Q1 2025 Super League Enterprise Inc Earnings Call
Statements within the meaning of applicable securities laws.
These statements involve material risks and uncertainties and actual results could differ from those projected in any forward looking statements due to numerous factors.
For a description of these risks and uncertainties. Please see Super League's financial statements and MD&A for the first quarter ended March 31, 2025 available on Edgar.
Important qualifications regarding forward looking statements are also contained in <unk> earnings release distributed earlier this afternoon and also available on Edgar.
Furthermore, the content of this conference call contains time sensitive information accurate only as of today may 15th 2025 Super League undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances. After the date of this call.
Speaker Change: I would now like to turn the conference call over to Matt Eichmann, President and Chief Executive Officer, Matt. Please go ahead.
Matt Eichmann: Thank you so much Kevin good afternoon, and evening, everybody I am pleased to be here to report on Super League's first quarter financial results and provide you with a company update.
Matt Eichmann: First and most important as outlined in our Q4 conference call just a little over a month ago.
Matt Eichmann: We are on track with our plan to be EBITDA positive in Q4 2025.
Matt Eichmann: We're committed to that result, and diligently implementing the operational changes to ensure we get there.
Sensitive information and accurate only as of today may 15th 2025.
Matt Eichmann: While we plan to hit our revenue and gross margin goals.
Matt Eichmann: As I will explain we have achieved in Q1 I assure you that if we stumble we've.
Super League undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances. After the date of this call.
Matt Eichmann: We'll work to make the necessary adjustments to keep us on track and demonstrate that our day to day business can be financially healthy.
Speaker Change: I'd now like to turn the conference call over to Matt Eichmann, President and Chief Executive Officer, Matt. Please go ahead.
Matt Eichmann: Super League sits at the thriving intersection of interactive entertainment and advertising consumers.
Matt Eichmann: Thank you so much Kevin good afternoon, and evening, everybody I am pleased to be here to report on Super League's first quarter financial results and provide you with a company update.
Matt Eichmann: Consumers spend extraordinary amount of time at that intersection consuming playable content or in other words, playing video games.
Matt Eichmann: Average daily time spent by members of generation Z and generation Alpha you can think of it as everyone under the age of 30.
Speaker Change: First and most important as outlined in our Q4 conference call just a little over a month ago.
Matt Eichmann: And 88 five minutes across mobile games, roadblocks, Fortnite and Minecraft combined.
Speaker Change: We are on track with our plan to be EBITDA positive in Q4 2025.
Speaker Change: We are committed to that result, and diligently implementing the operational changes to ensure we get there.
That exceeds the combined 59, six daily minutes spent across Tictoc Youtube Instagram Facebook and acts.
Speaker Change: While we plan to hit our revenue and gross margin goals.
Matt Eichmann: To us and our clients and partners people, who play video games are not just gamers there.
I will explain we have achieved in Q1.
Speaker Change: I assure you that if we stumble we will work to make the necessary adjustments to keep us on track and demonstrate that our day to day business can be financially healthy.
Matt Eichmann: Our audiences audiences who play.
Matt Eichmann: They're teenagers who love the outdoors.
Matt Eichmann: The 20 somethings, who are just starting out in their careers. They are millennial parents trying to make summer plans for their kids.
Speaker Change: Similarly sits at the thriving intersection of interactive entertainment and advertising.
Speaker Change: Consumers spend extraordinary amount of time at that intersection consuming playable content or in other words, playing video games.
Matt Eichmann: Or even grandparents, who wants to connect with their grandchildren.
Audiences, who play are as ubiquitous and broad as audiences, who binge chose on streaming platforms listen to podcasts go to concerts and follow sports teams quick shout out to New York next by the way.
Average daily time spent by members of generation Z and generation Alpha you can think of it as everyone under the age of 30.
Speaker Change: And 88 five minutes across mobile games, roadblocks, Fortnite and Minecraft combined.
Matt Eichmann: Almost everyone. You know is a player eight.
Matt Eichmann: 85% of consumers gain 94% of that Alpha <unk>, 92% of Gen Z, 88% of millennials, even 60% of Gen X.
Speaker Change: That exceeds the combined 59, six daily minutes spent across Tictoc Youtube Instagram Facebook and acts.
Speaker Change: To us and our clients and partners people, who play Videogames are not just gamers their audiences audiences who play.
Speaker Change: Super League knows how to reach and engage audiences, who play because we understand the importance to these audiences of liability.
Speaker Change: They're teenagers love the outdoors.
Speaker Change: When a person is in play mode. They are focused they are active they are content consumption has a purpose they.
Speaker Change: 20, something soon are just starting out in their careers.
Speaker Change: Plenty of parents trying to make summer plans for their kids.
Speaker Change: They don't want to be interrupted with a video ad or a billboard or a text alert about a product that's on sale or a politician looking for donations.
Speaker Change: They are even grandparents, who wants to connect with their grandchildren.
Speaker Change: Audiences, who play are as ubiquitous and broad as audiences, who been shows on streaming platforms listen to podcasts go to concerts and follow sports teams.
Speaker Change: That's why we focus on playable meeting.
Speaker Change: Ads and content that are an extension of the play experience and it works.
Speaker Change: A quick shout out to New York next by the way.
Speaker Change: The average time, a consumer spends with a brand through ads on Tictoc is 15 seconds.
Speaker Change: Almost everyone you know is a player.
Speaker Change: 85% of consumers gain 94% of Gen Alpha 92% of Gen Z, 88% of millennials, even 60% of Gen X.
Speaker Change: Roadblocks for example, the average time spent with playable media and content ranges from one 5% to 11 minutes.
Speaker Change: Our playable mobile ads generated click through rate at a 7% to 10 times higher that standard digital standard digital video ads in the same type of AD inventory inventory.
Speaker Change: Super League knows how to reach and engage audiences, who play because we understand the importance to these audiences of liability.
Hearing all of this powerful data.
Speaker Change: When a person is in play mode. They are focused they are active they are content consumption.
Speaker Change: I would be asking.
Speaker Change: Why Super League or perhaps why the intersection of interactive entertainment and advertising is not already accelerating at warp speed.
Speaker Change: Purpose, they don't want to be interrupted with a video ad or a billboard or a text alert about a product that's on sale or a politician looking for donations.
Speaker Change: While it will sound cliche. The answer is that the industry is still in an early stage of development.
Speaker Change: That's why we focus on playable media.
Speaker Change: Ads and content that are an extension of the play experience and it works.
Speaker Change: Brands and media agencies have grown accustomed to specific types of measurement and attribution to justify which advertising and customer acquisition acquisition strategies deserve more investment.
Speaker Change: The average time, a consumer spends with a brand through ads on Tictoc is 15 seconds on roadblocks. For example, the average time spent with payable media and content ranges from one 5% to 11 minutes.
Speaker Change: Gaming platforms do not yet deliver the complete suite of capabilities that are available and other digital channels. Although the industry is making impressive progress mark most recently by roadblocks as announcement, but there are new rewarded video AD format will soon be able to be purchased through Google's ad solutions.
Speaker Change: Our playable mobile ads generated click through rate at a 7% to 10 times higher that standard digital standard digital video ads in the same type of AD inventory inventory.
Speaker Change: Hearing all of this powerful data.
Speaker Change: Marketing dollars always follow consumers, but brands do not move quickly.
I would be asking.
Speaker Change: Why Super League or perhaps why the intersection of interactive entertainment and advertising is.
Speaker Change: Lee Super League continues to gain the trust of dozens of iconic brands every year, which puts us at the forefront of this important space.
Speaker Change: It is not already accelerating at warp speed.
Speaker Change: While it will sound cliche. The answer is that the industry is still in an early stage of development.
Speaker Change: We are one of the leaders in making brands playable and we will be one of the winners.
Brands and media agencies have grown accustomed to specific types of measurement and attribution to justify which advertising and customer acquisition acquisition strategies deserve more investment.
Speaker Change: I'd like to share some of our recent successes starting with one of our longest standing partners, who remains a pioneer in making their brand playable chipotle.
Speaker Change: Our partnership with Chipotle is in its fourth year and is rooted in our hands on strategic approach.
Speaker Change: Gaming platforms do not yet deliver the complete suite of capabilities that are available and other digital channels. Although the industry is making impressive progress mark most recently by roadblocks as announcements, but theyre new rewarded video AD format will soon be able to be purchased through Google's ad solutions.
Speaker Change: We have delivered seven projects, including five can super consumer facing campaigns, some of which have one innovation awards.
Speaker Change: We have delivered multiple first captured in headlines such as Chipotle being the first <unk> to launch a new ingredient and the metal versus where the first <unk> debut a new television AD and the members.
Speaker Change: Marketing dollars always follow consumers, but brands do not move quickly.
Speaker Change: Thanks, Lee simply continues to gain the trust of dozens of iconic brands every year, which puts us at the forefront of this important space.
Speaker Change: Our most recent experience became the number one trending game on roadblocks on the robots platform and broke into the top 75, most visited games with consumers rolling $1 $2 7 million virtual burritos and the first day.
Speaker Change: We are one of the leaders in making brands playable and we will be one of the winners.
Operator: include forward-looking statements within the meaning of applicable security laws. These statements involve material risks and uncertainties, and actual results could differ from those projected in any forward-looking statements due to numerous factors. For a description of these risks and uncertainties, please see Super League's financial statements and MD&A for the first quarter ended March 31st, 2025, available on EDGAR.
Speaker Change: I'd like to share some of our recent successes starting with one of our longest standing partners, who remains a pioneer in making their brand playable chipotle.
Speaker Change: And redeeming 50000 codes for free real world Burritos and less than three hours.
Speaker Change: Consistent with our past efforts the program contributed to mobile App downloads and mobile food food order revenues for Chipotle.
Speaker Change: Our partnership with Chipotle is in its fourth year and is rooted in our hands on strategic approach.
Speaker Change: We have delivered seven projects, including five can super consumer facing campaigns, some of which have one innovation awards.
Speaker Change: Players spent 15 minutes and the experience on average, which we've been told is longer than the average amount of time spent per visit to a chipotle restaurant.
Operator: Important qualifications regarding forward-looking statements are also contained in Super League's earnings release distributed earlier this afternoon and also available on edX Furthermore, the content of this conference call contains time-sensitive information accurate only as of today, May 15, 2025. Super League undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call.
Speaker Change: We have delivered multiple <unk> captured in headlines such as Chipotle being the first <unk> to launch a new ingredient and the metal versus where the first <unk> debut a new television AD and the members.
Speaker Change: Another Superfund program in one of our most ambitious so far this year is with Gogo squeeze we could not ask for a brand with a more perfect message.
Speaker Change: There is no right way to play just like there is no right latest snack.
Speaker Change: Our most recent experience became the number one trending game on roadblocks on the robots platform and broke into the top 75, most visited games with consumers Rolling 1.2 dollars 7 million virtual burritos and the first day.
Speaker Change: Based on that statement. It is fitting that this campaign is running across multiple platforms, including mobile games, Minecraft tick tock and Youtube.
Matthew Edelman: I'd now like to turn the conference call over to Matt Edelman, President and Chief Executive Officer. Matt, please go ahead. Thank you so much, Kevin. Good afternoon and evening, everybody. I am pleased to be here to report on Super League's first quarter financial results and provide you with a company update. First and most important, as outlined in our Q4 conference call just a little over a month ago, we are on track with our plan to be EBITDA positive in Q4 2025. We are committed to that result and diligently implementing the operational changes to ensure we get there.
Speaker Change: Primary features include Gogo squeeze many games and interactive characters and Minecraft as well as playable mobile ads.
Speaker Change: And redeeming 50000 codes for free real world Burritos and less than three hours.
Speaker Change: Most exciting if it isn't the first time Gogo squeezed as running a program to reach younger audiences with all previous campaigns, having been pairing focus.
Speaker Change: Consistent with our past efforts the program contributed to mobile App downloads and mobile food order revenues for Chipotle.
Speaker Change: Players spent 15 minutes and the experience on average, which we've been told is longer than the average amount of time spent per visit to a chipotle restaurant.
Speaker Change: In Q1, we also delivered a mini game arcade for Logitech and multiple roadblocks experiences.
Speaker Change: And reached Gen Alpha and Gen Z audiences through mobile playable ads for brands as diverse as Hasbro and accounting plus yes, we ran a playable media campaign to inspire accounting as a career choice.
Speaker Change: Another Superfund program in one of our most ambitious so far this year is with Gogo squeeze.
Speaker Change: Could not ask for a brand with a more perfect message.
Speaker Change: There is no right way to play just like there is no right way to snack.
Speaker Change: Perhaps most interestingly the opportunity to build the roadblocks world for Googles be Internet Awesome campaign based on the largest curriculum talk globally on Internet safety for young students that was recently demo owed in person to congressional staffers in Washington D C.
Matthew Edelman: While we plan to hit our revenue and gross margin goals, as I will explain we have achieved in Q1, I assure you that if we stumble, we will work to make the necessary adjustments to keep us on track and demonstrate that our day-to-day business can be financially healthy. Super League sits at the thriving intersection of interactive entertainment and advertising. consumers spend extraordinary amounts of time at that intersection, consuming playable content, or in other words, playing video games. Average daily time spent by members of Generation Z and Generation Alpha. You could think of it as everyone under the age of 30.
Speaker Change: Based on that statement. It is fitting that this campaign is running across multiple platforms, including mobile games, Minecraft tick tock and Youtube.
Speaker Change: Primary features include Gogo squeeze many games interactive characters and minecraft as well as playable mobile ads most.
Speaker Change: Now I'd like to talk about <unk> Q1 results.
Speaker Change: As I mentioned at the start we are implementing the realignment plan articulated during my discussion with our executive chair and hand on our Q4 2024 earnings call.
Speaker Change: Most exciting if this isn't the first time Gogo squeeze is running a program to reach younger audiences with all previous campaigns, having been pairing focus.
Speaker Change: It consists of three main pillars, reducing and controlling our costs are.
Speaker Change: In Q1, we also delivered a mini game arcade for Logitech and multiple roadblocks experiences.
Speaker Change: Q1 operating expense decreased approximately 25% compared to Q1 in the prior year.
Speaker Change: Reached Gen Alpha and Gen Z audiences through mobile playable ads for brands as diverse as Hasbro and accounting plus yes, we ran a playable media campaign to inspire our accounting as a career choice.
Matthew Edelman: is 88 and a half minutes across mobile games, Roblox, Fortnite, and Minecraft combined. that exceeds the combined 59.6 daily minutes spent across TikTok, YouTube, Instagram, Facebook, and X. To us and our clients and partners, people who play video games are not just gamers. They are audiences, audiences who play. They're teenagers who love the outdoors. the 20-somethings who are just starting out in their careers. They are millennial parents trying to make summer plans for their kids. There are even grandparents who want to connect with their grandchildren. Audiences who play are as ubiquitous and broad as audiences who binge shows on streaming platforms, listen to podcasts, go to concerts, and follow sports teams. A quick shout out to New York Knicks, by the way.
Speaker Change: This has continued into Q2 with staff reductions and a decrease in executive team compensation.
Speaker Change: Collectively we have further reduced our operating cost this year by approximately 30%.
Speaker Change: Perhaps most interestingly the opportunity to build a roadblocks world for Google's be Internet Awesome campaign based on the largest curriculum talk globally on Internet safety for young students that was recently demo owed in person through congressional staffers in Washington D C.
Speaker Change: Number two increasing and maintaining our gross margin by focusing on higher margin programs.
Speaker Change: Our Q1 gross margin increased to 44% from 38% for fiscal year 2024.
Speaker Change: Now I would like to talk about <unk> Q1 results.
Speaker Change: Number three diversifying our revenue to reduce exposure to strategy or policy changes instituted by major platforms are the unpredictable pace of advancement and the efficacy of their advertising solutions.
Speaker Change: As I mentioned at the start we are implementing the realignment plan articulated during my discussion with our executive chair and hand on our Q4 2024 earnings call.
Speaker Change: Our expansion into mobile continues to excite partners with mobile representing a steady 15% of our revenue in Q1.
Speaker Change: It consists of three main pillars, reducing and controlling our costs are.
Speaker Change: Q1 operating expense decreased approximately 25% compared to Q1 in the prior year.
Speaker Change: We expect mobile to grow to at least 25% of our total revenue in 2025.
Matthew Edelman: Almost everyone you know is a player. 85% of consumers gain, 94% of Gen Alpha, 92% of Gen Z, 88% of millennials, even 60% of Gen X. Super League knows how to reach and engage audiences who play because we understand the importance to these audiences of playability. When a person is in play mode, they are focused. They are active. Their content consumption as a. They don't want to be interrupted with a video ad or a billboard or a text alert about a product that's on sale or a politician looking for donations. That's why we focus on playable.
Speaker Change: This has continued into Q2 with staff reductions and a decrease in executive team compensation.
Speaker Change: The good news about our Q1 revenue is that we met our internal goals.
Speaker Change: Collectively we have further reduced our operating cost this year by approximately 30%.
Speaker Change: Goals that give us ongoing confidence in becoming EBITDA positive in Q4.
Speaker Change: Number two increasing and maintaining our gross margin by focusing on higher margin programs.
Speaker Change: The less good news is that our goals, we're self aware following the shift in our roadblocks business in the second half of 2024.
Speaker Change: Q1, gross margin increased to 44% from 38% for fiscal year 2024.
Speaker Change: Which as a reminder resulted from the changes in how roblox determined they needed to grow their advertising revenue directly.
Speaker Change: Number three diversifying our revenue to reduce exposure to strategy or policy changes instituted by major platforms or the unpredictable pace of advancement and the efficacy of their advertising solutions.
Speaker Change: Despite the revenue decline our Q1 revenue our Q1 2025 net loss decreased 20% compared to Q1 2024.
Speaker Change: Looking ahead, our revenue pipeline remains strong with approximately $20 million in active opportunities across 97 unique programs evenly split between new and returning partners with an average deal size of approximately $200000.
Speaker Change: Our expansion into mobile continues to excite partners with mobile representing a steady 15% of our revenue in Q1.
Matthew Edelman: ads and content that are an extension of the play experience. and it works. The average time a consumer spends with a brand through ads on TikTok is 15 seconds. On Roblox, for example, the average time spent with playable media and content ranges from one and a half to eleven minutes. Our playable mobile ads generate a click-through rate that is 7 to 10 times higher than standard digital video ads in the same type of ad inventory. hearing all this powerful data. I would be asking. why Super League or perhaps why the intersection of interactive entertainment and advertising is not already accelerating at warp speed.
Speaker Change: We expect mobile to grow to at least 25% of our total revenue in 2025.
Speaker Change: We continued to deploy various strategies to secure financing both to support operational needs and to advance targeted strategic opportunities.
Speaker Change: The good news about our Q1 revenue is that we met our internal goals.
Speaker Change: Our goal is to give us ongoing confidence in becoming EBITDA positive in Q4.
Speaker Change: The less good news is that our goals, we're self aware following the shift in our roadblocks business in the second half of 2024.
Speaker Change: As you May know, we recently acquired Super Social and award winning Roadblock studio with clients include.
Speaker Change: Including Gucci beauty, Walmart Universal music and more.
Speaker Change: Which as a reminder resulted from the changes in how roblox determined they needed to grow their advertising revenue directly.
Speaker Change: It's just that one deal we now have a roblox business that has delivered 49 immersive builds racking up more than 390 million visits and 3 billion impressions on the platform.
Speaker Change: Despite the revenue decline our Q1 revenue our Q1 2025 net loss decreased 20% compared to Q1 2024.
Speaker Change: We believe there will be further industry consolidation.
Matthew Edelman: While it will sound cliche, the answer is that the industry is still in an early stage of development. Brands and media agencies have grown accustomed to specific types of measurement and attribution to justify which advertising and customer acquisition strategies deserve more investment. Gaming platforms do not yet deliver the complete suite of capabilities that are available in other digital channels. Although the industry is making impressive progress, marked most recently by Roblox's announcement that their new rewarded video ad format will soon be able to be purchased through Google's ad solution. Marketing dollars always follow consumers, but brands do not move quickly.
Speaker Change: Looking ahead, our revenue pipeline remains strong with approximately $20 million in active opportunities across 97 unique programs evenly split between new and returning partners with an average deal size of approximately $200000.
Speaker Change: And see additional exciting opportunities with companies that can accelerate our path to EBITDA positive through clear revenue and cost synergies.
Speaker Change: We will remain disciplined in our focus only on opportunities that are accretive.
Speaker Change: They can also reinforces <unk> position as a leader in the playable media space.
Speaker Change: We continue to deploy various strategies to secure financing both to support operational needs and to advance targeted strategic opportunities.
Kevin: Kevin Let's now please move to Q&A.
Speaker Change: Thank you and I will be conducting a question and answer session.
Speaker Change: As you May know, we recently acquired Super Social and award winning Roadblock studio with clients <unk>.
Speaker Change: To ask a question you may do so by using the Ranger, having function over the web or over the phone. Please press star one to be placed in the question queue. Once again Thats star one to be placed in the question queue or raise your hand function on the webcast. Our first question today is coming from Howard Halpern. Your line is now live.
Speaker Change: Including Gucci beauty, Walmart Universal music and more.
Speaker Change: It's just that one deal we now have a roblox business that has delivered 49 immersive builds racking up more than 390 million visits and 3 billion impressions on the platform.
Matthew Edelman: Thankfully, Super League continues to gain the trust of dozens of iconic brands every year, which puts us at the forefront of this important space.
Speaker Change: We believe there will be further industry consolidation and see additional exciting opportunities with companies that can accelerate our path to EBITDA positive through clear revenue and cost synergies.
Speaker Change: Hi.
Matthew Edelman: We're one of the leaders in making brands playable and we will be one of the winners.
Speaker Change: Nice to talk to you we are.
Speaker Change: <unk> turnaround here, but.
Matthew Edelman: I'd like to share some of our recent successes, starting with one of our longest standing partners who remains a pioneer in making their brand playable, Chipotle. Our partnership with Chipotle is in its fourth year and is rooted in our hands-on strategic approach. We have delivered seven projects, including five consumer-facing campaigns, some of which have won innovation awards. We've delivered multiple firsts, captured in headlines, such as Chipotle being the first QSR to launch a new ingredient in the metaverse, or the first QSR to debut a new television ad in the metaverse. Our most recent experience became the number one trending game on the Roblox platform and broke into the top 75 most visited games with consumers rolling 1.27 million virtual burritos in the first day and redeeming 50,000 codes for free real-world burritos in less than three hours.
Speaker Change: In terms of the acquisition that you just made.
Speaker Change: We will remain disciplined in our focus only on opportunities that are accretive and they can also reinforced it with its position as a leader in the playable media space.
Speaker Change: What does that say to other potential.
Speaker Change: Targets that you were able to acquire something leverage it and immediately make it accretive for everybody.
Kevin: Kevin Let's now please move to Q&A.
Kevin: Thank you, we'll now be conducting a question answer session.
Speaker Change: Well I think it shows that we have in.
Speaker Change: To ask a question you may do so by using the range of hand function over the web or over the phone. Please press star one to be placed in the question queue. Once again Thats star one to be placed in the question queue or raise your hand function or the webcast. Our first question today is coming from Howard Halpern. Your line is now live.
Speaker Change: An executive team and infrastructure within the company that can help support.
Speaker Change: Opportunities for inorganic growth and so if there are companies.
Speaker Change: That have an interest in being part of something bigger and accelerating their growth by doing so they can.
Kevin: Hi.
It's a nice to talk to you.
Speaker Change: Likely have faith that Super League would be a good partner and a good home for their people their employees and the growth of their business.
Kevin: Dash turnaround here, but yes.
Kevin: In terms of the acquisition that you just made.
Speaker Change: What does that say to other potential.
Speaker Change: And the recent.
Speaker Change: You know.
Targets that you're able to.
Speaker Change: Equity raise does that give you enough wiggle room do you believe too.
Matthew Edelman: Consistent with our past efforts, the program contributed to mobile app downloads and mobile food order revenues for Chipotle. players spent 15 minutes in the experience on average, which we've been told is longer than the average amount of time spent per visit to a Chipotle restaurant.
Speaker Change: Higher something leverage it and immediately make it accretive for everybody.
Speaker Change: Get to your breakeven that you want to buy the fourth quarter or do you still might need a little extra boost in there.
Speaker Change: Well I think it shows that we have an.
Speaker Change: An executive team and infrastructure within the company that can help support.
Speaker Change: I think we are.
Speaker Change: We're still going to pursue capital raise opportunities in the coming.
Matthew Edelman: Another super fun program and one of our most ambitious so far this year is with Go Go Squeeze. We could not ask for a brand with a more perfect message. There is no right way to play, just like there is no right way to smash. Based on that statement, it is fitting that this campaign is running across multiple platforms, including mobile games, Minecraft, TikTok, and YouTube. Primary features include go-go squeeze minigames, interactive characters in Minecraft, as well as playable mobile ads. Most exciting, this is the first time Go Go Squeeze is running a program to reach younger audiences.
Speaker Change: Opportunities for inorganic growth and so if there are companies.
Speaker Change: Months and at the right times during this year.
Speaker Change: That have an interest in being part of something bigger and accelerating their growth by doing so they can.
Speaker Change: All the while still heading towards that EBITDA positive outcome in Q4.
Speaker Change: Okay.
Speaker Change: Likely have faith that Super League would be a good partner and a good home for their people their employees and the growth of their business.
Speaker Change: And one last one are you seeing different.
Speaker Change: Agencies now now that you're.
Speaker Change: Focused on the play part in the mobile part or the different agencies that are coming to you or newer agencies even for a.
Speaker Change: And the recent.
Speaker Change: Uh huh.
Speaker Change: Equity raise does that give you enough wiggle room do you believe too.
Speaker Change: Potential new customers.
Speaker Change: That's a great question I appreciate you asking it the answer is absolutely our expansion into mobile has really opened up the aperture of opportunities for Super League.
Speaker Change: Get to your breakeven that you want to buy the fourth quarter or do you still might need a little extra boost in there.
Matthew Edelman: with all previous campaigns having been parents. In Q1, we also delivered a mini game arcade for Logitech and multiple Roblox experiences and reached Gen Alpha and Gen Z audiences through mobile playable ads for brands as diverse as Hasbro and Accounting Plus. Yes, we ran a playable media campaign to inspire accounting as a career choice.
Speaker Change: I think we are.
Speaker Change: The demographic audiences and audience segments available through mobile are much more diverse and broad.
Speaker Change: We're still going to pursue capital raise opportunities in the coming.
Speaker Change: Months and at the right times during this year.
Speaker Change: Really every filter than the audiences.
Speaker Change: All the while still heading towards that EBITDA positive outcome in Q4.
Matthew Edelman: Perhaps most interestingly, the opportunity to build a Roblox world for Google's Be Internet Awesome campaign based on the largest curriculum taught globally on Internet safety for young students that was recently demoed in person to congressional staffers in Washington, D.C.
Speaker Change: Within the immersive platforms and as a result, our conversations have expanded quite a bit with agencies and brands, who believe in the power of play and the opportunities to achieve engagement with their customer base through playable media.
Speaker Change: Okay.
Speaker Change: And one last one are you seeing different.
Speaker Change: Agencies now now that you.
Speaker Change: Focus on the play part in the mobile part or the different agencies that are coming to you or newer agencies even for.
Matthew Edelman: Now I'd like to talk about Super League's Q1 results. As I mentioned at the start, we are implementing the realignment plan articulated during my discussion with our executive chair, Ann Hand, on our Q4 2024 earnings call. It consists of three main pillars. reducing and controlling our costs. Our Q1 operating expense decreased approximately 25% compared to Q1 in the prior year. This has continued into Q2 with staff reductions and a decrease in executive team compensation. Collectively, we have further reduced our operating costs this year by approximately 30%. Number two, increasing and maintaining our gross margin by focusing on higher margin programs. our Q1 gross margin increased to 44% from 38% for fiscal year 2024.
Speaker Change: Okay, well, thanks, and keep up the great work to start and it looks like it's a good start so far.
Speaker Change: Potential new customers.
Speaker Change: Appreciate that thank you Howard.
Speaker Change: That's a great question I appreciate you asking it the answer is absolutely our expansion into mobile has really opened up the aperture of opportunities for Super League.
Speaker Change: Thank you. Our next question is coming from Jack Cordero from Maxim Group. Your line is now live.
Erik: Hi, This is Jack could Erik calling in for Jack vendor art. Thanks for taking my questions.
Speaker Change: The demographic audiences and audience segments available through mobile are much more diverse and broad.
Speaker Change: Just one quick question about macro in the press release had mentioned macro headwinds.
Speaker Change: Can you touch on how this is going to impact your business. How maybe you are working to.
Speaker Change: Really every filter than the audiences.
Speaker Change: Within the immersive platforms and as a result, our conversations have expanded quite a bit with agencies and brands who.
<unk> passed that any color there would be helpful.
Speaker Change: Of course, I think the real question that is not yet answered is what might happen.
Speaker Change: Believe in the power of play and the opportunities to achieve engagement with their customer base through playable media.
Speaker Change: Marketing and advertising budgets.
Speaker Change: Due to some of the economic uncertainty.
Matthew Edelman: Number three, diversifying our revenue to reduce exposure to strategy or policy changes instituted by major platforms or the unpredictable pace of advancement in the efficacy of their advertising solution. Our expansion into mobile continues to excite partners with mobile representing a steady 15% of our revenue in Q1. We expect mobile to grow to at least 25% of our total revenue in 2025. The good news about our Q1 revenue is that we met our internal goals. the goals that give us ongoing confidence in becoming EBITDA positive in Q4. The less good news is that our goals were self-aware following the shift in our Roblox business in the second half of 2024.
Speaker Change: Okay well thanks.
Speaker Change: Weighted to the macro climate at.
Speaker Change: Keep up the great work to start and it looks like it's a good start so far.
Speaker Change: At the moment, we are not seeing.
Speaker Change: A lot of evidence that budgets are going to be cut.
Howard Halpern: Appreciate that thank you Howard.
Speaker Change: We are seeing some evidence that they are being delayed.
Speaker Change: Thank you. Our next question is coming from Jack Cordero from Maxim Group. Your line is now live.
Speaker Change: So for us the real focus is making sure that we're still putting the right solutions in front of our existing and new partners to make sure that as those budgets are deployed they are deployed through solutions, we bring to the table.
Jack Cordero: Hi, This is Jack could Erik calling in for Jack Vander Ark, Thanks for taking my questions.
Jack Cordero: Just one quick question about macro in the press release had mentioned macro headwinds.
Jack Cordero: Can you touch on how this is going to impact your business, how maybe you're working to.
Speaker Change: Okay. That's very helpful. And then maybe pick it back up to a prior question.
Jack Cordero: Evolve past that any color there would be helpful.
Jack Cordero: Of course, I think the real question that is not yet answered is what might happen.
Speaker Change: Given that your mobile games has already grown to 15% of revenues.
Matthew Edelman: which, as a reminder, resulted from the changes in how Roblox determined they needed to grow their advertising revenue direct. Despite the revenue decline, our Q1 2025 net loss decreased 20% compared to Q1 2024. Looking ahead, our revenue pipeline remains strong, with approximately $20 million in active opportunities across 97 unique programs. Evenly split between new and returning partners, with an average deal size of approximately $200,000. We continue to deploy various strategies to secure financing, both to support operational needs and to advance targeted strategic opportunities.
Speaker Change: You have any visibility or expectation of what that will progress maybe by the end of the year and kind of going forward, how big of a chunk of the business is that going to be.
Jack Cordero: With marketing and advertising budgets.
Jack Cordero: Due to some of the economic uncertainty.
Jack Cordero: Related to the current macro climate.
Speaker Change: We think that mobile will represent at least 25% of our revenue in 2025.
Jack Cordero: At the moment, we are not seeing.
Jack Cordero: A lot of evidence that budgets are going to be cut.
Speaker Change: And and we're on a nice pace.
Jack Cordero: We are seeing some evidence that they are being delayed.
Speaker Change: To get there and I'm very excited about.
Jack Cordero: So for us the real focus is making sure that we're still putting the right solutions in front of our existing and new partners to make sure that as those budgets are deployed they are deployed through solutions, we bring to the table.
Speaker Change: How it's developing.
Speaker Change: Okay very helpful and then.
Speaker Change: One last question for me.
Speaker Change: You touch a little bit more on the strategic importance of the Super Social acquisition and then any.
Speaker Change: Any other additional color on your broader thoughts on the M&A landscape would be helpful. Thank you.
Speaker Change: Okay. That's very helpful. And then maybe pick it back up to a prior question.
Matthew Edelman: As you may know, we recently acquired SuperSocial, an award-winning Roblox studio with clients including Gucci, Elf Beauty, Walmart, Universal Music, and more. With just that one deal, we now have a Roblox business that has delivered 49 immersive builds, racking up more than 390 million visits and 3 billion impressions on the platform.
Speaker Change: Given that your mobile games has already grown to 15% of revenues.
Speaker Change: Of course Super social.
Speaker Change: It's been one of many frenemies that we have within the roadblocks ecosystem in particular there are.
Speaker Change: You have any visibility or expectation of what that will progress maybe by the end of the year and kind of going forward, how big of a chunk of the business is that going to be.
Speaker Change: Perhaps eight to 10 companies, who have effectively grown up together as it relates to roblox.
Speaker Change: We think that mobile will represent at least 25% of our revenue in 2025.
Speaker Change: And each has found a bit of their own space and their own niche and theyre actually partnerships that a lot of us have engaged in over time to help each other super social as a company we've been close with for several years.
Matthew Edelman: We believe there will be further industry consolidation and see additional exciting opportunities with companies that can accelerate our path to EBITDA positive through clear revenue and cost synergy. We will remain disciplined in our focus only on opportunities that are accretive and that can also reinforce Super League's position as a leader in the playable media space.
Speaker Change: And we're on a nice pace to get there and very excited about.
Speaker Change: How it's developing.
Speaker Change: Okay very helpful and then.
Speaker Change: One last question for me.
Speaker Change: And it got to the point where.
Speaker Change: You touched a little bit more on the strategic importance of the Super Social acquisition and then.
Speaker Change: There.
Speaker Change: Their management team felt.
Operator: Kevin, let's now please move to Q&A. Thank you, and now we'll be conducting a question and answer session.
Speaker Change: There was a better way forward for.
Speaker Change: Any other additional color on your broader thoughts on the M&A landscape would be helpful. Thank you.
Speaker Change: Their clients and partners as part of a bigger organization than they can deliver on their own.
Operator: If you'd like to ask a question, you may do so by using the raise your hand function over the web or over the phone, please press star 1 to be placed into question queue. Once again, that's star 1 to be placed into question queue or use the raise your hand function on the webcast.
Of course Super social.
Speaker Change: The strategic importance for Super League is it puts us into business with some really exciting.
Speaker Change: <unk> been one of many frenemies that we have within the roadblocks ecosystem in particular there are.
Speaker Change: Owners and brands and gives us even more of an opportunity to showcase what we're capable of and in terms of how to deliver.
Speaker Change: Perhaps eight to 10 companies, who have effectively grown up together as it relates to roblox.
Howard Halpern: Our first question today is coming from Howard Halpern, your line is now live. Hi, it's nice to talk to you. We fast turn around here but in terms of the acquisition that you just made What does that say to other potential targets that you're able to, you know, acquire something, leverage it, and immediately make it accretive for everybody? Well, I think it shows that we have an executive team and infrastructure within the company that can help support opportunities for inorganic growth. And so if there are companies that have an interest in being part of something bigger and accelerating their growth by doing so, they can.
Speaker Change: <unk> for for those partners.
Speaker Change: And each has found a bit of their own space and their own niche and theyre actually partnerships that a lot of us have engaged in over time to help each other super social as a company we've been close with for several years.
Speaker Change: To the second question.
Speaker Change: About the M&A landscape.
Speaker Change: I think.
Speaker Change: There is a again an opportunity going forward for probably a handful of businesses in the space, who have achieved a level of durability and scale.
Speaker Change: And it got to the point where there.
Speaker Change: Their management team felt there was a better way forward for.
Speaker Change: To become bigger Inorganically, while also growing organically.
Speaker Change: Their clients and partners as part of a bigger organization than they can deliver on their own.
Speaker Change: Super League has.
Proven to be able to pursue M&A successfully and to integrate companies and teams and products successfully I believe that's going to be a strength of ours going forward. So to the extent that consolidation becomes even more active.
Speaker Change: The strategic importance for Super League is it puts us into business with some really exciting.
Speaker Change: IP owners and brands and gives us even more of an opportunity to showcase what we're capable of and in terms of how to deliver.
Speaker Change: We have a real opportunity to be a.
Speaker Change: <unk> for for those partners.
Speaker Change: Strong.
Speaker Change: Busy participant in the landscape.
Speaker Change: To the second question.
Matthew Edelman: likely have faith that Super League would be a good partner and a good home for their people, their employees, and the growth of their business.
Speaker Change: About the M&A landscape.
Speaker Change: Thank you that's helpful.
Speaker Change: I think.
Speaker Change: There is a again an opportunity going forward for probably a handful of businesses in the space, who have achieved a level of durability and scale.
Speaker Change: Thank you we've reached end of our question and answer session I'd like to turn the floor back over to Matt for any further or closing comments.
Matthew Edelman: And the recent, you know, equity raise, does that give you enough wiggle room, do you believe, to... get to your break even that you, you know, want to by the fourth quarter or do you still might need a little extra boost in there? I think we are, you know, we're still going to pursue capital raise opportunities in, you know, in the coming months and at the right times during this year. all the while still heading toward that epidopositive outcome in Q4. say.
Thank you Kevin.
Matt Eichmann: Ill conclude today by emphasizing that Super League is on the right path.
Speaker Change: To become bigger Inorganically, while also growing organically.
It has started with controlling costs is set to expand through revenue diversification and will become increasingly solid underfoot with gross margins that can propel us towards an EBITDA positive Q4.
Speaker Change: Super League has.
Speaker Change: Proven to be able to pursue M&A successfully and to integrate companies and teams and products successfully I believe that's going to be a strength of ours going forward. So to the extent that consolidation becomes even more active.
Matt Eichmann: Playability is not a trend.
Matt Eichmann: As a permanent and growing form of engagement that is dominating the amount of times the amount of time consumers spend with the content of their choice.
Speaker Change: We have a real opportunity to be a <unk>.
Speaker Change: Think about it when you are playing a game your actions directly influence your content experience that is why you are leaned in and that is why you rmr's.
Speaker Change: <unk>.
Speaker Change: Busy participant in the landscape.
Matthew Edelman: And one last one, are you seeing different Agencies now, now that you're, you know, focused on the play part and the mobile part, are there different agencies that are coming to you or newer agencies even for potential new customers? That's a great question. I appreciate you asking it. The answer is, absolutely. Our expansion into mobile has really opened up the aperture of opportunities for Super League. The demographic audiences and audience segments available through mobile are much more diverse and broad on really every filter than the audiences within the immersive platforms. And as a result, our conversations have expanded quite a bit with agencies and brands who believe in the power of play and the opportunities to achieve engagement with their customer base through playable media.
Speaker Change: Thank you that's helpful.
Speaker Change: For a brand to capture your attention in these moments their marketing message has to fit into your world and connect to your state of mind.
Matt Eichmann: Thank you we reached end of our question and answer session I would like to turn the floor back over to Matt for any further or closing comments.
Matt Eichmann: Thank you Kevin.
Speaker Change: That requires making the brand playable.
Matt Eichmann: Ill conclude today by emphasizing that Super League is on the right path a path that has started with controlling costs is set to expand through revenue diversification and will become increasingly solid underfoot with gross margins that can propel us towards an EBITDA positive Q4.
Speaker Change: That's where Super League shines thank.
Speaker Change: Thank you for listening today.
Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect at this time and have a wonderful day, we thank you for your participation today.
Speaker Change: Playability is not a trend.
Speaker Change: A permanent and growing form of engagement that is dominating the amount of times the amount of time consumers spend with the content of their choice.
Speaker Change: Think about it when you are playing a game your actions directly influence your content experience that is why you are leaning in and that is why you rmr's.
Speaker Change: For a brand to capture your attention in these moments their marketing message.
Speaker Change: It into your world and connect to your state of mind.
Howard Halpern: Okay, well, thanks and keep up the great work. It's a start and it looks like it's a good start so far. I appreciate that.
Speaker Change: That requires making the brand playable.
Speaker Change: We're Super League shines.
Speaker Change: Thank you for listening today.
Matthew Edelman: Thank you, Howard.
Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.
Operator: Thank you.
Jack Codera: Next question is coming from Jack Codera from Maxim Group. Your line is now live. Hi, this is Jack Codera calling in for Jack Vander Aard. Thanks for taking my questions. Just one quick question about macro. In the press release, it mentioned macro headwinds. Can you touch on how this is going to impact your business? How maybe you're working to evolve past it? Any color there would be helpful. Of course.
Matthew Edelman: I think the real question that is not yet answered is what might happen with marketing and advertising budgets due to some of the economic uncertainty related to the current macro climate. At the moment, we are not seeing a lot of evidence that budgets are going to be cut. We are seeing some evidence that they are being delayed. And so for us, the real focus is making sure that we're still putting the right solutions in front of our existing and new partners to make sure that as those budgets are deployed, they're deployed through solutions we bring to the table.
Jack Codera: Okay, that's very helpful.
Matthew Edelman: And then, you know, maybe piggyback after a prior question, you know, given that your mobile games is already grown to 15% of revenues, you have any visibility in or expectation of what that will progress, maybe by the end of the year and kind of going forward? How big of a chunk of the business is that going to be? We think that mobile will represent at least 25% of our revenue in 2025 and we're on a nice pace to get there and very excited about how it's developing. Okay, very helpful.
Matthew Edelman: And then one last question for me, you know... You touch a little bit more on the strategic importance of, you know, the super social acquisition and then, you know, any other additional color on your broader thoughts on the M&A landscape would be helpful. Of course, super social has been one of many frenemies that we have within the Roblox ecosystem in particular, there are perhaps 8 to 10 companies who have effectively grown up together as it relates to Roblox. And each has found a bit of their own space and their own niche. And there are actually partnerships that a lot of us have engaged in over time to help each other.
Matthew Edelman: SuperSocial is a company we've been close with for several years. and it got to the point where their management team felt there was a better way forward for their clients and partners as part of a bigger organization than they could deliver on their own. The strategic importance for Super League is it puts us into business with some really exciting IP owners and brands and gives us even more of an opportunity to showcase what we're capable of in terms of how to deliver results for those partners.
Matthew Edelman: to the second question about the M&A landscape. I think there's a, again, an opportunity going forward for probably a handful of businesses in the space who have achieved a level of durability and scale to become bigger inorganically, while also growing organically. Super League has... proven to be able to pursue M&A successfully and to integrate companies and teams and products successfully. I believe that's going to be a strength of ours going forward. So to the extent that consolidation becomes even more active, we have a real opportunity to be a strong and busy participant in the landscape.
Jack Codera: Thank you, that's helpful.
Matthew Edelman: Thank you.
Matthew Edelman: We have reached the end of our question and answer session. I'd like to turn the floor back over to Matt for any further closing comments. Thank you, Kevin. I'll conclude today by emphasizing that Super League is on the right path, a path that has started with controlling costs, is set to expand through revenue diversification, and will become increasingly solid underfoot with gross margins that can propel us towards an EBITDA positive Q4.
Matthew Edelman: Playability is not a trend. It is a permanent and growing form of engagement that is dominating the amount of time consumers spend with the content of their choice. Think about it. When you are playing a game, your actions directly influence your content experience. That is why you are leaned in. That is why you are immersed. For a brand to capture your attention in these moments, their marketing message has to fit into your world and connect to your state of mind. that requires making the brand playable. That's where Super League shines.
Matthew Edelman: Thank you for listening today. Thank you.
Operator: That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.