Q4 2023 Allied Gaming & Entertainment Inc Earnings Call
Greetings and welcome to the Allied gaming and entertainment incorporated fourth quarter and full year 2023 earnings conference call. At this time all participants are in a listen only mode. If anyone 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 to you.
Operator: Allied Gaming Thank you, operator. Good afternoon and welcome to the Allied Gaming Entertainment 2023 fourth quarter and full year earnings conference call. Speaking on the call today are Allied Gaming and Entertainment's Chief Executive Officer Yinghua 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, speak, could, estimate, judgment, targeting, should, anticipate, goal, and variations of these words and similar expressions are intended to identify forward-looking statements. However, actual results could differ materially from those impacted by such forward-looking statements due to a variety of factors discussed in the company's public filings, including 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 statement, whether as a result of new information, future events, or otherwise.
Tyler Drew: Tyler drew with Investor Relations. Thank you Tyler you may begin.
Thank you operator, good afternoon, and welcome to the Allied Gaming Entertainment 2023 fourth quarter and full year earnings Conference call.
On the call today are Allied gaming and entertainments, Chief Executive Officer, and what Chen and Chief Financial Officer Roy Anderson.
None: 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.
None: Could estimate judgment.
We're getting good.
None: We anticipate goal and variations of these words and similar expressions are intended to identify forward looking statements.
None: Actual results could differ materially from those impacted by such forward looking statements.
None: Alrighty of factors discussed in the company's public filings, including 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.
None: The company undertakes no obligation to update any forward looking statement, whether as a result of new information future events or otherwise.
Operator: In addition, certain of the financial information presented in this call represents non-GAAP financial measures; the company's earnings, 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 of why the company believes such non-GAAP financial measures are useful to investors. And with that, it is now my pleasure to turn the call over to Allied Gaming and Entertainment CEO, Yinghua Chen. Yinghua
None: In addition, certain of the financial information presented in this call represents non-GAAP financial measures.
None: The company's earnings release, which was issued this afternoon is available on the company's website.
None: Presents definitions of such non-GAAP financial measures reconciliations to the appropriate GAAP measures and an explanation of why the company believes such non-GAAP financial measures are useful to investors.
And with that it is now my pleasure to turn the call over to Alec gaming and Entertainment CEO you can watch it anymore.
Yinghua Chen: Thank you, Tyler, and thank you all for joining us this afternoon. We've made substantial progress during 2023 and have entered 2024 in a position of strength. Allied Esports International, Allied Mobile Entertainment, and Allied Experiential Entertainment are all poised for growth as we execute on our strategic objectives this year. Let's begin with a review of our financial performance for the year. In 2023, total revenues of $7.7 million were up 21% from 2022, while our net loss attributable to common stockholders decreased by 68%. The improvement in net loss was from our continued commitment to reducing our expenses; general and administrative expenses improved by 30%, and we were well positioned for 2024.
Alec: Thank you Tyler and thank you all for joining us this afternoon.
Alec: We've made substantial progress during 'twenty 23, and have entered 2024 and a position of strength.
Alec: Allied esports international ally mobile entertainment and ally.
Alec: So entertainment.
Alec: Were all poised for growth as we execute on our strategic objectives. This year.
Alec: Let's begin with a review of our financial performance for the year.
Alec: In 2023 total revenues of 7.7 million were up 21% from 'twenty to 'twenty two.
Alec: Our net loss attributable to common stockholders decreased by 68%.
Alec: The improvement in net loss was from our continued commitment to reducing our expenses.
Alec: General and administrative expenses improved by 30% and we're well positioned what 'twenty to 'twenty four.
Yinghua Chen: Turning to Allied Esports International, or AEI, our HyperX Arena was in high demand during the fourth quarter and hosted a variety of events, with 64 events comprising 30 proprietary events and 34 third-party events. Notable events at HyperX Arena included the Omen Showcase Party, which featured over 10 different tournaments as we unveiled the exciting new lines of Omen and HyperX equipment that visitors have the opportunity to experience while visiting HyperX Arena. World Esports Day Celebration in conjunction with TwitchCon After Party. EA Sports F1 2023 Las Vegas Showrun, a thrilling virtual race that featured stars from both sports and entertainment to celebrate the inaugural Las Vegas Grand Prix and act as the official kickoff to the race. All-MLB Team Awards Show, during which Major League Baseball announced its All-MLB First and Second Teams and was joined by current MLB players as well as past legends of the game.
Alec: Turning to Allied esports international or AI or high Plex arena, whereas in high demand during the fourth quarter and how state of a variety of events with 64 events and <unk>.
Alec: I think it's 30 proprietary events and 34 third party events.
Alec: Notable events at high priced arena incurred at <unk> Showcase party, which featured over 10 different tournaments as we unveiled exciting new lines of online and hyper extra equipment that visitors have the opportunity to experience while visiting Hyperx arena.
Alec: World Esports day celebration in conjunction with Twitch Conn After party.
Alec: E Sports F 121, 23, Las Vegas show run.
Alec: Our Sterling virtue raised that featured stars from both sports and entertainment to celebrate the inaugural Las Vegas ground Tweet and act as the official kickoff to the race.
Alec: Oh and there'll be team award show gearing, which major League baseball and now it's all and they'll be first and second teams.
Alec: I was joined by current MLB players as well as past legends of the game.
Yinghua Chen: The event included a celebratory player entrance and pre-show reception and was broadcast live on MLB Network. We were also honored to have HyperX Arena featured in Mark Wahlberg's new hit movie, The Family Plan, which was released in December. The well-received movie highlighted the arena itself and all the high-tech gaming equipment in it, which opened up more potential for similar productions. Fully utilizing the arena assets, movie viewers are able to get a sense of the fun live action that takes place for both participants and viewers during competitions at the arena. Finally, post-quarter end, HyperX Arena held an event hosted by HP, a gaming brand, Omen, and HyperX during The event included product demos, industry panels, and a thrilling performance by DJ Steve Aoki.
Alec: The event included a celebratory play your entrance and pressure and reception and voice broadcast life on and there'll be network.
Alec: We were also honored to have Hyperx arena featured in Mark Wahlberg hits near movie the family plan.
Alec: Which was released in December the <unk>.
Alec: Well received movie has highlighted the arena itself and all of the high Tech gaming equipment, and it which opened more potential for similar production fully utilizing Irina assets movie viewers are able to get a sense of the fun life action that tastes plays for both.
Alec: Participants and viewers during competitions at the arena.
Alec: Finally post quarter end Heartbreak Serena House and event hosted by H P gaming brands Omen, and hyperactive hearings T S.
Alec: The event included product demos industry panels, and a thrilling for four months by D J, Steve Aoki.
Yinghua Chen: An exciting partnership was also announced as Omen and HyperX will become Riot Games' official technology partners and will provide their expertise at global esports events across League of Legends, the Valorant Champions Tour, and Teamfight Tactics in 2024. We always appreciate when companies choose HyperX Arena, as it is a testament to our world-class facility and team, which can be utilized for many reasons, whether work, fun, or both. Turning to our proprietary content, following a successful first year of Wannabe, which explores the journeys of professional gamers and professional athletes who have appeared on Yes Network, Season 2, Part 1 was just released on the Yes app.
Alec: And the exciting punish it was also announced as almond and heartbreaks will become riot games official with technology partners and we'll provide that expertise on global esports events across league of legends and Valor and champions tour and team fight tactic in 'twenty 'twenty four.
None: We always appreciate when companies choose Hyperx arena as it is a testament to our world class facility and team.
None: Which can be utilized for many reasons why the work fun or both.
None: Turning to our proprietary content following a successful first year of a wannabe, which explores the journeys of professional gamers and professional athletes who have appeared on yes network isn't two part one was just recently released the Andi, Yes app.
Yinghua Chen: We remain engaged with other potential partners to utilize our assets and expertise to create additional new and engaging content series for our viewers, and we'll update you as details are finalized. We have now integrated Beijing Lianzhongzhihe Technology, or ZTECH, into Allied Mobile Entertainment, or AME, following the closing of our strategic investment on October 31, 2023. ZTEK, a prominent mobile games developer and operator with advanced in-game advertising strategies, has progressed our vision for AME.
None: We remain engaged with other potential partners to utilize our assets and expertise.
None: Create additional new and engaging content series for our viewers and we'll update you as details are finalized.
None: We have now integrated Beijing, Linda Jojo or technology, or Z Pak into ally mobile entertainment or Ami.
None: Following the closing of our strategic investment on October 31st 2023.
None: Z Pak a prominent mobile games developer and operator with advanced the in game advertising strategies has progressed our vision for a M D.
Yinghua Chen: We expect the investment to improve our overall financial performance significantly and contribute to improving our distribution capabilities this year for our own catalogue of mobile games. During 2023, ZTEC demonstrated strong financial results with revenue of $17 million and positive net income. This year is off to a strong start, and we expect our financials will see a benefit on both the top and bottom lines in 2024, now that ZTEC's financials are consolidated into ours, and Allied Experiential Entertainment, or AEE, has made remarkable progress to close out the year, which has become more evident following recent announcements. Beginning in November, we formed Skyline Music Entertainment Ltd, a joint venture based in Macau Locals are showing great enthusiasm for the event, during which Skyline will oversee talent management, show promotion, sponsorship, marketing, ticket sales, and on-site event management.
None: We expect that investment to improve our overall financial performance significantly and contribute to improving our distribution capabilities. This year for our own catalogue of mobile games.
None: During 2023, Deepak demonstrated strong financial results with revenue of 17 million dollar and positive net income.
None: This year is off to a strong start and we expect our financials, we'll see a benefit at both the top and bottom lines in 2024 now that the tax financials are consolidated into ours.
None: Ally experiential entertainment or E has made remarkable progress to close out the year, which has become more evident following recent announcements.
None: Again in November we formed Skyline Music Entertainment limited a joint venture based in Macau that will aim to capitalize on the burgeoning and large untapped entertainment industry in Asia.
None: That line has already finalized its first upcoming event.
None: The opening leg off the first ever China tour after highly acclaimed and multiple Journal award winning band walk off the Earth on April 4th 'twenty to 'twenty four.
None: Logos are showing great enthusiasm for the event during which that line will oversee talent management show promotion sponsorship marketing it get cells and onsite event management.
Yinghua Chen: Guideline also currently has a pipeline of additional events that we expect to finalize in the near future. In December, Elite Fund Entertainment, a company with expertise in organizing live events across Asia, notably in China's Greater Bay, announced a significant investment into AGE, validating their belief in our vision and the clear opportunity in the Asian market. Partnering with Elite Fund provides us with additional local expertise which is essential in successfully planning and operating events in the region. In addition, their partnerships with companies such as Tencent and Douyin, which is ByteDance, will be an advantage as we look to further expand our reach. Most recently, earlier this month, we announced a new partnership with the World Poker Tour and Win Macau to bring the World Poker Tour to Macau for the first time in its two-decade-long history. World Poker Tour Macau, which runs from June 18th to 24th, will attract poker stars from all over the world, featuring both championship and high roller events, with buy-ins of HK$40,000 and HK$200,000 respectively.
None: <unk> also currently has a pipeline of additional events that we expect to finalize in the near future.
None: In December elite Fun Entertainment company with expertise in August trading life events across Asia, notably within China's Greater Bay announced a significant investment into a J E validating their belief in our vision and the clear opportunity in the Asia market.
None: Partnering with elite fun provides us with additional local expertise, which is essential in successfully planning and operating events in the region.
None: In addition, their partnerships with companies such as Tencent and Dow in but just by dense well be an advantage as we look to further expand our reach.
None: Most recently earlier this month, we announced a new partnership with World Poker Tour and Wynn Macau.
None: Bring world Poker tour to Macau for the first time in its two decade long history.
None: We'll talk to him Macau, which runs from June 18th twenty-fourth will attract pokerstars from all over the World featuring both championship and high roller events with buy ins of Hong Kong dollar at 40000, and Hong Kong dollar 200000, respectively.
Yinghua Chen: We've continued to maintain a strong relationship with the team at World Poker Tour since we sold the company in 2021. And, along with Wynn Macau, we're thrilled to be working with them on this inaugural event, as well as future ones. Along with WPT and WEN, Elite Fund was integral in securing local approvals and assisting in logistics for WPT Macau, underscoring the significance of our partnership. Hosting and operating live events, especially internationally, pose formidable challenges.
None: We've continued to maintain a strong relationship with the team at wont book a tour since we sold the company in 2021 and along with Wynn Macau, we're thrilled to be working with them on this inaugural event as well as future ones.
None: Along with W. P T and win elite fun was integral in securing local approvals and assisting and logistics for W. P. T Macao.
None: Underscoring the significance of our partnership.
None: Posting an operating life events, especially internationally pose formidable challenges.
Yinghua Chen: Yet, leveraging our established relationships and expertise, we streamline the process for our partners, greatly enhancing the prospect of successful and memorable events across continents. Before turning it over to Roy, I'd like to provide an update on our stock repurchase plan. We continue to believe our stock is undervalued and have now repurchased approximately 2.3 million shares of AGAE between the announcement of the plan in November 2022 and the end of 2023. I will now turn the call over to our CFO, Roy Anderson, to provide updates on our Q4 financials. Thank you, Yinghua. Good afternoon, everyone, and thank you for joining us today.
None: Leveraging our established relationships and expertise we streamlined the process all of our partners greatly enhancing the prospect of success, so and memorial events across continents.
None: Before turning it over to Doi I like to provide an update on our stock repurchase plan.
None: We continue to believe our stock is undervalued and have now repurchased approximately two 3 million shares of a G E between the announcement of the plan in November 2022, and the end of 2023.
None: I will now turn the call over to our CFO Roy Anderson to provide updates on our Q4 financials.
Roy L. Anderson: Thank you Angela good afternoon, everyone and thank you for joining us today.
Roy L. Anderson: Our total revenues for 2023 were $7.7 million, up $1.3 million or 21% from 2022. The increase was primarily driven by an increase in sponsorship revenue relating to the renewal of our Naming Rights Agreement at our flagship eSports facility, HyperX Arena in Las Vegas. Season 2 of Elevated and two months of revenue from our recent acquisition of Zeta. On a quarterly basis, revenues for the fourth quarter were $2.1 million, up $.9 million, or 70% from the prior year period. The increase from the fourth quarter of 2022 was driven by an increase in HyperX Arena sponsorship revenues and two months of Z-Tech operations. Turning to expenses, in 2023, total costs and expenses were $14.3 million, a decrease of 21% compared to 2022. The decrease in costs and expenses is primarily due to a $3.2 million, or 30%, reduction in general and administrative expenses.
Roy L. Anderson: Our total revenues for 2023 were $7 7 million up $1 3 million or 21% from 2022.
Roy L. Anderson: The increase was primarily driven by an increase in sponsorship revenue relating to the renewal of a naming rights agreement at our flagship esports facility Hyperx Arena Las Vegas season, two of elevated and two months of revenue from our recent acquisition of <unk>.
Roy L. Anderson: On a quarterly basis revenues for the fourth quarter with $2 $1 million up point 9 million or 70% from the prior year period.
Roy L. Anderson: The increase from the fourth quarter of 2022 was driven by an increase in Hyperx arena sponsorship revenues and two months of <unk> operations.
Roy L. Anderson: Turning to expenses in 2023 total costs and expenses were $14 $3 million, a decrease of 21% compared to 2022.
Roy L. Anderson: The decrease in costs and expenses is primarily due to a $3.2 million or a 30% reduction in general and administrative expenses.
Roy L. Anderson: For the fourth quarter, total costs and expenses of $4 million saw a slight increase of 2% compared to the fourth quarter of 2022. Our net loss was $3.6 million in 2023, down significantly from $10.8 million in 2022. The decrease was driven by revenue growth within our multi-platform content and casual mobile gaming streams, interest income on our short-term investments, and our continued focus on managing our expenses. For the fourth quarter, our net loss was $1.1 million, compared to $1.7 million in the prior year period. Our 2023 Adjusted Albedo Loss of $4.6 million was down from a loss of $8.6 million in 2022. Our fourth quarter adjusted beta loss of 1.2 million was also down from a loss of 1.7 million in the fourth quarter of 2022. Our adjusted EBITDA includes adjustments for depreciation, amortization, business acquisition transaction costs, stock-based compensation, and interest income.
Roy L. Anderson: For the fourth quarter total costs and expenses of $4 million, sorry, slight increase of 2% compared to the fourth quarter of 2022.
Roy L. Anderson: Our net loss was $3 6 million in 2023 down significantly from $10 8 million in 2022.
Roy L. Anderson: The decrease was driven by revenue growth within our multi platform content and casual mobile gaming streams interest income on our short term investments and our continued focus on managing our expenses.
Roy L. Anderson: The fourth quarter.
Roy L. Anderson: Our net loss was $1 1 million.
Roy L. Anderson: Compared to $1 7 million in the prior year period.
Roy L. Anderson: Our 2023 adjusted or be the loss.
Roy L. Anderson: A $4 $6 million was down from a loss of $8 6 million in 2022.
Roy L. Anderson: Our fourth quarter adjusted EBITDA loss of $1 2 million also improved down from a loss of $1 7 million in the fourth quarter of 2022.
Roy L. Anderson: Our adjusted EBITDA includes adjustments for depreciation and amortization.
Roy L. Anderson: This acquisition transaction costs stock based compensation and interest income.
Roy L. Anderson: Now on to our balance sheet. At December 31st, 2023, our cash and short-term investments position totaled $78.6 million, including $5 million of restricted cash, compared to $86.8 million at December 31st, 2022. The company's working capital surplus, defined as current assets minus current liabilities, was $66.4 million at December 31, 2023, compared to $79.1 million at December 31, 2022. Also, during the quarter and under the stock repurchase program mentioned by Yinghua, we acquired 36,977 shares of our common stock in open market transactions at an average selling price of $0.83 for a total repurchase cost of $30,846 excluding We continue to believe that our current share price does not reflect the company's intrinsic value and will evaluate further repurchases based on marketing conditions, the stock price, and other factors.
Roy L. Anderson: Now onto our balance sheet at December 31, 2023, our cash and short term investments position totaled $78 6 million, including $5 million of restricted cash compared to $86 8 million at December 31, 2022.
Roy L. Anderson: The company's working capital surplus defined as current assets minus current liabilities was $66 4 million at December 31 2023.
Roy L. Anderson: Compared to $79 1 million at December 31, 2022.
Roy L. Anderson: So during the quarter and under the stock repurchase program mentioned by Young War, we acquired 36977 shares of our common stock in open market transactions at an average selling price of 83 cents for a total repurchase cost of $30846 excluding bro.
Roy L. Anderson: We continue to believe that our current share price does not reflect the company's intrinsic value and we will evaluate further repurchases based on market conditions stock price and other factors.
Roy L. Anderson: I now turn the call back over to Yinghua. Thank you, Roy. 2023 was a very busy year at Allied Gaming and Entertainment and one that we believe sets us up extremely well for capitalizing on the Allied ecosystem in 2024 and beyond. Across the Allied ecosystem, we have made great progress advancing on our initiative and have continued to demonstrate to our current and potential customers and partners the value and entertainment that we consistently provide, with ZTECH now integrated into our business, AEE finalizing events and expanding its presence in Asia and the continued I would like to reiterate that we're extremely excited for the year ahead and very confident in our path forward. Thank you for your time today. We look forward to speaking with you again when we release our first quarter 2024 results in May. (Inaudible) Thanks for watching!
Young War: Now I'll turn the call back over to young well.
Young: Thank you Ray.
Young War: 123 was a very busy year and I like gaming and entertainment and one that we believe set us up extremely well to capitalize in 2024 and beyond.
Young: Across the ally ecosystem, we have made great progress advancing on our initiatives and have continued to demonstrate to our current and potential customers and partners the value and entertainment that we consistently provide.
Young: With <unk> now integrated into our business.
Young: He he finalizing events and expanding its presence in Asia and the continued demand we have for our AI properties and content I would like to reiterate that we're extremely excited for the year ahead and very confident in our path forward.
None: Thank you for your time today, we look forward to speaking with you again, when we release, our first quarter 'twenty to 'twenty four results in May.
None: And ladies and gentlemen that does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
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