Release Date: May 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenues for Q1 2024 were $2.4 million, up 99% from Q1 2023.
- Net loss improved to $1.8 million from $1.9 million in Q1 2023.
- The HyperX Arena hosted 63 events, including high-profile events like the Super Bowl's largest youth-focused sports event.
- Partnership with Positively Arts to nurture young talent through the Elevated series show, The Jam.
- Cash and short-term investments position increased to $83.3 million from $78.6 million at the end of 2023.
Negative Points
- Total costs and expenses for Q1 2024 were $5.1 million, up 31% from the prior year period.
- Revenue from Allied Mobile Entertainment was slightly below expectations.
- Adjusted EBITDA loss was $1.7 million, though an improvement, still indicates a loss.
- Increased costs primarily due to Z-Tech's operating expenses, including amortization of intangible assets and noncash stock-based compensation.
- Despite revenue growth, the company still reported a net loss for the quarter.
Q & A Highlights
Q: Can you provide more details on the revenue growth drivers for the first quarter?
A: (Yinghua Chen, CEO) The revenue growth of 99% year-over-year was primarily driven by our casual mobile gaming segment, following our strategic investment in Z-Tech. Additionally, our Allied Esports segment saw a 5% increase in revenues compared to the prior year period.
Q: What were some of the key events hosted at the HyperX Arena during the first quarter?
A: (Yinghua Chen, CEO) We hosted 63 events, including 33 proprietary events and 30 third-party events. Notable events included the PlayVS Live: Gridiron Showdown, the Second Annual P&G Battle of the Paddles, and the third Annual Battle for Charity Esports Tournament.
Q: How is the integration of Z-Tech progressing, and what are the future plans for Allied Mobile Entertainment?
A: (Yinghua Chen, CEO) Z-Tech has been fully integrated into Allied Mobile Entertainment. We are working on strategies to accelerate growth opportunities and anticipate improved performance in Q2 and beyond with the addition of new casual mobile game titles.
Q: Can you elaborate on the financial performance and expenses for the first quarter?
A: (Roy Anderson, CFO) Total revenues were $2.4 million, up 99% from the prior year. Total costs and expenses were $5.1 million, a 31% increase primarily due to Z-Tech's operating expenses. Our net loss was $1.8 million, down from $1.9 million in the first quarter of 2023.
Q: What is the current cash and short-term investments position?
A: (Roy Anderson, CFO) As of March 31, 2024, our cash and short-term investments totaled $83.3 million, including $5 million of restricted cash, compared to $78.6 million at December 31, 2023.
Q: What are the upcoming events and strategic initiatives planned for the rest of the year?
A: (Yinghua Chen, CEO) We have a robust pipeline of events both locally and abroad. Notable upcoming events include the Inaugural WPT Wynn Macau Tournament in June. We are also exploring additional opportunities to partner with other organizations.
Q: How is the proprietary content segment performing, and what new initiatives are being introduced?
A: (Yinghua Chen, CEO) Season 2 of WANNABE has garnered strong interest. We are also excited about our partnership with Positively Arts for The Jam: The Journey of Artists and Mentors, which pairs young talent with renowned mentors for personal and artistic growth.
Q: What are the expectations for the Allied Experiential Entertainment segment?
A: (Yinghua Chen, CEO) Allied Experiential Entertainment had a busy Q1 with agreements and events in Asia. The inaugural event by our joint venture, Skyline, was a success, and we are preparing for the WPT Wynn Macau Tournament. We expect continued growth and new opportunities in this segment.
Q: How does the company plan to capitalize on the gaming and entertainment market?
A: (Yinghua Chen, CEO) We are well-positioned to capitalize on the gaming and entertainment market through our strategic investments, robust event pipeline, and innovative content initiatives. We aim to leverage our strengths to drive growth and enhance shareholder value.
Q: What are the key takeaways from the first quarter's performance?
A: (Yinghua Chen, CEO) The first quarter was a strong start to the year with significant revenue growth and improved net loss. We are optimistic about the future and expect continued progress throughout 2024, driven by our strategic initiatives and event pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
