GameSquare Holdings, Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

  • Merger Completed: GameSquare Esports completed its merger with Engine Gaming on April 11, 2023, officially becoming GameSquare Holdings. Financials starting from Q2 2023 will be presented on a consolidated basis.
  • Revenue (Pro Forma): $13.9 million in Q1 2023, up from $12.9 million in Q1 2022 (YoY increase of ~$1 million).
  • Gross Margin: For GameSquare alone, gross margin was $2.0 million or 40.2%, up from $1.6 million or 32.6% YoY. On a pro forma basis, gross margin was $4.3 million or 30.8%.
  • Adjusted EBITDA (Pro Forma): Q1 2023 adjusted EBITDA loss was $5.0 million, down 31% YoY from a loss of $7.3 million in Q1 2022 due to cost savings and integration synergies.
  • Cash Position: Approximately $12 million post-closing of $9.6 million capital raise in April 2023, with insiders including the Jones and Goff families increasing ownership stakes (11.4% and 10.4%, respectively).
  • Cost Synergies: $8 million in annualized cost savings identified; full realization expected within the next three months.
  • Audience Growth: Increased from 220 million followers and active users at end of 2022 to over 500 million post-merger and Ninja’s addition.

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Operator: Good afternoon and thank you for joining us for the GameSquare Holdings Business Update Conference Call. On the call today, we have Justin Kenna, GameSquare's CEO; Lou Schwartz, President; Paul Bozoki, former CFO of GameSquare Esports; and Mike Munoz, CFO of GameSquare Holdings. During the call all participations are in listen only mode. Following the presentation we will occlude a question-and-answer session. Before management discusses the results, I would like to remind everyone that certain statements in this call may be forward-looking in nature. These include statements involving known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. For information about forward-looking statements and risk factors, please see our MD&A for the quarter ended March 31, 2023, which can be found on our company's profile at sedar.com and on the Company's website. I will now turn the call over to GameSquare's, President, Lou Schwartz. Lou, please go ahead. Lou Schwartz: Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to today's conference call to discuss our first quarter 2023 financial results for the period ending March 31, 2023, which we filed on sedar.com earlier today, along with management's discussion and analysis. Today is the first call since the completion of the merger between GameSquare Esports and Engine Gaming that

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