia continued the growth trend from our record FY 2024 results to report another strong quarter, with net win improving 7% versus the PCP. Cash-active clients grew 5% versus the June 2024 quarter to 238,000, 238,400 , as we continue to invest for growth in the Australian market. The mix of revenue continued to improve, with double-digit growth in net win from our mass market cohort and marginal growth from our VIPs. We continue to see improvement in our structural margin performance above long-term averages. Gross win margin of 13.2% was driven by growing sports trading margins as customer preferences shift towards higher margin sports products. Net win margin of 10.2% was further enabled by improving generosity spend efficiency to 23% of gross win versus 26.3% in the PCP.
This improved promotions efficiency was driven by more personalized allocations, which saw generosity spend to non-genuine clients reduced by 27% versus the PCP. Our higher and more efficient net win margins, combined with growth in international sport, which is higher margin than racing at a gross profit level, has helped absorb the recent increase in the Victorian point of consumption tax. Gross profit margins for Australia remain stable versus the PCP, coming in at 52.4%. In Q1 FY 2025, PointsBet Australia paid AUD 26.9 million in GST, point of consumption tax, and product fees to Australian governments and racing and sports bodies. This represented 47.6% of our net win for the quarter. Sport again delivered strong double-digit net win growth versus the PCP to be the driving force behind our market share growth.
The strongest drivers of our sports growth were the AFL and NRL, with strong performance in the respective finals series. We've also made a very positive start to the NFL season, which kicked off in September, and more recently, the NBA season over the past two weeks. Turning to slide five, over 67% of our Australian actives for the quarter were customers that either bet exclusively or predominantly on sports, up from 58% in the PCP. Sports activity continues to head towards higher margin, lower staking recreational products. All core metrics for multis improved versus the PCP. Total turnover across all sports multi and Same Game Multi products grew 24%, with net win growing 116%. A case study on this trend was the 2024 AFL Grand Final. 81% of all actives placed the Same Game Multi on the game, and Same Game Multi turnover grew 72% versus 2023.
The same trend repeated for the NRL Grand Final, following on from the previously reported record performance across the State of Origin series. Pleasingly, we are also seeing these themes continue into the start of the NFL and NBA seasons. Our strategy through FY 2024 and into FY 2025 has been consistent. We align our brand, media assets, product development, and generosity spend with the overall growth in demand for premium sport. We invest in enablement through our world-class in-house technology, Odds Factory pricing, and personalized generosity capability. This materializes in our competitive advantage to continuously release new and improved features fully integrated across all functions of the business. Furthermore, we service our clients through a 24/7 around-the-clock onshore capability in trading, risk management, customer service, live betting, payments, compliance, and responsible gambling intervention.
As can be seen on slide six, we successfully released three new first-to-market innovative products during the quarter that evidence our capability: Hourly Quaddie, Beast Mode, and Five for $25. Conception to delivery for each product via proprietary technology was less than six months, and while early days, we are seeing some very impressive results from these products. A fully integrated plan has been executed for each product to reinforce our overall sports-led, built-different brand proposition and provide the core narrative for our Shaq-led brand campaign released in September. To grow actives and share of wallet from actives by appealing to mass market recreational clients who like fast, fun, and easy-to-use products. Utilize our ability to personalize generosity to specific clients and bet types, and lean into growing customer preferences for higher-priced, lower-staked recreational bet types.
These new products add to our positive momentum in sports actives and margin, leading into the start of the NBA season in October, which is our most popular sport. Our results also display the capability-based competitive advantage PointsBet has to successfully launch innovative products to continue to grow actives and net win in a sustainable and responsible manner within the boundaries of expected government-led advertising reforms. Turning to slide seven to discuss the Canadian trading business, we again delivered strong net win growth in Q1 of AUD 8.7 million, up 62% on the PCP, and in Canadian dollars, 69% versus the PCP, outpacing the total Ontario market, which grew at circa 37%. This growth was driven by a strong year-over-year uplift on both Sportsbook and iGaming. Sportsbook net win came in at AUD 4.1 million, up 77% versus the PCP.
This growth was driven by higher turnover combined with improved efficiency on generosity. Our in-play mix of total handle was 76%, a new quarterly high, as our top-tier in-play offerings continued with our Sportsbook customers. On the iGaming side, we delivered AUD 4.6 million in net win and increased 50% versus the PCP. Marketing expenses were flat versus the PCP as we continued to invest to deliver strong customer growth. Total first-time bettors were up 36% in Q1 versus the PCP, and 12-month rolling cash actives reached just shy of 49,000, up 9% from Q4 2024. Our Ontario business now provides circa 17% of our group active clients. Turning to slide eight, since we announced our partnership with Strive Gaming last year, we have been focused on accelerating the growth of our iGaming business. Step one in that journey was to establish the new platform, which we completed late in FY 2024.
This quarter saw us make significant progress on the second critical step, expanding the breadth and depth of leading content. We've now launched three new content providers and grew our games portfolio by 50%, including some of the top-performing games in Ontario from Pragmatic Play, Relax Gaming, and AGS. We have ambitious plans to continue the rollout of leading content throughout the rest of FY 2025. Efforts will now shift to the third step of our acceleration journey, the development of critical tools to improve generosity and loyalty that will help drive improved outcomes such as expanded margins, lower churn rates, and higher customer lifetime values. I will now hand to Alister Lui to walk through our quarterly cash flow statement.
Thank you, Sam. Turning to slide nine, a s of early September 2024, the company held AUD 16.7 million in statutory corporate cash.
Net cash outflows from operating activities, excluding movement in player cash accounts, was AUD 5.6 million. Receipts from customers for the quarter totaled AUD 65.2 million, including AUD 60.6 million from Sportsbook and AUD 4.6 million from iGaming. Operating cash outflows during the quarter included cost of sales of AUD 29.8 million, sales and marketing of AUD 16.5 million, representing the company's investment for the start of the peak customer acquisition period in Australia and Canada. As Sam mentioned, we continue to invest in marketing at a level that will grow our market share in both Australia and Ontario. Non-capitalized staff costs of AUD 12.5 million, which included FY 2024 annual performance payments, and administration corporate costs and GST paid of AUD 12.1 million. Net cash outflows from investing activities were AUD 5.6 million, including capitalized software development costs, which included FY 2024 performance payments. These will normalize lower for the rest of the financial year.
However, as with marketing, we have a significant level of technology investment baked into our P&L that powers our top-tier product in both Australia and Canada. As previously stated, we expect the company to be cash flow break-even for FY 2025 and to finish the financial year with circa AUD 28 million in corporate cash. I'll now hand it back to Sam.
Thanks, Al. Turning to slide ten, we communicated guidance in our FY 2024 results, and we confirmed that guidance today. We expect to deliver revenue of between AUD 280 million and AUD 290 million and EBITDA of between AUD 11 million and AUD 16 million. As mentioned earlier, baked into our EBITDA guidance is significant investment in areas such as marketing and product that will continue to drive our revenue growth in both Australia and Canada.
Our globally pivotal product, proprietary technology, strong brand, international regulated market experience, and outstanding team is very valuable and is driving our market share growth in both the large Australian market and the rapidly growing Canadian market. We will now take questions.
Thank you. If you'd like to ask a question, please press star one on your telephone and wait for your name to be announced. If you'd like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Kai Erman from Jefferies. Please go ahead.
Hi, Sam and Alister. Thank you for taking my question. Could you guys please just give some color on how the Australian wagering market is performing? Noting the uptick you guys had in active clients shows you guys are gaining share. In the AFL NRL grand final comparison is quite helpful just to understand how the market's performing and how you guys are performing. But how is the overall market in sports and in racing as we sort of come up to the Melbourne Cup over the last quarter?
We're good, Erman . Thanks for the question. Look, it's still a little bit hard to tell. We've had some data points from, say, Entain that showed that they were back in some growth. But obviously, until the likes of Sportsbet and Tabcorp report for the quarter, it's a little bit tough to tell. But look, from our data points, we're positive that we've continued to grow our share. The market certainly hasn't grown at the 7% that we've grown at.
And again, from our perspective, as we sort of called out on the call, the vast majority of our growth is coming from sport. Racing's pretty flat. So if that trend was sort of continuing across the country, there's probably a doubt whether racing's back in growth. It's probably still lagging for everyone else, and maybe they're getting some growth on sports. But I did note that Entain spoke to the fact that racing was a little bit healthier for them. So, I mean, at the start of the financial year, we expected modest growth in the Australian market, low single digits. We don't have any reason from any of the data points that we've seen to think otherwise. So we think our 7% is clearly a market share growth number.
Perfect. I'll pass it on there.
Thank you. Your next question comes from Rohan Gallagher from Jarden Group. Please go ahead.
Thank you. Hey, Sam. Hey, Alister. A couple of questions, if I may. Firstly, how would you quantify the impact from the POCT tax increases in Victoria to your business?
Yeah. G'day, Rohan. Look, I think one thing that we spoke about at the FY 2024 results again was that we expected to, despite the increase in Victorian point of consumption tax, we expected to be able to absorb that and maintain our sort of margin from FY 2024 into 2025. I think a really positive data point out of the quarterly is that for Australia, we've maintained PCP gross profit margin at 52.4%. But we also called out that at a group level, gross profit is up 15%, PCP versus net win is up 12%. So at a group level, we've actually outperformed our net win growth.
So I think that's pretty impressive given that we've had to absorb that Victorian point of consumption tax increase. Some of that is driven by our strategy, clearly, to lean into international sport, which is higher gross profit margin, and to be increasingly more effective with personalization from a jurisdiction perspective. And some of it's driven by consumer preference. Clients are just preferring those higher margin multi-products, which gives us a little bit more to work with. But yeah, I think great start from us from the first quarter in terms of absorbing that point of consumption tax.
Yeah. Fantastic. And I don't think you've quantified it, but where would you sit in terms of your mix of racing versus sports now, given the recent leaning into sports?
Yeah. What we've basically said previously is that it's approaching 50/50. It's not quite there yet. That's at a net win level. But again, if you go down to a gross profit level, which takes into account the fees and taxes that we pay, then you might have a slightly different view in terms of what's more important to us. And that's part of our strategy to be leaning into. That's our brand around sports. That's our key capability around sport. And it's also where the margins are most favorable. So that's good for PointsBet.
And finally, and thank you for indulging me, Canada, we see as a free option for you guys. Obviously, you saw spectacular growth in the quarter, subcategory growth. What are the risks? Where are the risks that you see around Canada hitting break-even this year? And how do you see the long-term structural margins relative to Australia? Thank you.
Yeah. I think we've called out that for the full year, Canada's unlikely to be even or break-even. What we've said is that towards the end of the financial year, we expect it to be run-rate profitably. But the first full year we would expect would be FY 2026 rather than FY 2025. So as long as we keep sort of growing strongly versus the PCPs, we'll be happy. And obviously, our overarching aim is to keep outgrowing the market. So we know our—we've got a benchmark there. What's the market doing? And we'd like to keep outperforming the market. We were in constant currency. We're up 69%, and the market was up 37%. So we've done a good job of growing our market share for this quarter, which is great. Yeah. In terms of margins, FY 2024, we actually had 9% gross trading margins in Canada. And this quarter, we started at 8.3%, which is the same as the PCP. Yeah.
I think we'd say that gross margins will be in that 8%-9% range. And we'd like net to be around the 6%. I think that's sort of what we've put a circle around that 6%.
Excellent. Thanks, Sam.
Thank you. Your next question comes from Rohan Sundram from MST Financial. Please go ahead.
Thank you. Hi, Sam and Alister. Just one for me. And coming back to that topic of gross margins and net win, on Australia, do you see further opportunities to grow the gross and net win margins, just given what you were talking about regarding generosities, efficiencies, product mix? I know luck is a big factor, but just came to get your thoughts on how you see the outlook for margins. Thanks.
Yeah. I think with the full year results, we were still sort of talking to a line that gross trading margins hovered a little more around 12%, maybe up to 13%. But I think what we're saying now is we're feeling more comfortable about talking about 13% as sort of the standard for Australia. Even talking about how October started, that sort of trend has continued. So I think we're getting comfortable around 13%. The question about whether there's upside to that, look, I think you can always invest more in your pricing accuracy and pricing capability and to get better at pricing. So the trend is, obviously, consumers continuing to move towards these higher margin products. So it could happen just naturally that we go there. Keep in mind, though, that racing as a whole is still higher margin.
So if we take from racing and give to sport, that in theory should be a drag on margin. So I think, look, I think we feel comfortable saying 13% is sort of put a circle around that for FY 2025. Consumers taking it there, we'll continue to try and make our prices as accurate as possible to maximize our margin. But I think 13%'s about right.
Thanks, Sam.
Thank you. That does conclude our questions for today. I'll now hand back to Mr. Swanell for any closing remarks.
All good. Thanks, everyone who joined the call.
Thank you. That does conclude our conversation.