GameSquare Holdings, Inc. Q1 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

GameSquare Holdings Q1 2025 Earnings Summary

  • Revenue: $21.1 million, down 10% from Q1 2024 pro forma revenue of $23.5 million due to lower programmatic advertising revenue, partially offset by growth in other segments.
  • Gross Margin: $3.3 million or 15.8%, comparable to Q1 2024 pro forma gross margin of 15.7%. Margin would have been 22.8% excluding FaZe Media.
  • Adjusted EBITDA: Loss of $3.4 million, improved significantly from $7.9 million pro forma loss in Q1 2024 – a $4.5 million improvement.
  • FaZe Media Divestiture: Completed on April 1, 2025, eliminating $10 million in debt and improving operating margins. FaZe Media had $2.3 million in Q1 related operating expenses and EBITDA loss.
  • Debt Position: Reduced to $4.4 million post-divestiture, consisting of a $2.8 million line of credit and a $1.6 million convertible note.
  • Growth Areas:
    • SaaS & Managed Services: Stream Hatchet signed major contract with Capcom for Monster Hunter Wilds; larger deal with major publisher to be announced soon.
    • Agency & Media (Zoned): Signed new license with Paramount to develop multiple Spongebob-themed games in Fortnite. Renewed contract with Jack in the Box for 3rd year.

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Operator: Good afternoon and thank you for joining us for the GameSquare Holdings 2025 First Quarter Conference Call. On the call today, we have Justin Kenna, GameSquare's CEO; Lou Schwartz, President; and Mike Munoz, CFO. During the call, all participants are in listen-only mode. During the presentation, we will conduct a question-and-answer session. Before management discusses the results, I'd 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 refer to our 10-Q for the year ended March 31st, 2025, which will be available on the company's website or with the Securities and Exchange Commission. I will now turn the call over to GameSquare's CEO, Justin Kenna. Justin, please go ahead. Justin Kenna: Thank you and good afternoon to everyone joining us on today's call. Our first quarter results reflect steady progress as we continue to optimize our platform with the goal of achieving profitability and positive cash flow in 2025. Results were in line with expectations and were shaped by seasonal trends, low programmatic advertising revenue and the final quarter of FaZe Media's inclusion in our financials. As a reminder, on April 1, 2025, we completed the div

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