SLGG - Earnings call transcript Q2 2022 | Super League Enterprise, Inc.

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Operator

Good afternoon, everyone. And welcome aboard, as I take you to Super League Gaming Metaverse. We thought we would try something a little different this earnings season. And in place of our traditional earnings call, given who we are and what we do, we would show you our world. I am Ann Hand, the CEO and Chair of Super League since 2015. is Chief today Haynes. Offer, me joining Super Financial League's Clayton And

Super me opportunity because positive consumer of love results. how is and we here trends bold of inclusive, that deliver a days, building up to I the and and their who experience And desire social a impact can Gen good pretty let's in and for you? these favorite face stand and it. So this the myth end case, was debunk offers, the is the have technology with that did creation of between an what to League to everybody saying finding intersection safe XX% Well, And gamer it with gaming, enable I be drove creating drive line brands prove and and consumer gaming positive I of activity. bottom lot can Z that is over much gaming a

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partners. recession year-on-year we've change player a it says Our lot growth, relevant revenue communities response our and step to to what with COVID, about our resiliency it greater and a why built continued undeniably brand in in is

Leaguer’s Clayton? a So are yes, call slugs to rocket like or [ph] symbol, a we to nod on as or ship. SLGG Super some like we feel ticker

Clayton Haynes

us and for joining Ann, all thank you Thanks, today.

I'm financials you through here Okay, a to for take level. quarter second the our at of high XXXX

have For shareholders had of for review, of to financial you to those chance of our the quarterly afternoon. results we yet a letter the who a form this posted not quarter XXXX in second

revenues of advertising a strong consumer to revenues nearly in increase the increased of programmatic quarter per to driven percentage in generating Direct over growing sales The XX% and and revenue increase XXXX. sponsorship the The the revenues primarily of quarter consumer Microsoft League's of was XXX% XXXX Now, for advertising which XXX% revenues, second have previous in-stream $X.X increase let's driven and in our revenues total to revenues display for the well into the XXXX. second second XXXX. earnings sponsorship revenue in second XX% advertising video second approximately quarter quarter revenues Servers to advertising of XXX% million accounted which operated in includes and direct the our as in sales property, calls revenues Super compared and for average XXXX XXX% of comprised customers, XX% our in for million quarter brand revenues nearly direct Mineville XX% of second the and an streams. quarter XXXX. digital Advertising in sponsorship our and million XXXX premium XXX% results $X.X across jump goods compared subscriptions Minecraft increased Minehut of digital of to in as total in mentioned second customer quarter XXX,XXX advertising inventory, and to of XX% I and QX by the in sales, rose and official Paradise second the increases game as of of by Total direct consists of and was XXXX. owned Pixel revenue $X.X for revenues and to due increase our revenues, quarter and over right approximately to in

increase to XXXX to compared million $X.X quarter, to increased the in This in revenues. prior due second XXX,XXX of compared the prior cost significant comparable related primarily of quarter year our to quarter. revenues year Turning to in the the

As related revenues in in percent by driven of gross XXXX. to was higher quarter revenues second impact of quarter. a as of to of quarter prior marketing XXXX, one a of of full quarter quarter revenue reflected XX% the Mobcrush these influencer XXXX compared margin second month the was have in second profiles cost compared reduction p the the direct which The the XX% in profit year in average of on

absorbing teams will ad continue is XXXX periods. across the optimizing believe our in opportunities to margin advertising significant and in premium, and us up to future XX% process still QX in drive be our sales for high result the in we the which of inventory, While quality inventory for our margins product increase strong,

of in to premium to reflecting XX model. range target continue future margins XX% our advertising periods We a for the

technology quarter quarter, of million expenses of assets in fiscal in XXXX M&A $X.X personnel operating associated with fiscal comparable with and strong a our to extent connection Also intangible services increased connection of acquired the acquisitions. contributing versus in the activities prior to amortization other digital and activities year due non-cash continuing costs platform $XX.X second acquisitions, reflecting cloud the engagement costs, year During total year were increase million XXXX primarily an XXXX, year XXXX with higher our in properties. and albeit expansion our to our lesser the across fiscal

connection release Moving fiscal non-cash the quarter. the with totaled quarter compared of XXXX increased of acquired XXX,XXX of or to in or to XXXX. quarter the $X.XX per year to in gain intangible year and net is to $X non-cash was of share, XXXX to This XXXX the in that reflecting month million of full a for and of quarter amortization the on second million basis, for XXX,XXX one a Non-cash quarter compared impact amortization in our the debt the amortization million includes quarter compared of note tax which a valuation comparable $X.X a net XXXX second It quarter. to million charges non-cash assets $X.X to GAAP in $X.X loss quarter year intangible of charges per quarter related important totaling stock a assets. the extinguishment non-cash in net second compared prior XXXX partial share compensation second acquisitions, second to of gain $X.X credits, of on million. GAAP the loss $X a million, totaling second of XXXX, related of allowances, comparable included loss prior $X.XX On

stock million of gains. non-cash the excluding intangibles, for loss was non-cash of amortization quarter $X.X non-cash share, charges, the impact $X.XX these net per or of the non-cash Excluding gains, and XXXX second compensation

compared million profit year loss top I revenues, or change the significant the described of was per quarter. $X.X relationships $X.X net reflects pro million expense and the The the related fluctuations to forma net earlier. gross or comparable line and in Our share, prior second for X.XX $X.XX primarily of in per quarter share increase XXXX

XXXX. was for $XX. In quarter to weighted the share of diluted million compared addition, for average quarter the second of X $XX.X XXXX million count the second

quarterly in and SEC measure a results. and compare loss pro financial As is that the with evaluate or we afternoon, income a reminder, our investors can filed use Forma letter to X-K as our this non-GAAP disclosed net believe

revenues plan bottom million. XX.X As $X.X total commitment the and XX, in cash million disclosed line burn is and XXXX $X.X connection we and reported previously with shareholders top line. on expected our million net improving to focus be reducing XX,XX rate with as monthly equity cash control outlook, costs we our range to of continue our costs in average Consistent the based of to June for on in

shares we the closed an facilities, year, combined right right your credit line facility company ability this XXXX, previously disclosed, previously you credit As obligation XXXX March with today. into with with the strategy. growth equity this line liquidity time into and our announced when of May and financing believe the investor an agreement deliver Ann? to strengthen to to $X of million And equity the SEC. us Q&A In terms with in portion underlying subject we stock financing. but And we the up where X.X as of not our common an million the joining of sell against have today's of the to filed entered the provides Thank additional financing presentation. of we in earlier to jump for the I'll for

Ann Hand

Thank you, Clayton.

Now a earnings traditional on call.

community. Buck be covering We excited from Maxim able address to and analysts, but Vander at questions will Scott Group. fielding H.C. Jack Wainwright, to covering Aarde only be our also Reddit questions and [ph] our from from fans I'm our analyst Today not

off. So let's hit it

Unidentified Analyst

night? the org What keeps at question. you challenge up see faces? First do you biggest the as What

Ann Hand

I we can't sell fast enough. that at inventory think thing keeps one is just number me up the our that night

the You sell brands month. Nickelodeon organic That's to and our need and iHeart media know year, growth innovative two massive it we is have have it advertisers forces focused and our that launched at to sales immersive who is. so of people the inventory critical. reaching of about of yet are it's and year, the engaging of M&A valuable, be brands inventory. domestic with Metaverse far on how strategy critical and advertisers and and behalf on sales companies that start and This why that our team and X% and amount see Employing through we a there reach And educated out like we reseller games, to product only was of a last activity highly across working to is already is sales very sell a direct complement that

guidance the there we you of inventory, X% for year opportunity that X% , selling for be giving about that think Well, company? at to double it would only be If the what's XX% this if were would we the XX% XX% least.

question? Next

Unidentified Analyst

recession, slowdown, the level you potential shifts the economic seeing, what decrease deals? As advertising market towards activity as the any or far are size talk demand, of in as

Ann Hand

League a really You makes distinctive this is in what know, Super powerful, position.

and different. Our products are unique so

the there that will As to advertising. units, advertiser right work. in pullback sure in talking some of I be players ad want. opinion, their immersive share of are types I'm dynamic capturing than we through game. players more These billboards, enough Xd said earlier, But such put products entertaining interactively to experience. advertisers are dollars in there small being And my is a percentage an now wallet. of gaming

that XQ what of lot me X thrive. as school our health confidence biggest spend, in of to the continues holiday spend seasons that Now and said, move we selling a is and pipeline because gives fact our into back to

$XXX,XXX. in the size size. about now reported deal more You a about that it'd if And know, $XX,XXX the per you year $XX deal It's it's size the changed, average I had it's ago, talked be pipeline call average to that last in about to fact deal XXXk. Well, was improved. our I

QX, So that League the that allows us were spent names put we Super advertisers solution more more again, can of in to to grab to XX% end work buyers. just in through about League. that share you notable ad Super our shows And end back, coming see to dollars also wallet, repeat

for. the back And more and So they're campaigns to putting work. for we're proving money they're putting coming ROI the looking they're

Dr. said some Nike coming the money the more new even time Spider know to reach audience. try younger and past them not with a some the I seeing look as about our and even that excited activations back they for have vertical repeat, animations, Disney's with and fun in we another Now, for lot for Metaverse, but of Man, Universals that way We've our just is are to see this thing we entrants, Sony the we're great strongest, spending are is of verticals Disney's that companies the like DreamWorks new also think really brands like into The new that diversification that we engage quarter the be like continue Guys, Bad and Kellogg's coming and IP well. mix, to had entertainment and that see Strange as are but in Metaverse did consumers seeing we'll one a we're new their introducing and Hyundai, and games to

Unidentified Analyst

Can you give new any our a focus? color on talent, headcount is challenge hiring and

Ann Hand

the Yeah, we to and now XXXX? for down what say to right of the I'm need year sat so Super ready to to board full we last are talked the we at with sizeable really right to doubling and a now. ramp for the to end have is a relative smart And resources get And in right infrastructure. we're to is like more us plan into with able our year it have what costs, up We now importantly, continued we said, really League. take going in we other did the nice and the headcount and that year. what an and that we growth cost about early us efficiency that QX. position deliver deliver revenue we are find pleased labor this to growth, still the year-on-year we're And to with plan did deliver

have feel earlier, And that shareholder. we you results we we have high levels. additional we've So said headcount really really productivity deliver don't have bring team. as the to to promised the right again, We to the I on

this on to can think deliver. we we capacity have capability even the So team lift the what

Unidentified Analyst

to we reverse minimum meet split? requirements, a consider If will fails League price Super NASDAQ

Ann Hand

time spend take want to this. I a and minute some on

share current everything the we keep Committee our our nearly believe ultimately Super price League, we and consistent to while And constituents. at important with time transparency can value of an Investment most all does doing the high. full our are reflect we're shareholders not Our

As books not We you I'm top said, reiterated that sure our reverse you able felt have many was and I'm on potential last preliminary reason. our split. had guidance seen, and may improved it week our That we to this results a substantially. understand imperative of released constituents things inform line closed top for line to comment like

Unidentified Analyst

Next here? run you of us margins about How year? through remainder What's the to the do your trending rate margins. targeted question, anticipate talk

Ann Hand

question. Super

we is was recall, and you first Super XX% of if last target year our League as that So XX that margin forward. in the to half target trending move

Now last model into had inventory that actually inherited we did ad year, M&A lower a when some products our we some margin.

talked And little QX were so bit the we those our about that rate average were call I to a resetting fact going walking to in you the last that cards, up. and margins back start year we

we so in the to we The And have kind product continue And about that about to end news roadmap. year. walked our that much horizon with the this, to on from now to by XX% we pleased so of nest XX% of say XX% range. XX% is good I'm

units, talk those So what to advertisers. when like to will we Xd are And of that I premium offer Interactive continue our things that products to about can see that CPM grow. and catalog units, inventory catalog, those augment and ad margin we'll continue

stay XX% phase in with XX%, in you'll XX% equally, see a as zone, don't strike like of it that we're the I allows us means it's us deliver. really agencies. reporting education sudden fair XX% to ad advertisers valuation all We margin. awareness to think and the or feel units that us puts market really competitive Now, this going a right And what who a those through of quality of that

Unidentified Analyst

the do borrowing? most plan finance achieved? is achieve profitability do When How profitability, recent given you project until to will of you cost operations increased you

Ann Hand

been achieve the faster. and wanted flatten we having. and flow, expected an operating effectiveness. pull efficiency very I alluded does earlier top and why investors from to We've deal want we reduce yet able, that individually to deal the XX of That's And it that we've sales said that mentioned about to been growth bit chase leaders, to conversation take last a of us to to from in achieve them I see means line Now over also it's to of were places deal a improvement months mean? able start amount Look, our our force XX that the have sales close. in that we individual maximum in year. some and daily forward sustainable capability we're pushing and time doing closer as each the cash bigger the seriously profitability we and deliver clearly sales given a earlier, closer, our effectiveness they of the costs. this That they to What can sizes,

direction to at able we shrinking than we So sales effectiveness say in our will the of originally right moving. our start forecast, breakeven current with pulling operating we that that's the like And expected see now I'm the is that the be why losses year. forward faster that

Unidentified Analyst

a infancy. to few of acquisitions, three strategic growth last the their are segment may due the has fastest see bit still League years, well Over be quite for in as next the Super changed revenue others What established, do the business streams years? you some

Ann Hand

it's still and model most I X% what has earlier, monthly is of know, question. of ad the the about You X% the inventory. I using XX% this available revenue only that's as now the us most that mentioned distinctive our to ahead, right think year right

force, own So the of to improve much others, forces and leverage sales effectiveness about. continue those workforces. partners the we reseller of the all upside sales if can our talked I've

That really are seeing excited we said, is other growth focus the streams. company. primary our So revenue the about two of we're the that on

direct So to first, about consumer. let's talk

own means potential as the You we this more bring the participate Roblox, and operates and announcement have and we Super that an means Super player in But world, O called we expand the economy ahead can also &O plans that worlds that we inventory an just media that and really and it for end League launched of X. we Roblox well. We're to League can Battlegrounds operate. owned operated not for that world excited transaction That ourselves. saw game operated control last in Anime now probably inside [ph] worlds of owned those re week more about

will And revenues. our those DTC so be sources improving of

to In consumer already the our and Minehut. Paradise properties, addition direct Mineville, from Minecraft revenues,we Pixel to extract

As content fun capability. bright Metaverse the our far really revenue, of bringing people people talented, leg are The and them and today, for as to our about this broadcast all of work it's into creating same you third technology for who do really hire me are them. and

us Top longtime eSports compelling create Golf, to Our partner help who hire people professional Ji, to the are their Jing achieve own them advertising team, eSports objectives. tournaments and broadcasts and viewership

revenue. And that we see team. a to of continue I our as bit little a the so proprietary source fantastic nice technology studio And talked about behind

that that the drive their have a own that about I nothing eSports seeing production in like to still content they're games, efficiency talked in And may You like what Endemol the just just to previous them the is talent. Metaverse technology Shine, call is not productions our companies that budgets. allows technology alone, have recalled fact with do or

of bit second of Masters, technology, we as and into turn a to the So SaaS to be an that we wildly think that a behind for we for opportunity were something well that could a produce used product. show, there's season Lego continue game the content popular

an time that our of probably evidence have could And As are of best And to play own. hundreds the to others. our game I've on value of an talked share hours highlights, year. our of on that off mentioned Well, the and post produced them we that's well, week channels, for continued with about partnership we've of believe social content per of to our it's frame where for over that always is before, that deploy today as of receive content, derivative Snapchat, platform we we content. aggregation millions Usually, shorts revenue their highlights rate, stories. player ad top we them every some

potential [ph] growth it about So lot There's a a consumer nice inevitable the not year. and But the is content, nice, growth on them. the achieving of also seasonality it's like direct what an seasonality smooths legs of is really out of revenue to AdMob and year for only the we

Unidentified Analyst

Thank Love the of retaining have touch rebranding you. then and have updates. public, been engaging and for If you if can year? in this works events on you and Halloween isn't Nickelodeon game website the players? successful, new these anything this Do

Ann Hand

all, of about so the thank first Well, you rebranding. for much comments your

just to bolt repeat they count this right, Metaverse fun they've kind lightning get who way really that these me all pause will experiences start nice You be well able to it. engaging when also today? over of We holiday our built to brands to that in experience. that come players to my you and take to we from a these once mean? it's really work is in this it seasonal on And into a when and know, to well, What and say, basis. brand what audience as moment stand on, of And toe what they not it I've lot young super love amazing is games fantastically does galvanize their is this a a And of elusive the events consumer point it becomes different Roblox Spooktacular into as for? kind back, snow inside of them bring our a show yes, taking craft Minehunt simple But advertisers a behind create is decision of reaching every sudden find other that can as flows And as really days temple but narrative, dip the gamers now season. tentpole a fun you're and to them that

Unidentified Analyst

our investors question, what Okay, are and missing? last

Ann Hand

Well, have and really actively dug analyzing investors. of stock you our energy look, there you a to we with have of commitment as the and in our source and lot us Reddit the as well been a from as community trends loyalty the see us, institutional beginning. And and your

our we stock that that is about started have opinion, think I that us eat those our right now, that out is our think really really losses. to The operating way just the devalued. missing fact is exceptional probably the I market growth. the again, thing And those

to beating analyst think decide market delivery the in markets it a the at lot And $XX that. ensuring for to such know, be line power I right will million the or stock environment, can You But says to estimates. about really million $XX go. a tough our be where future guidance the giving ultimately and in

of people that and Day. that are Have hope investors Bye. we Bye watching stock Well, first a thanks we with price. the great this as well a from is new us growth video for that stay excited that is our all at so team. who we investor that and And have Super reasonable a hope League

Super League Enterprise (SLE) 12 Aug 222022 Q2 Earnings call transcript