SLGG - Earnings call transcript Q1 2020 | Super League Enterprise, Inc.

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Operator

Good afternoon, everyone and thank you for participating in today's conference call to discuss Super League Gaming's Financial Results for the First Quarter Ended March 31 2020.

Joining us today are Super League's President and CEO, Ann Hand; and CFO, Clayton Haynes.

Following their remarks, we’ll open the call for your questions.

Before we go further, please take note of the company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statement provides important cautions regarding forward-looking statements. today’s will during forward-looking remarks company’s conference include call statements. The uncertainties. presented along a reflect and with statements, does number other risks to These subject information not are historical of fact, implied Actual by results materially may from these statements. differ forward-looking those differ. release uncertainties Please company’s to actual that and Commission could reports recent about information to Securities the for the cause and more refer within the company’s to Exchange the earnings filed risk results and

through May I webcast to replay be everyone available p.m. this X:XX that company's replay be available A will XXXX would via provided call XX, Eastern as release, the website on like remind well press also tonight. the at www.superleague.com. starting at link for Time today's as in will

President Ann? Super Gaming, Now I would like to to CEO Ann League and turn Hand. over the of call

Ann Hand

afternoon you thank joining us. and Good for

think that say on times world times when phrase used can I the March speak changed the can't I or I for whole everyone earnings call much many our last how personally has how I XXth. I have since believe crazy

fairly call resilient. recall, it may that on has in prove were predicted to gaming frankly COVID-XX we historically be head you we hoping as addressed that As and would recession

for As on. the human fortunate the silver is to capitalize has gaming League beginning nearly turned lining space, planet we every down world industry every in the and upside on have which Super

king of respective that we our call, to our assure on know we impact blaring. just manner COVID fund one did do in we we need message on degree March all you industry. XXth? after would else regardless Like you knew of knew was in this What heard shareholder-friendly capital companies, a that Cash we earnings as And we possible. some your week Well, bring growth. to more would and

report over new pleased yesterday. I'm that capital $X we secured in equity million to

of those market the were depressed rode to the price share two came presented many was that the waves a financing when of as imagine greater last of can months. pullback. company over there our And You variety we options being the

what straight debt looking maintaining five average with for; believe financing alone priced balance invested for no the trading with above no let us a days. gives We price high-quality this the prior closing by we shareholders sheet warrant and overhang, our few were XX clean equity last days, closing the

fundraise runway us I said, in on do able of this also execute been not agree. profitability. pleased get and and to strategic on plenty you are have commercial hope nice path can to this acceleration us only As through we time environment that This gives to to but year-end more a us a put

the This riding been as new is fresh Viacom content. Strategics and from League to they historically have their recreational trend and Logitech thirst gaming more, value own different of saying. we've competitive esports businesses from see what to commercial Super the the invested no for

all a result new viable our but foreseeable of hold on sports technology for of patented way companies. the the working not solution, a a live COVID. programming And not surge in capabilities as world to but fill engagement coupled content just our in recent production void announcement interesting possibly a the and are Hollywood for Live temporary of our recent just our future. is and makes media remote viewer regarding entertainment with proprietary fully us player essential And and COVID types

engagement player then for and let's opportunity impact it first and business model. down, and So viewer the break our our

all-time had we players, roughly beaten the laid digital both gaming million XXXX, of records. By annual negligible. X.X our metrics. road XX registered and had to out materially approximately gaming our week views playing show nearly, XXX,XXX XXX were impressions. So weekly and gameplay on each our in a end and with the million see XXXX, and And as KPIs users In ended million viewership were and our players began one we impressions engagement hours hours, we hours million gameplay first and plus we in IPO we channels, and March, passed, In of beating surge cumulative impressions. views

of start year-end again million. impressions note XXXX, than full XXXX XXX million we thrilled XXX the XX and is metrics triple views have X.X more gameplay million this Well, XX the reached four users, I said the hours, At year gameplay will that impressions. million views year, months million of of just registered two we that and users million to and that our reach to to those by be and and doubling hours,

we the fact XXXX. just the In of than impressions calendar in did month alone, of full more year April

and It is of state data thing the the are the the world, League are say powered Super we of gaming current by state implies the to to resilient one world. current but

size as is just COVID. asking was three So was the me, simple; temporary? My already that trend permanent and of fad gaming already this and Gen office film global mainstream all Zs crossed is form investors the the millennials. dominant for TV, to are box entertainment times response had bigger than before and The is gaming from of

stickiness. did what and started to platform. critical and And meaningful mass for gamer growth do? and validated our deepening So accelerating engagement COVID eSports It create us, is gaming the on and it

up the engagement over recap, million through impressions, XXX XX million viewer X.X to engagement compared of XX% for four users, for the hours hours, million compared year-to-date; XXX to in first to year XXXX; full the So of and months year all XXXX; XX April million registered million XXXX.

model. So now about talk business let's our

monetize sponsorship-driven have been end year to of last direct this began the early further most and growing revenue rapidly own build we amassing. model up sales team this our As inventory to we primarily year of and at a advertising know, you are

saw early that saw Facebook and even So Well, March what does during giants what the meant we in COVID? April. like

we Luckily lose material reaction advertisers a pause a didn't us, deals. that makes any and to for was first that The took of bit reset sense.

life now from just usual, proceeded tournaments and Tencent the and Our safety partnership PUBG comfort players with homes. OnePlus as bringing of mobile to

In gameplay digital. of hours our the fact were majority already

locations cake, shift business model, impacted. away not was the the the from our of real-life our -- cake the on half while icing So retail didn't the in gaming impact our business is

And at emerging X advertising much products. attract to strategic premium a for X times our model for of currently slots, CPMs year array superior partnerships, beyond inventory now to the ad size ad while to us continue ever-expanding trending times our wider last offering allows of super our

maintain to While out to don't value, also opportunities. good we revenue we miss want on scarcity want

corresponding to the way without have low and hallmark. a advertisers can We can afford now inventory up range, of premium set wider of on ranging CPM ad $X wider customer all to $X to offer speak experience. product and the variety from a been down the average CPM we in With impressions, CPMs, weighted the diminishing bring which our this surge to relatively

is has different front I'm hustled. in And We how results our most COVID of unprecedented an marketing the ourselves advertisers our got what in channel position are proud sales engagement and new of to a for and time. surged team And as evident.

is Our larger healthier pipeline sales in COVID. and

in with late a rebounded for XX% increase opportunities. mid average stage XX% size have deal more opportunities to total and We

monetize We pivoted physical fast. retail the So tethered pivoted alpha subscription start in monthly But that so told and would had mid-December. offer next top-line you locations we of an growth. to to launched and gamer our we it on this year we was

While digital direct-to-consumer didn't on wait we subscription revenue reshaped be we purely ambitions. to feel is could being our

are and quickly records up registered players over We trending XXX,XXX with digital million into XX/X marketplace minehut.com, X transactions XXXX. where over hitting unique micro with since have starting and gaming users got goods, the last our channel days our January XX Xx proprietary we at

Just we exist Not up and it didn't stream that there's $X,XXX a range launched paying from pennies in in that seen our on come. more to a our earnings bad given few and a for view, from last was these revenue to players of month have record dollars. days even back, call high goods revenue

to of our under are marketplace will that monthly social functionality addition adding offer the branded purely In to we relaunch Framerate. the channels digital, be subscription

production more have that revenues libraries generate to have interest to well. distribution user-generated through own their fill content as digital have channels opportunities Through an content content deals. COVID our Thirdly, forwarded viewership our fast and content, we can accelerated content this others to world, on and and proven large material generate channels we mostly

live A how we of and few video-on-demand distribute produce others. for and examples stream content currently us and high turn of experiences engagement

World start Golf let's they Tour. Topgolf. with stay called members, to great closed are their retail First, They connected locations want while game video own a to and their

Topgolf for own players keep participate, that So about this them. viewers handful digital the their amateur the of on engagement audience not to tournaments can of with large virtual we customers during about time. reach But just is run it's their channels that it

a their postponed to Track Gen for program to exciting an Penn prestigious XXX-year sports ran they the Relay a Franklin old hired just that due to pandemic, a recently allowed events. their With third ordered wanted event us within compete University connect Field team we of And G, professional fans. the to of Pennsylvania's series Snapchat, in content us. replicate Minecraft series And Field Snapchat to gamers and virtual and from iconic

proprietary how a production in your especially, a without We and and through the is jewel, how use virtual but capabilities. for fully own of world sometimes do physical you this remote crisis. something content bit becomes technology of is all content our studio, It a a funny build head of when

a for along to something don't then when with fun that even players theaters. opportunity. if Let it came the the wanted me their watch wanted that game. and specific something In screen, in our big you were time to with bring play current minute immersive friends and we our do and to running take the more events have We back you back would investors to to parents, XXXX, Cinemark who make siblings and experience we

ESPN. trucks have not big live for to as budgets why need in take of and things relays satellites, broadcasts. didn't for that switchers advantage the all But pay production scene thunder big or with you compelling sports roll CBS up sound We we and cameramen, typically the So weren't system? the

had of affordably. Jumbotron, own make our to version So do our it we but

live bit of set venues' is of a production back for offering real-time and productions. to come plus statistics use call retail curates can a join. we physical a graphics. We started tools hundreds and engineers same from our venue all accept our our audio broadcast big building engaging content all while a that booth, Everyone speeds, along that talent, life in players to But a all stream while database to simultaneous allowing the technology for directors, AI This make sound The those technology result and high-quality live is can the the intelligently overlaying screen speeds, what all. digital automated remote, with of we that for key. screens cloud-based here's producers is commentators, of those remote adding virtual

So back to now current day.

be can U.S. on a the tools the growing It help production left basketball U.S., tool technology sports Our and sports park talk help tired in local and from everything reruns. the it's the court, It COVID. go court. companies game the to to just Open your game the current about shows. content game void our a beyond empty. back esports. And extensions. not baseball fill by from season can esports NBA of media professional are bring are powerful audience can Everyone production bring tennis is shows video when into local And your to stands Traditional hold traditional

it's show. We It's and importantly, complement real if deliver replacement very complex live integrated high-cost broadcast flexible with affordable from proven, multiple economies distributed are tape scale costs. traditional and and live streams broadcast can or an what of turnkey not solution, offers scalable that most a historically to a take

swiftly, other have seize things of window responded sustainable and we'll changed in better COVID, side. our everyone for be sure on but the a opportunity So and company unique we

most energy been they eye feel remotely urgency see decisiveness I've well the have enthusiasm But thing to is shared experience new line we and responded never focus on weeks the finally Super surprised is their on me to people to button directly having keep all. in our this work-from-home now. eight close employees and through linked for think If Our And genuine bottom excitement Productivity, had have finding that the world. how working it the I League to its off moment. anything a higher. been the

hand the I up. massively before is to So over headlines: Engagement Clayton

April and we XXXX. of did more impressions the on As in full than views year I mentioned,

inevitable on pause well a Xx last our larger seeing are sales larger way to and size the year. on we to healthier average improvement Xx advertisers, with So deal is pipeline COVID. After to our from prior pay

we monetize just weeks to is we We and offers. for a getting growing started. XXXX stop didn't launched a stream through from let revenue few And COVID direct-to-consumer start micro and transaction making we're the the strong within already what us gamers year marketplaces

ways traditional exciting new are emerging formats technology scale entertainment for can extend We and production an into unlocking esports other our sports beyond deals. of content large set

last our are few XXX% working And we remote way. have remain company. SLGG and including single become the everywhere role weeks, studio Meaning, in eight home staff for a every can content that

flex We us. are the for leaner whatever and and nimbler can throws at world

hedge. last add to and the this material for online providing or build can We And a local business, not our offers. complement Super stadium real hard cul-de-sac large our the to audience for never to you back or a ready part year to did be when to us just portfolio needed a on Plus of but and work always were we has in up served live a digital We endures about go also quad esports a life as to get of now. that events League. plane

with At will closing the CFO, call back which will results, this over after to point, on Clayton? come remarks. some I turn our Clayton, financial will first an of I overview quarter provide who

Clayton Haynes

a By pandemic and activities felt advertisers XXXX. relatively were summary, brands unfolded to initial you, quarter deferral revenues way our of year afternoon by of of flat during quarter-to-quarter impact modestly as down undoubtedly Ann, good the first COVID-XX Thank we and the the ago, the everyone. and as of compared

trends, the compared a operating our consistent while prior quarter. when average Our operating higher XXXX expenses cost on QX prior with of GAAP quarter, GAAP loss revenue to the relative were lower remained leading and was margin a lower year to basis our year to

of summarized general compared of the decrease $XXX,XXX all companies a of XXXX. sponsors quarter As slight as stream. the brands first and release in in the our revenues for XXXX first that the $XXX,XXX revenue were key the by pandemic, badly have the advertising quarter reflects today, spending to COVID-XX earnings earlier and stages The during filed has advertising early deferral which impact felt by been of impact sponsorships

revenues revenues along direct-to-consumer As our and includes advertising customized for brand Ann our partner and revenues. revenues, programs, and two more Sponsorship and mentioned, buckets: which traditional properties, categorize main brand and our advertising we sponsorships with sponsorship into advertising owned operated Direct-to-consumer as primarily and quarter first for compared XX% the third-party first of digital goods of and with in revenues XX% content of property. were licensing, comprised subscription Minehut quarter revenues comprised revenues approximately revenues to the XXXX, of of XXXX. digital

increasing free-to-play We on our number experiences and consumer strategic to funnel users consistent the increase events continue to and registered new emphasize, conversion. with our gamers drive volume platform of introduced customer of the spectators on and our focus into

overall focus offer Going of with combination forward, we up free-to-play intend a paid to continued a to and experiences, on ramping direct-to-consumer continue monetization.

number cost lower-cost the the XXXX a the to quarter, quarter, first higher live XXXX, prior compared of revenues prior in recognized quarter quarter XX% by quarter-to-quarter. increased This $XXX,XXX year in First quarter of was year of comparable the compared to while and XXXX. brand revenue were sponsor to first in flat of relatively revenues driven $XX,XXX events

can earnings each of digital advertising As cost discussed on revenue each sales our to prior cost of on and occurring period programs period-to-period fluctuate and period. contributing calls, the and and the activities physical specific and profile content related based experiences, revenues streams, revenues

compared decrease comparable the quarter in XXXX, certain million, non-cash options the the in to IPO-related a was which employee warrants, $X.X $X.X vesting first were quarter due the expenses operating expenses, and in in first XXXX, to to year stock prior reduction of million XXXX. approximately quarter. of quarter decreased performance-based compensation The First $X.X due million primarily of

XXXX to selling, team first compared by $XXX,XXX build quarter for the marketing we was The the our fourth future as to increase charges to quarter consistent and our of to the you million advertising compensation earnings expense, continued XXXX with quarter with offset monetization, $X.X as decreased call. on we of in marketing plans stock in shared XXXX. out drive an first Non-cash decrease partially

company-related quarter public of first of XXXX. the other or cloud for and technology due public one-third higher compared higher and full quarter platform of company fiscal expenses related quarter insurance public company services, costs, corporate First primarily storage and XXXX quarter also expenses reflected to month public only incurring in to infrastructure XXXX one of to company a expenses, first the

a to of loss On a includes GAAP per or the basis, $X.XX year impact non-cash which of loss compared first million, million $XX.X the XXXX, per share charges, quarter in comparable of net $X.XX prior $X.X quarter. share or in the net was

net outstanding non-cash included convertible XXXX, in company's earlier, XXXX. to the related close the the first described XXXX, $X.X debt and the to to principal to non-cash first charges expense, December totaling of upon addition interest equity In quarter interest automatically loss XX, quarter All converted the million. for IPO compensation of notes at were related convertible the of

non-cash our million charges, compensation quarter. other prior year non-cash non-cash $X.X $X.X in Excluding comparable to pro loss net the compared expense was million, forma interest charges, and

described our the a SEC or our that compare discussed evaluate financial filed As is and believe forma today, measure by Ann KPIs loss results, with release non-GAAP earnings earlier. applicable we income and can investors in metrics use and other with X-K along net pro to

reconciliation pro contains with loss, accordance prepared of directly note forma the description our comparable of of as a pro with more that, earnings our in calculation measures forma as loss Please detailed net GAAP. release financial most net a well

shareholders' million. cash, March had no XX, in XXXX Looking and the $X.X debt we at total $X equity as balance sheet, million of of

did we basis. to monthly burn execute to in net the continues million XXXX range In be – with uncertainty serve at in consistent range. will keep $X.X $X.X go-forward a million $X.X to on relatively rate Our cost-cutting to cash that response burn $X.X COVID-XX, April to our current to associated monthly the activities

to continue within we areas. functional organization with work identify additional to cost savings Additionally, leaders the our

$X.XX at of institutional As entered net proceeds and direct offering fees that purchase and expenses. stock approximately sale at under Ann X.X the million securities the after to million per mentioned, investors we for announced The priced of pursuant into offering an agreements with a price the will market we of yesterday, registered common rules. offering purchase NASDAQ share, be of shares offering $X

The is May the offering of The registration closing with previously filed to offering pursuant or to direct satisfaction made on registered conditions. customary the on statement SEC. about take to was place S-X closing Form of effective an XX, subject shelf expected the

Additionally, to Super X-K specific May for pursuant in in an a variable the Congress, program, from working as and net of and detailed matures proceeds we filed use potentially in company applied The to on for Small by a under Administration, League loan the obtained resulting X, capital Business loan million, by Paycheck XXXX. provides $X.X approximately enacted approval the for CARES Act. Protection the PPP of U.S.

With back turn Ann Ann? I'll the remarks. to that, some call over for additional

Ann Hand

Thank you, Clayton.

League compelling to for has everyday of a best and the about our extend it real one X.X as content consumption I gamers. community offer opportunity recreational technology using think examples to can to the billion-strong gaming, But I how create is content Super well. mainstream

mean So that? what do I by

professional searching often ESPN. likely that for missing He's said, broadcast on PGA. never Masters Overwatch The also League of Legends, watch I an will tournament have While or is the and he But content. dad being my

Spieth. dropped this in Jordan Topgolf doesn't Moines So our wins. this but virtual win, he turned a similar instance and golf? we And from if golf, live Sunday on to tournaments, the TV What kid saw we Des in

I might that. think my dad watch just

of would. I us think many

sports gamers, physical And than League and show a has fans around audience Super competitive far it of to extensions We wide-reaching live be more natural an virtual us believe titles. how complementary just traditional can esports and sports. has to opportunity

just driving being With promise the esports aspirational, mainstream. not and but revenue an also growth. on we is remain that, That star, of accessible focused

We are esports be at positioned growth. well epicenter to the of

will to the to with opportunities, of are widening build significant plan of and value. coming continue we shareholder continue we execute And and strategic that we believe power partnerships to our growing alliances, And our realize form optimize our array platform. a we if partners new

happy with take to And questions, Operator? and that, are your Clayton I

Session Question-and-Answer

Operator

first Global Thank from Our you. question [Operator Kinstlinger Alliance with comes Instructions] Brian Partners.

with proceed may You question. your

Clayton Haynes

How's going?

Brian Kinstlinger

China Thanks touched opening. And subjects. of taking didn't KPIs. Great, -- for hear thanks Cinema China But begun? the stay-at-home Wanda they're rules. the anything Games so Ann. questions different how on, the We you're you not economy and transformation partnership? about we no longer on The begun? hear my it What's take? Has didn't many under, progress and Has it latest theaters long solid might making

Ann Hand

to I the for kind having continue to Yes. Thank great weekly you And things Actually partners meetings That's of I with to at China, how clip. said, a it's see other bringing our day. move we have in board a a up. just Wanda. was namely call question. that are And fascinating continuing

expected to do really formats. or knew what work kind planning We the ideal of games to half launch that be with year. of would first launching market the the right We to running the never the we at, in events be needed look to and

in our lot We a flexibility of platform. have

And we a really beat. missed haven't

In anything I much inside, maybe added of excitement we're like that China see fact Super with level it feels in focus, our and it urgency feeling what partners. and League like if

planet. large-reaching loyalty gamers the Wanda biggest very of is has And is And thing a the program. China on beautiful market the

are Wanda's basis to them. can't now loyal and customers go there cinemas So to and of malls, right

with ways And they're really to while engage we at well. as have home them,

if those And efforts that we so, at that down in digitally, stay slowed early folks excited the we haven't we're pretty even more days all.

out want again, when do have revenues coming just China caution intended we XXXX. calls It on like for I But never see that, of say, to and other to we asked so testing, a was of kind about we game XXXX. locking more the partnerships, of real doing the proper in rollout phase in that big really in that were and portfolio market picking big

Brian Kinstlinger

value hear about some to per And transactions. it maybe any able micro subscribers? if Are industry great not, follow-up A provide you was Great. micro long-term for transaction to reasonable metrics? targets

Ann Hand

really know, You a question. what, good it's

a from the gamer fact from average different in anywhere see a ranging North stats purchasing We month, content. America right? in to up that We've seen gaming month, stats, have $XXX $XX the spends -- we

a to need that little down you bit. Now break

that they're that dollars What primary things The buying on mean? content are gaming does when they're in-game. spending

maybe buying And transactions. you're and or skin are a Fortnite those So in new a you're dance. micro

a thing interesting spending close to is they're to month, streamers. giving that, basically other donations favorite The their $XX

they're either And someone watching So or learning they're gameplay when else's watching, being that entertained, content. actually that's they're from streamer.

And site that so they streamer's donations to content make alive. keep

So I got think pinpoint starting fact at transactions I when a that over you of exactly, and can't XX% to you for do that but million minehut.com that base the micro X.X we've to through just look right of attempt registered are them monetize fairly users, in we're active. now

Even conversion, is But at of starts it able of four in. a a become business pretty we're its just some kind get own. just exciting $X to percent weeks if on month it to

shape like. give So of can -- could what some and little more growth that ways think bit to about thought look something but it's peg a about I'll some certainly we some start to benchmarks

Brian Kinstlinger

Great. Last I'll the get and thing back in queue.

general, size are on times XQ? to that -- how communicate what to should to that is that pressure last advertising the in times desire means of and you the where increased take to from the X revenue to pipeline but want How we increased of what You investors the about do also and and the X year. highlighted gameplay the beginning in ramp advantage be to

Ann Hand

the those deals. pipeline have between paid little converting and inventory to a I lag Yes. up into deals that and you're the lining kind it's mean sales inevitable going then of

ad So, XQ one this did thing as to hey of is kind a in of in we said, we inventory seeing that surge, we're opportunity. new say investors kind

sales sponsorships. we of and in underneath global is, head team what so and January direct a up hired December did partner we And brand our

our had some have time the deals XX% on that work our of lead years are one, -- talk That sales when getting would we meaty now pavement to opportunities those kind this that's of deals of big new wider a longer much have Usually pipeline length extensive. really kind we diverse convert two pounding we have of a partner direct hard the the them. advertisers. that and more of pretty fact a strategic team in is of So mix top-down, sales about increase often because we in

longer cycle. are they So just a sales

But start what pipeline time. these funnel you decreasing, to our I would few as we the should also So see new length lag. that, going should leads is you're a so expect to into see months' say come the conversion of

So so to ever-expanding if fast and and now more a to COVID, pivot months get within the a March to and pipeline increase able really going start of we I you're another reset of the monetize labor to it response think in start to were XX% of couple as then to inventory. in see that see fruits that

Brian Kinstlinger

Great. luck. Thanks, good

Ann Hand

Thanks.

Operator

you. Thank

with next Northland Mike Latimore Markets. proceed. Our comes Please question Capital from

Mike Latimore

for this they And advertising are the key Hi, milestones my business. year? my thanks for regarding is should when taking question. There's for noise occur? ad line. My question first What

Ann Hand

echo it Could I'm question. sorry might little be again? your ask there's a It speakerphone. you your with

Mike Latimore

are key ad they occur? when this for milestones should year? the What And

Ann Hand

so time a listening having hard still am I'm sorry. I to it.

Mike Latimore

for What year? are the key they should And when occur? this ad milestones

Ann Hand

are key milestones the year? heard the what saying you Are XXXX? talking about I think I for you for So

Mike Latimore

Yes.

Ann Hand

question. No, Yes. good

So yes.

titles. KPIs. I X refined even We've So is on we've a pointed year we game good really we're it And mean year this look it's focused to saying, portfolio of tighter. really last got what hey --

focused really those funnel, gamers or of viewership users? into top How So we're we do the convert on registered players impressions.

We don't of Now want viewers. right? millions hundreds players, of hundreds in of we mind, keep millions of need

how it's viewership can much measure player we that around But important one still them? So to think generate registered user.

their their how that much engagement of tells us time you they're And then -- the larger a is time. share and third hours engaging their but is wallet, thing because ultimately not giving just

we're it's the on growth. the is And focused our we there's course growth. of really we're with year, It's this is beginning, the working, top not right? right be on unique a important laid early be -- you of significant in, would happening line can outperformance we we and delivering to now at KPIs, to fourth We from against those. revenue. see stage this out that Now start said metric it's need Our XXXX remiss say window

at that listen beat we us conferences line top investors let our know But to growth. nothing's they going do to and

say really the would four those metrics most I so And critical. are that milestones or are

Mike Latimore

revenue And platform brand was contribution as the what a -- quarter? have been in service sponsor I on and your

Ann Hand

Yes.

brand that one jump when You that the own let Clayton out in in the out is recognized which paying I'll about early platform-as-a-service. as brand that owned know that operated or then call and breaking service offers, went partners revenue quarter. to key But platform brand and between note what thing we're were that, the versus them, you'll run done customized something difference and thing sponsoring for we we've we're partners a we XXXX, for we us talk sponsors sponsorship we our

that or types we was cloudy we being that of And when in a for really realized making were it they're of just confusing actually are different done investors it just type unnecessarily, doing more two and activate. similar

for to their those PUBG so like a about And brand sponsorship we us at OnePlus, and when tournament things sponsor Tencent, heart really mobile a in bringing both talk running are activations.

same. together, lump just We've forward it those one started simpler understand. started for of they're just two for now items So the because to really investors to make kind line and to XXXX just going we've

So with to sponsor that, Clayton, XQ? revenues do platform-as-a-service answer want brand you our for

Clayton Haynes

Sure, sure.

categorize in XX% categorizing the that were quarter. year XX% we fiscal we sponsor. prior related what quarter the So first of things as look way revenues the And about typically were of in XXXX, prior in year, prior for of the to compares we as a what taking XXXX platform-as-a-service. was back to year categorizing quarter And XX% the were brand the would traditionally sort for

Ann Hand

headline the our in much really platform-as-a-service is, primary revenue stream, had XXXX and as brand So to just be continues we this sponsorship described.

the you're two inside sponsorship, difference more I more think are start One dimensions. is to really that advertising is, traditional brand like to see smaller but activations revenues. short-term going

who's of our up game, launch. week in a that's inventory a on game new who So comes and company a digital channels of quickly buys one launching for

CPM. at like So these us what's deals top-down with inventory partner Tencent, decent a pretty selling these larger of instead premium that strategic long-term out still are

in move then micro type revenue second about we line those as into direct-to-consumer revenue. just transactions of were of kind new a that's earlier. the advertising bucket So of speaking and we is, And

monetizing is actual monetizing the themselves. other is advertisers one the So and then player

Mike Latimore

you. Thank

Operator

next from Our [Operator Jeff Instructions] comes with Cohen question Stephens.

with You question. may proceed your

Jeff Cohen

just give then question. I the Like give like to quick or what in a micro Minehut. How that? you players And transactions does dig a just follow-up. for in I example of guys. have on taking Thanks Hey, follow-up the buying? wanted that work? Can an actually are

Ann Hand

absolutely. Yes,

micro transactions, a just three identified of you a we couple One a our to So different private decided types class but Minehut we've play maybe for kids because active with, inside can't with their to who have kids virtual features the about their has they long across maybe so engaging of marketplace, friends at be in create parent examples. with. list kids additional their now or room want playing know street school, to from are still the that your

strangers online. playing don't a You them bunch want of with

friends or realm, of need upgrade or number you daughter invite into then room to to your server. can invite free. virtual for that XX XX, wants expand a certain But son if you XX, your friends now, and Right

So upgrade you monthly need fee a to to paying start it.

Another specific transactions to types are put Those want decorate might micro in it, realm, to want arena. leaderboards appear. and that of in you're want maybe the private your your you up you can to run Or purchase. example is, tournament you banner a once you a

Jeff Cohen

bit we then, should have And you you can Do that about customer maybe? a you it. to And guys far wins so that? see how highlight quickly Got you can Thanks. patent monetization the specific start like won? that maybe talk little any from

Ann Hand

in Yes. it's it put for that, context. because Thank asking to good you

and milestone the theaters, is patents about several of movie it's in XXXX first is a to And filed. queue us. which was that back when talked I has the So the for one state, gotten we allowed first and through that flashing the that tremendous

what's couple in And one, that really different happening a of is things.

is does Super There's drone which is, can watching fly Bowl high sports field game. think you like when a Minecraft, spectator that lot a no The first we a of leagues what thing ran that it's give Bowl there you like that you're if about and the is view drone no around, game view. Super our above youth up the doing

watching don't stream match, And view. yet your in VOD parents don't you if you're spectating our live watching matches then or if audience if you Sunday you're really friends that on know you're darts watching the or or what channels, have

the were case create them and had camera like early dropping we we players. in And on dropping a that So view in We cameraman. game. were of of playing, instead teleport them

how using earliest kind are crude those were we most of it. So forms those of

are at to to asked started had screen, And when of kind viewer matches consecutively. run happening start so where tournaments thousands we they're happening matches. simultaneously? we question, the the country do feature one picking well, the many the so use same which intelligent happening on we to And once, we started of best if the across you Then big

you another So kind to use way kind That technology matches featured. of curate of being Zone Red we like that see was feeds. six when NFL, intelligently

other out this road note openly to its said and relationship the a of set a feeds to digital picture investor that used and important this venues, I've live, coming into that that more subsequently, simultaneous lot production decks the into visual and broadcast of really high-quality really show It's IPO booth back and I've patents that stream are has all real-time those of all the during in there's filed back automated in it's the cloud-based coming live channels. tools virtual

because virtual it then but events, secret in world these really that that COVID It's do also because just not types this we that patent it's production received it can fully remote of with patents allowance you around a boot additional there's we to do our we've on, can we blended do And in super hired first affordably. are when sauce. why

it's tournaments. to because live also so Super broadcast get channels. We you to And feedback when tournament just run League, have affordable business with not capability your It's a we we do you that a to turnkey event really you more that is just be get want operator. don't

Jeff Cohen

you. Thank it. Got

Ann Hand

with Now to teams to their our that start to we've got end fans deals just their seen to pipelines. season kind to professional and who doesn't of sports come finish partner if a going are how little sales bit different We've of your into they struggling COVID, are connect question. type of a Yes play. in

the across are usually field ways this about that teamwork get questions gosh, other to the year, there if kids aren't for country are have collaboration. We on going them asking learn to and like connected to stay

You've that the or upfronts if reports got then ad these live sports pull are there coming that of back. out coming have content some fresh media you dollars going those put in saw to advertisers late summer. companies yesterday isn't news probably already And against to

whole we have And the excited heft because of really others. so been we're technology come inbound have of for way pretty conversations way capitalize this the so a and use our started the that to much different – can about

Operator

comes Securities. Thank from with you. Davidson And National our next Rick question

You may proceed your with question.

Rick Davidson

that of talking of of and Hi, $X, seems seems Ann. so monetization that amounts the In the some revenue easier monetize like of playing just as me How thousands forth. for join media. To growth it's you? there were very are as an easy to should be tournaments, tournament $X if tournaments terms people about these some of this point thousands to well new it even to way terms you smaller just example, me of in of a in and

sleepaway like so to. so contact this any much these other's forth. business. that year. are But isn't almost or want COVID now which is so there's not adoptable so is lives it because ingrained Even much technology in that of they a There's $XXX easily camps, There each year to believe and in million this a new say kids

television I'm is just reason other and reps on many forth? asking are is for I'm of there And because Or and they tried the and have in-house how questions sales curious advertising are The so your commission? to of on. out forth why the in have terms better one salespeople to that’s force, I guys are they so professional you so there on raise so run salary?

Ann Hand

Yes. Yes. one first. I'll start last with your

Jung, CEO it he Fox – and was were we member, of the I took IGN after – So we the we of hundreds that sold fortunate have IGN calls to on wonderful public founder then COO became and a to of mentioned who Digital. of other Mark dollars for and millions Fox Board

And as surge kind time engagement was who the time. get that of ahead seeing really this. one said "It's on in you It's were of XQ we he of

to start sales ready direct this force getting this need for You volume."

sales had sales Twitch to And then quantify on to our who West the were brought Coast it, for the with run to IGN do his her an run it, him first kind so And at help objective independently price lens inventory how we a adviser, woman things: just asked few and opportunity. expertise we had that a have on about an thinking ad we get of to team. to

about career those And variable lot structures. also pretty And part are that then comp my a in typically she of recruit structures. thinking And sales and helped team. comp was us that teams run of I've

But certainly compensated. managers that like is leaders that everyone You'd kind of country, are especially doing space, for think sales company good the and way in that first. keeping the is this to their the that predominant

eating with that associated have right? So we a do structure what is variable kind of costs kill, you

got because, this other a then, is And We've all right. good question your you’re one engagement.

we're one from gets in, the -- working surge so And home. weekend when think of I only

let's these head, And not world it's March anymore. accelerating on we're having almost So, transactions. around call, the a micro turned of XX. like its like it And a has already notion mess conversation about let's look

Let's not overthink it.

Let's And trust get doing it. from start players. that just let's a the response we'll good

$X venue, in they physical the you join used of our to let's $X, charged fees be why too. they not? if were And said tournaments I more your the before a a to online do Like We said, the there let's lot just in something $X, nominal to geographically-based one-off mean, appointment-based. more. to tournaments. cases, accelerate, were some be And at like for have So point, is times

of really kind So down that market. addressable your narrowed

our see I always on in back to it Super next weeks then, bring starting that look, but really then you'll coming to digital offer. if here. persistent say, once into take basic to you're can then want upgrade. Because really the be up XX/X time get seeing with okay where level engaging we get be that's gaming. at to League, think I Minehut, that gaming And and starts the ways League, there's is What you really offering it's subscription persistent Super I I can But

price we've figure doing engagement starting that be joining in only out monetize to time to a let's here will the got we think the reason you're because eyes we charge is next not right, we're and smallest much even somebody okay, to $X XX frankly, But that the have XX on how ways it. days. now for the in the tonight bigger -- is just our kind we a So of tournament

Rick Davidson

like And a yearly no monthly it's fee, you forth? nominal if charging ambition have so of fee, even and

Ann Hand

That's the a exactly subscription. subscription Yes. offer. that It's monthly That is. what is

Rick Davidson

And then question. my -- other another I have

investing and how in so your well and much in engagements, versus international as in of advertising, your are forth terms as of domestic So venue of games is international all terms that advertising?

Ann Hand

the this the I value belief that that, that global have are And more going general -- about reach, XX% more say are advertisers. U.K. North Right yes. much Okay but we is would say And the now, to is you we're you I'm Europe-based. that to rough, is of America International. XX:XX that

for instance leverage for richer. So And allocations major also certainly, see brand, want a budgets the you get big bottlers ad they they're bigger really opportunities typically, looking reach. They've and to got a global their meaningful you think we've in And as started globally. where to Coca country. their more a reach, have and international Cola, every about dollars the that's

than when blowing speaking, sports broadcast are the global, up in traditional China. rights We no international you when something NBA exponential like generally also and know at look different that professional becomes

good a speaking generally for global thing business model. So our

Rick Davidson

also other in question or is -- team? that terms this just of addition with so, to now international is in the you chain much it's theater how with XX:XX. that much And would a with XX% people? engagement your with -- think natural China, movie How be your the of that And

Ann Hand

Yes.

I'm that gives just so million registered usually us of giving numbers, helpful. big base. and again, you rough global I player So, And but X.X when Wanda XX:XX kind it's of right? and that split China And that's accelerator, definitely say the kind of

Rick Davidson

is this kind the and then question And tougher a question. it's of last

some So and raised so you've forth. just money

growth terms rate and in. revenue finite. operating X, more expenses the on your you're it's your as had estimate about covered? money Is coming probably Is -- burn still about to thing. talking books, of right way that months burn because would rate you're a going a But actually XX now? revenue of kind the any fair than it's now a of good So you because in stands it of that you to without only Is some fair that say

Ann Hand

I and -- Well we market our back. our PPP look those based that million bring feel average it's certainly mean, above don't to monies able money five-day on like six plus the we a being finite. that of in take in lot comfort

Rick Davidson

That clear. is is part part is awesome. that That no, No, awesome. part

Ann Hand

No, I'm no, with no. you.

about did like I calls, of XQ XQ the is cap talked of already our like raise, strategic really this a And the it So was or to growth. That many you're bring believe so really question can that the the that right. talk was our with even capital in kind commercial it raise some larger on always and goal. acceleration. that always strategic that ultimate power accelerate table right about We've are we fund-raising is, then

gas that. That so And is we nothing the with have taken off that. has on our never foot changed

that March, right -- our all we in of right if think execute take That candidly, to bit comfort cash some I negligent, kind be time, interim would bring very opportunities little of would the a that was our didn't feel that I give into I capital shareholder-friendly, could strategically. an of thing shareholders the correctly certainly bring do. And already as I investors feel it would in to in. examine there did if COVID strategy going and the opportunity was that But to

the attractive we to all for anybody us of of of many tell mentioned have deals front were would as have don't on and put call, I company. saw call in thought And kinds so in think I this you, the which I

of was we something thing to with like really landed it really right And through that hard we do. absolutely worked attractive couple on we've the so when right, those. all felt last ferret the to thought investors, And of months quality

point, to done it. But your engagement. of Now belt-tightening surge the nailed kind that some with we've we you But COVID. have said of also had

XX%, with little engagement's so yet the place of -- because between it's still less. or rock XX%. doing headcount same And a bit we're And a a little up it hard kind a bit and our we're

and done We're a anymore. of we're so. in to We we've a where going things contract. that big can the continue office to our motion. need lot So don't renegotiating server There's do we're belt-tightening we

got one costs hand, to to a our those well. lot as volume but in keep we check have Now on infrastructure on try we've more equally, servers,

so, of bit looking end every instead little the items, more. have But opportunities and through see we year. And and trying down we're bring it at in shape to burn to are that extend holding those of if with there one opportunities could to a our the maybe in are the surge engagement of runway we good

Rick Davidson

because growth go your different of company that it's never potential separate I -- in this assume leverage maybe as spectacular. such in rate tell have I count a literally you rate is would you seen just up I've lot I in incredible. as mean something. revenue that a you growth values. The of on have growth the rate. potential early I front to would average has burn graphic

Ann Hand

And Yes. right to doesn't yes, that then, do it feel either.

working it, and I run hit earlier, of said even to And I big hit dealt in -- June. staff -- mean, just I've know -- -- know, it I organizations. XX I've I admit I've I that's I've for, with years where I that's hate lot So been a but I

Rick Davidson

this years plus in June? XX

Ann Hand

a growth, young talk lot this line conviction League, for wants fight shown, our Super always this young companies. the and the for fight staff I much maturity profitability. about revenue, bottom conversation. so working -- has had of for just their done isn't the about to a I've everybody with dealt exciting Yes. It's the team staff. which -- to fight lot usually I've of that of remote kind never in like -- job, talks

think company the be more as we'll mature. the other a But also leaner. I said, be think that crisis side I I better on has will be -- we'll

Rick Davidson

I this opportunities been terms that the is a say a of for much. of I've in -- one just that during where company. crisis, very in is calls. exciting seen conference to you time a This Thank this in I've risk/reward luck. long want horrible Good growth lot

Ann Hand

Thank you. I appreciate that.

Operator

to concludes this Ms. Thank turn the you. Hand back session. for would like At time, question-and-answer closing call this our remarks. to now over I

Ann Hand

continue keep have life you much. everyone the into thank support. bumping to each just conferences, We'll to reporting forward at I'd in not And August. other, standing to appreciate give in We All we'll continuing if for listening and behind our you right. stock to look to real conferences. quarter really virtual Hopefully, and second results Thank like so call. today's gosh, us

I hope great day, friends and and a have well. you hope family I again. are thanks your and So, safe

Operator

and you, Thank ladies This gentlemen. today's concludes teleconference.

for your may at lines you participation. You Thank time. this disconnect your

Super League Enterprise (SLE) 14 May 202020 Q1 Earnings call transcript