Q2 2023 Allied Gaming & Entertainment Inc Earnings Call

Greetings and welcome to the Allied gaming and entertainment second quarter 2023 earnings conference call. At this time, all participants are in a listen only mode.

Only one should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Tyler drew with Investor Relations. Please go ahead.

Thank you operator, good afternoon, and welcome to the Allied Gaming and Entertainment 2023 second quarter earnings Conference call.

Speaking on the call today are Allied gaming and entertainments, Chief Executive Officer, <unk>, Chen and Chief Financial Officer Roy Anderson.

Before I turn the call over to management. Please note that our prepared remarks may contain forward looking statements.

Words, such as May will expect intend.

Plan believe.

Could estimate judgment.

Targeting should anticipate goal and <unk>.

Variations of these words and similar expressions are intended to identify forward looking statements actual results could differ materially from those implied by such forward looking statements due to a variety of factors discussed in the company's public filings.

The risk factors discussed in documents filed with the Securities and Exchange Commission.

Although the company believes the expectations reflected in such forward looking statements are based upon reasonable assumptions. It can give no assurance that its expectations will be attained.

The company undertakes no obligation to update any forward looking statements.

As a result of new information future events or otherwise in.

In addition, certain of the financial information presented in this call represents non-GAAP financial measures. The company's earnings release, which was issued this afternoon and is available on the company's website presents definitions of such non-GAAP financial measures reconciliations to the appropriate GAAP measures and an explanation.

Why the company believes such non-GAAP financial measures are useful to investors.

With that it is now my pleasure to turn the call over to ally gaming and entertainment CEO you can watch it qinghua. Thank you Paolo.

Good afternoon, and thank you all for joining as well as Michel had the latest update on our journey towards becoming a leading and trusted in the gaming and entertainment industry.

Today, we're delighted to present significant milestones that highlight our continued growth and success.

First and foremost on the financial performance side, we are thrilled to announce a substantial increase in our quarterly revenue up to a $3 3 million.

Which is 182% year over year.

The increase was driven by the continued success of our original content sponsorship and a new arena and mobile trucks sponsorship.

These pillars have been instrumental in propelling our revenue growth.

Additionally, our diligent efforts in expense reduction have proven to be highly fruitful.

Spite this significant revenue growth, we have managed to reduce our G&A by 20%.

Which contributed to a 1.6 million year over year improvement in our adjusted EBITDA is.

It speaks to our commitment to maintaining fiscal responsibility, while achieving remarkable growth.

During the quarter, we continued to deliver captivating and engaging experiences through our audience well.

We produced a total of 99 events.

Pricing 41 proprietary events and 58 third party events.

Notable events include E stores presents eldest growth online.

[noise] World Poker tour event.

Ross video customer appreciation.

Elevated show.

Licensing awards reception.

Golden Knights Watch party and T L legal legend champions after risk Caliche event.

This continued growth further demonstrates the appeal of our unique arena and truck assets.

And our event production capabilities in particular, our original content series elevated hasn't been a resounding success.

Elevated season to revolutionize the face of esports adjacent entertainment.

Managing the world of gaming Creative Arts and reality T V into a potent blend of competitive creativity.

The show has reached a total viewership of $12 3 million.

With $89 5 million life minutes watched and 11.54 million total unique viewers over the five week period.

We've also continued to production of our other original content series, one of east isn't too.

Which will bring even bigger stars and players from the Yankees network.

Impressively. This theory has a reach of over $9 3 million homes 30, yes, app and the yes distribution channels.

One more exciting development to update is that through our long standing successful partnerships with key players like H P. Hotbed.

We will be expanding our retail and merchandise offering to our gaming community by conducting all funds with the most advanced gaming peripherals P. CS equipment trying to gadgets and the variety of gamers lifestyle merchandise.

Through our uniquely positioned Hyperx arena and allies online shop.

Also in line with our strategic plan to broaden our gaming and entertainment coverage, we have taken several steps to pursue aggressively a wide range of strategic opportunities.

Including the establishment of two new wholly owned subsidiary.

Ally Mobile entertainment and ally experiential entertainment that will spearhead this effort.

Mobile entertainment a M E is dedicated to exploring opportunities in the massive and growing mobile games market.

We're off to a strong start.

<unk> identified various potential partners products and services.

And they're currently in the process of testing and pre public launching a number of casual mobile games as well as reviewing and pursuing complementary businesses as potential targets for partnership and acquisition.

Ally extra enjoy entertainment he focuses on organizing general entertainment live events.

Brian Show Entertainment venue operation management and consultation.

Like Ami AE has already laid a solid business foundation with promising partnerships.

We're currently pursuing potential opportunities with various partners.

We will share more about the events and initiatives that we believe will drive further growth and success for a JV.

We expect that ally mobile and ally experiential entertainment will enable us to break into new markets.

Creating additional revenue streams and enhancing our financial performance, but in the next 12 months.

Further updates will be provided when it is appropriate.

In conclusion, we're very excited about the remarkable progress we have made and the opportunities that lie ahead.

Before turning the call to Roy I also like to know that we continue to believe our stock price is undervalued.

To that end and under our share repurchase plan, we have now repurchased approximately $2 4 million dollar off a J E stock between the announcement of the plan in November and the end of Q2.

With that I'd like to turn the car now to our CFO Roy Anderson to give you updates on our Q2 financials.

Thank you Ian Guar and good afternoon, everyone.

From a P&L perspective, it was a strong second quarter with revenues up $3.3 million up 182, 3% from the prior year period.

But as you alluded to the year over year improvement is primarily attributable to the successful release of the second season of our original content series elevated which consisted of 10 episodes.

The improvement also includes an increase in sponsorship revenues at our World Class E Sports Arena in Las Vegas, and on our Allied mobile esports truck.

Total costs and expenses for the second quarter of 2023 or $4.7 million, a decrease of two 4% compared to the second quarter of 2022.

The improvement is particularly impressive.

When considering the additional expenses incurred during the quarter related to the production of season, two with elevated the additional expenses were more than offset by decreases in other expense categories, including live event production costs, which declined by 31, 1%.

General and administrative expenses, consisting principally of cash and stock based compensation, which declined by 19, 6%.

And depreciation and amortization expense, which declined by 73, 7%.

Net loss for the second quarter of 2023 improved to $700000 compared to a net loss of $3 7 million in the prior year period.

Our results for Q2 2023 included approximately $715000 of interest income earned on short term investments.

Our adjusted EBITDA loss was $1.1 million in the second quarter of 2023, improving significantly from a loss of 2.7 million in Q2 2022.

The improvement consists principally of the gross margin recognized on our content and event productions.

And the increase in arena sponsorship revenues, coupled with a reduction in our general and administrative expenses.

Our adjusted a beta includes adjustments for depreciation amortization stock based compensation and interest income.

Now moving onto our balance sheet as of June 32023, our cash and short term investment position totaled $82 $2 million, including $5 million of restricted cash compared to $86 8 million at December 31, 2022, which also included $5 million of restricted cash.

As of June 30 of 2023 of the company's working capital position was $74 7 million, including the current portion of an operating lease liability of $1.3 million that was recorded in connection with the implementation of the new leasing standard ASC 842 on December 31, two.

'twenty two.

During the quarter and under our stock repurchase program, we acquired 372000 and 436 shares of our common stock in open market transactions at an average selling price of $1.08 for a total repurchase cost of $404010 excluding brokerage fees.

This brings us to $2 $4 million in total repurchases since the commencement of the plan moving forward the manner timing and amount of any purchases will be will continue to be based on an evaluation of market conditions stock price and other factors.

In conclusion, it was a positive quarter at Allied and our business is trending well as we head into the back half of the year I.

I will now turn the call back over to Union law for closing remarks. Thank you Roy It has certainly been a busy 2023 so far at Allied gaming Entertainment as we continue implementing our strategic plans.

While we still have plenty of work to do to build our full vision for the company.

We have seen encouraging progress and believe we're right on the edge of moving up to the next level.

Thank you again for joining us today as well as your support.

Look forward to speaking with you and providing updates on our business and third quarter results in November .

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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