Q3 2024 Allied Gaming & Entertainment Inc Earnings Call
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Speaker Change: Greetings and welcome to the Allied Gaming and Entertainment Inc. 3rd Quarter 2024 Earnings Conference Call.
At this time, all participants are in a listen-only mode.
Speaker Change: If anyone should require operator assistance during the conference, please press star and then zero on your telephone keypad.
As a reminder, this conference is being recorded.
Speaker Change: It is now my pleasure to introduce your host, Tyler Drew, with Investor Relations. Thank you. You may begin.
Speaker Change: Thank you, Operator. Good afternoon and welcome to the Allied Gaming and Entertainment 3rd Quarter 2024 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.
Speaker Change: 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, seek
Speaker Change: Could, estimate, judgment, targeting, should, anticipate, goal, and variations of these words and similar expressions are intended to identify forward-looking statements.
Speaker Change: 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, including the risk factors discussed in documents filed with the Securities and Exchange Commission.
Speaker Change: 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.
Speaker Change: The company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
Speaker Change: In addition, certain of the financial information presented in this call represents non-GAAP financial measures.
Speaker Change: 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 of why the company believes such non-GAAP financial measures are useful to investors.
Speaker Change: It was a strong quarter for us both operationally and financially, as we achieved 93% revenue growth and continued to push our strategic initiatives forward, including the launch of World Mahjong Tour, which we believe will accelerate our growth.
Speaker Change: Our world-class HyperX Arena was in high demand throughout the third quarter, hosting 61 event days, 34 of which were third-party events.
Speaker Change: Highlights include our multi-year returning HackerOne live hacking event where top hackers from around the globe collaborated to strengthen organizational security.
Speaker Change: We also hosted Global Gaming League's inaugural event, Everybody Games, a private gathering that brought together celebrities, fashion, and entertainment to celebrate gaming's widespread appeal.
Speaker Change: Other notable events included the Southern Glazers product launch party, a team outing for the Charlotte Hornet, and an eSports with the Air Force event.
Speaker Change: On Labor Day, we hosted a Netflix live special event featuring an unforgettable hotdog eating contest between world-famous competitors Joey Chestnut and Takeru Kobayashi.
Speaker Change: co-hosted by actor Rob Riggle and WWE Hall of Famer Nikki Garcia.
Our OMEN Mobile Arena experienced its busiest quarter since 2023.
Speaker Change: Kicking off with two of the 15 scheduled stops in the Rally Cry Championship Tour, a hybrid tournament based on the highly anticipated return of EA College Football 2025.
Speaker Change: Additionally, our mobile arena helped Logitech launch its Pro Leon peripherals in San Jose, California, and conducted a very popular CS2 Supergirl tournament in Oceanside, California, featuring some of the world's most competitive all-female CSGO teams.
Speaker Change: It is exciting to see global brands and major productions, like Netflix, make full use of our unique space, fully equipped with streaming and production capabilities for diverse events beyond esports.
Speaker Change: We are very optimistic about expanding our target market and audience even further.
Speaker Change: Now let's dive into the exciting progress we've made with the World Marjong Tour, WMT, as we further develop its schedule and format.
Speaker Change: The first season will kick off with two satellite events, one in Los Angeles and the other in Beijing, where we expect significant interest building up to the finale.
Speaker Change: Winners of this event will earn a coveted spot in the WMT Las Vegas finale to be held at the HyperX Arena in early February, featuring a 100,000 prize pool, the largest ever for Mahjong in North America.
Speaker Change: This grand finale will coincide with the Lunar New Year Festival in Las Vegas, and in partnership with the Las Vegas Convention and Visitors Authority, will highlight WMT as one of the festival's star attractions.
Speaker Change: Airline Experiential Entertainment, AEE, is thrilled to announce that we will be co-hosting our proprietary RhythmX Music Festival in Macau.
Speaker Change: in partnership with the renowned Strawberry Music Festival, a 15-year music festival brand in October 2025.
Speaker Change: This three-day event will feature global music artists, and our goal is to develop this festival into a landmark event that will be recognized as the Summersonic of Macau.
attracting audiences and artists from around the world.
We anticipate making this festival an annual event moving forward.
Let's move on to Ally Mobile Entertainment, AME.
Speaker Change: Our strategic investment in ZTECH, a leading developer and operator of casual mobile games, continues to gain traction, though progress has been slightly slower than anticipated.
Speaker Change: During this quarter, we launched two new casual mobile games to expand our gaming portfolio.
Yellow liver is highly synergistic with a G and the agreement demonstrates they believe in our strategic priorities moving forward.
Speaker Change: In addition to the financial investment you lose that will provide us with strategic resources.
Speaker Change: Networking opportunities and industry expertise that will be extremely valuable as the company events is its strategic initiatives forward.
Speaker Change: As part of the investment Yellow River received one that we're highly incentivized them to partner with us on different initiatives that will help accelerate our growth.
Speaker Change: I will now turn the call over to our CFO, what Anderson to provide updates on our Q3 financials.
Anderson: Thank you Yang walk good afternoon, everyone and thank you for joining us today.
Anderson: Total revenues for the third quarter of 2024 or $2 2 million.
Anderson: 93% from the third quarter of 2023.
The increase in year over year revenue was primarily due to higher casual mobile gaming revenues with <unk> integrated into the business as well as an increase in in person revenues following strong demand at both the Hyperx and open mobile arenas.
Anderson: Total costs and expenses for the third quarter with $3.3 million, an increase from $1 8 million in the prior year period.
Anderson: The increase in costs and expenses were also primarily driven by our investment in <unk> in the fourth quarter of 2023.
Anderson: Along with an employee retention credit that was received and recorded as a reduction of payroll tax expense in the prior year period.
Anderson: These increases were partially offset by a D&O insurance reimbursement and professional fees related to prior year M&A activities.
Anderson: Our net loss was 4.0 a million for the third quarter of 2024 compared to net income of 0.1 million in the third quarter of 2023.
The result was impacted by a $3 million loss on our settlement of a 2020 escrow agreement with BP or Cumulus LLC as well as a $1 2 million.
Anderson: Net unrealized loss on loans payable and receivable any foreign currency.
Anderson: These charges were partially offset by a zero point $3 million increase in interest income.
Anderson: Most all of the net unrealized foreign currency transaction loss was recovered a reversed in October 2024.
Anderson: Adjusted EBITDA loss was zero point $1 million and improved from a loss of zero point $3 million in the third quarter of 2023.
Anderson: Adjusted the beta includes adjustments for depreciation and amortization of fixed and intangible assets stock based compensation nonrecurring legal fees.
Anderson: Unrealized foreign currency transaction losses and interest income.
Anderson: Okay.
Now moving onto our balance sheet at September 30 of 2024, our cash and short term investments position totaled $82 million compared to $78 6 million at December 31, 2023.
Anderson: The company's working capital surplus defined as current assets minus current liabilities was $62 8 million at September 30 of 2024 compared to $66 4 million at December 31 2023.
Anderson: Our cash and working capital positions were impacted by the aforementioned settlement agreement with BP are under which $5 million of escrowed funds under a 2020 share purchase agreement where were redistributed.
Anderson: With BP are receiving 3 million of these funds and a G E receiving the remaining $2 million.
Speaker Change: I will now turn the call back over to you anymore.
Ray: Thank you Ray.
Ray: We continue to lay the foundation for our business to capitalize on the significant assets available to us.
Speaker Change: As we gear up for the previous season off the World Mahjong Tour starting next month.
Speaker Change: Launch more new mobile game titles and generate growing demand at our high breast arena and omen mobile arena.
We're poised to see substantial progress impacting both the top and bottom lines umbrella company.
Speaker Change: Thank you for your time today, we look forward to speaking with you again, when we release, our fourth quarter and full year 2024 results in March.
That concludes today's conference. Thank you for joining US you may now disconnect your lines.
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