AESE - Earnings call transcript Q2 2021 | Allied Gaming & Entertainment Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Allied Esports Entertainment Second Quarter 2021 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. now Investor turn Relations. would to conference I Glassen, Lasse Instructions] like the to over [Operator Please ahead. go

Lasse Glassen

Thank you, call. operator. Allied Esports Good afternoon, and XXXX quarter welcome second results conference Entertainment's to the

Esports Speaking call session. for Wu; Chief Esports is Officer, on Financial the Operations who Executive Hung. Hannigan, the today Allied question-and-answer and Jud the Tony leading Officer, Entertainment's is is Claire Chief Allied available also

forward-looking management, contain please responses I statements. remember goal intended Actual our factors variety targeting, forward-looking words statements. over turn a these Before may, the to and may the the materially should, and of of results factors prepared are Exchange plan, discussed could, from documents as public in identify to Securities such to questions risk due by the statements, intend, and filings, believe, forward-looking call Words including Commission. remarks anticipate, in to expect, estimate, variations similar that differ expressions with will, such filed Company's discussed could those and seek, judgment, implied

update Company whether are events no believes new or expectations Company statements such will forward-looking that it upon attained. future no reasonable reflected as assumptions, be a The in result the the can to the statements, expectations obligation give Although any information, based forward-looking assurances undertakes of otherwise.

and financial In turn to call of addition, Claire? Claire investors. my financial afternoon Entertainment's reconciliations certain Esports on website The explanation available such Company's With measures. over this measures non-GAAP non-GAAP to to release, of of presented useful earnings Wu. was GAAP why such the an Allied to the non-GAAP the represents information now measures, appropriate that, pleasure presents the it's believes this measure is are financial the and call CEO, Company financial which issued in definitions Company's

Claire Wu

the I AESE, this key by Thank then an everyone recent joining will of at transition and overview and from quarter. this afternoon. you, thank past you, leadership us for the operating highlights begin Lasse, discussing

our Board Officer In on the quarter and path. will on which management today will Financial evaluate update the team Esports our Directors of Similar provide our as exciting operations reporting strategies we to pertain includes addition, quarters, to the I future our financials corporate an follow operations, with are TopCo Tony recent continuing Hung our Chief the company's details additional performance. second Allied financial under expenses. the

to to as the As period in announced, WPT therefore the sale the three Tour for previously XX, the the for the quarter, day of and the well just about operations as the completed year. discontinued of a Element very operations World been General and six as earlier presented honored are we five comparable results Poker third I'm company. President to the appointed Having lead Counsel June to and of role prior month ago, periods AESE Partners or the weeks WPT ended of CEO, day

Counsel to for is General as you Citron. the Capital, Counsel firm are & law believe this Vice of I well Asia than familiar background, as York my Pacific Most Hutcher XX-years with those For Senior of and President, as of experience relevant may not who New Davidoff AESE. more Inc., the at

it helped corporate experience who have and On for entire had our Board. became Throughout believe to business the well revenue. traded Counsel AESE and from to pandemic, U.S. career, of of AESE increased President an that, I Frank well by legal and transactions, prior and as the extensive the the move foot General and quarter-over-quarter continue positions, of results to thanks future the and quarter demonstrated driven mergers traffic steady years express will publicly at I'm capital look two overview of our in COVID-XX market to and in-person we pursuit. of benefit we planning and serve and pandemic. the led going the served pillar like I'd addition, wish accepting Ng transactions gratitude social best Las CEO, to Esports We return the as let's events of and strategic serve securities XX% AESE Overall, to by Esports as emerged ago, his of on restructuring. In the pleased behalf of the the Director forward. navigate live was with also business regulations, track as complexities gatherings. cross-border With in to the company since our and the ahead XXXX. the progress the future growth for to team, COVID-XX This I recovery continue as gradual as him this course company from the in the my Vegas acquisitions, second will I all growth business, of the our slowly

we our second contributions during Content In quarter, Multiplatform the the saw pillar. revenue addition, from early

the revenue While be several our of we last building-out within capabilities pillar. quarters will events made resumption Multiplatform Esports of the over term, have important Content in the our near driver growth also in-person an good progress

for cash utilization the my arm $XXX production announced details business. later our this will significant of financial for value I cash our During maximize With the completed transaction quarter, Studios, is the of original to AE through our initiative a million sale we the launch we liquidity services exploratory on shareholder Element all-cash an end, quarter strategic WPT concluding of Esports. content subsequent to in key remarks. and of significantly in as look which it to we of and for Partners have will of finally, development, WPT flexibility million. The partners we as as position. milestone important sale additional Allied the our provide And today, serve process storytelling $XXX over improves Esports that's

XX April, players world's XX% Vegas was quarter. competition with Lockdown in also all the compared a opportunities a first continues deployed approximately animated live edition In events tournament in its the Xsens. in increase proprietary players the teams, the Esports the We Between for all company as online our XX weekly players lifted motion Esport the the Proprietary day in technology comparing of quarter, partnership quarter and of were in X. and hosted four production. Esports arena in were tournament including in event highlights quarter the quarter, the of at our from of Las online format the tournament third-party Vegas second tutorial competed resulted operational and XX XXX% production, and commentators This restrictions an production adding winner with from a Series prior events take to its for as tournament, saw new quarter, X,XXX better. in-person up capture for and cautionary recovery prior new a turn of production third production, to three the to services, business. Allied XX,XXX to which Allied in third-party the United Legend net fighting quarter, the start second let's on in increased June wagering Now, around the of pandemic the [ph], HyperX that our company second The productions leader second included which Arena to demand States. Las projected schedule, Esports Esports over XXXX, tournament to COVID-XX draw game

the official Arena room the and During partner monitor announced gaming the of ViewSonic Esports quarter, Vegas. we as the HyperX streamer Las

opportunity have Esports As the in the all on to players of play indexed brand this Allied part of North Truck gaming partnership, in America ViewSonic’s and on arena monitor.

in programming content Night and sponsor creation around on the Esports Speedway. and activations Saturday potato with other chips organizations our Additionally, data partnered snacks and XX-XX Zest Esports Lockdown [ph] with company Esports brand in arena

will increased across events driven was Europe Latin America, produce with Trovo, tournament quarter-over-quarter. increase for throughout backed platform fold new whom nearly XX Third-party over Tencent tournaments XXX XXXX. and our streaming by North organization America significant partnership The Esports

America addition, well Esports bubble as In host continue as for Championship. June, to Zombies to COVID-XX the the the Rainbow Arena Six North in-person early of a connect, restrictions prior serve production HyperX of as the FaceIT World safe the environment lifting of in

the Raceway working Speedway, Allied Stop this on a Partners to Properties, gaming Truck the the with million the second Although off live continue bring we'll from on around to and of saw [ph] to Multiplatform green with throughout quarter alone this this delivered advance content earlier fall. plans continue the previous Seven XXXX. sales rest XX% events and Throughout the the Speedway, events pandemic Content strategy strategy X.X recently summer announced November more and York Civic in the A The Esports this Superspeedway, [indiscernible] fans Speedway, was foundational Talladega be pillar. end, will channel remain lunching quarter. million its Simon Twitch, effort by NASCAR and International the month, definitive the we To and country. track live New XX Altogether, company's company which the XX the International Daytona to over the Kansas a expansion hold. hour our XX locked Esports Twitch Esports activations have Brookfield company's Tour in Property stops the at Michigan making a on the strategy hour increased of into effort made has Allied followers

platforms Through pop original years leverage content This partners Expo of content of clients partners, to digital of digital during operations and The the at the culture, will AE entertainment, Esports for beginning the project will division solution hours over creation a highlighted a of of on those the of see strong the with around MuxIP beginning Esports our hit we the content as looking air the distribution tournament top distribution running content have turnkey Studios additional gaming, opportunities believe demand OTT ground over our content the and over Esports some studio with on desktop concurrently variety XXX series spanning on on for a and Allied design XX the off our on in company season celebratory Twitch.tv/TwitchSports. the as celebrities production class hold The AE we versions had showdown broadcast. services music and content golf production world. of the which have of with such for series kicks development, have virtual of storytelling the programming, Twitch. content hours streamers Distribution August Studios from for shows competing produce arm top we feature the of second Esports and tournament I and first distribute the industries, platforms. continue to announced will see growing call, serve of live to on library, As world in this XX agreement, XXX now our the announced Concurrently, Studios, or quarter. and interactive home game. the the We the our course our second our new is of to spot. the of of AE seven for library, and is production the and Esports the facilities streaming through world. outside participated the version

over I interest in and financials the Esports Tony our quarter operations. the second update like The has to a popularity of strategies in COVID-XX I details, longer-term Before also to the gaming during turn discuss driven quick and growth for provide our it on significant would to company's pandemic Esports. Esports more rapid

value. strategic accelerate have the possible sale order to our sale explore for WPT in to the With the complete, shareholder a business, East Coast progress including plan to begun maximize we along the options

with the of the that identified our the the gaming, of execute business WPT $XXX definitive part sale we money irrespective Street In the merge there business. sectors. sale With has active we been pro Esports process, are Esports negotiations debt includes continue the explore of purchase or with in this led existing any totals buyer forma Capital of business and other actively to to entertainment, including business intend to working available no from operate position will Esports to of business, As no result as to meantime, plan. a On a With are and with opportunities Markets we said, million. Lake Esports in process Advisor. cash yet outstanding the may the our business. along become acquire the cash that business This and sale cash online our gaming any a real future, basis,

business to company's proven limit the management industry, and a includes EBITDA. team the to business a any and experienced target not business. in assist does its this to engage adjusted The or rest to capital Key company the model company band expects of to process. with accretion to the efforts geographic prospective criteria itself in However, particular location identify a for potential plan

However, asset want business at contemplation. reorganization to or do the or merger, combinations under it not I any acquisition, do present, make consideration other we have clear that specific

an our And pursuit results. on call time, progress provide you like update on Tony That my this the our our concludes to prepared remarks. turn will financial an future with update with We for on respect to Hung, over this to Tony? calls. I'd at second quarter CFO

Tony Hung

Thank today. Good afternoon, you everyone, you, thank for us Claire. and joining

While the in cautionary recovery the meaningful improvements June also began as second business quarter. Vegas, Demand this the in were increased pandemic beginning services production to Esports to tournament our we of and Allied lifted reopen. continues impact the in and economies experienced across and country saw restrictions for our Las quarter,

and continue Studios AE building second-half to Multiplatform Esports the addition, pillar make of year. improved In of we've in Allied to of is and Momentum our the continued quarter. results Content a driving on division is new company the announced well-positioned the during development progress the

let's second XX.X% revenues quarter compared the $X.X results second million Total quarter for increased from second to XXXX. operations. quarter to our continuing Now, turn to the of

$X.X Looking in at in results XXXX. the increased of greater second detail, compared $X.X to the million second revenues X.X% quarter for in-person to million, quarter these

lingering result where offset to a at loosened Vegas. were truck pandemic and COVID-XX number by a restrictions increase in activation Las of and partially revenues hours decrease and social Europe, HyperX remain lack concern. in-person Arena operating a in in of the events, Esports of of in-person due the distancing sponsorship measures The As of revenue events the a effects increased our

$X.X tournament backed pillar $X.X the Tencent million quarter, $X.X million quarter result Content $X.X million This partnership year our for of factors. Trovo, in revenues second was the were several of against our investment Multiplatform the compared the and ESA, charge quarter down partially the expenses The Total the of new to second the decrease second driven Our one-time prior generated organization from impairment primarily by decrease period. was during platform. by with in streaming costs year-over-year for offset XXXX. million

by First, recovery period, in-person the in-person and pillar XX% events year expenses to and compared as XX.X%, increased marketing and the costs selling of grew. by increased live expenses prior

XX% This compared temporary levels to salaries and XXXX. increased second general administrative due as expenses was Second, to increase by in the as this increases sale COVID quarter and well the XXXX, in second professional of connection legal original returning to the reaction lower the year-over-year quarter in salaries to of in WPT. with primarily incurred of quarter as versus pandemic, past XXXX, in fees

of from a of management expense expense debt occurred our in period. net all prior was loss $X.X in $X.X for compared Net actively $X.X was loss in the million improvement the spending a a was to quarter to reduce of year-over-year from million loss period. prioritize of to that $X.X a continue conversion and compared expense We primarily the all second second the non-essential quarter million, items. million $XX.X costs of and inducement non-cash for year of loss quarter million, result The our continuing XXXX. EBITDA a Adjusted second across one-time operations of refinancing year prior the

cash July of fund XX, XX, the position which closing million million at our cash the Allied million available to sheet, transaction current XX of moving for to the XXXX, in but our WPT. and $X.X $X.X XXXX. cash position restricted and restricted June in sale, our Esports $X.X million, to at June of business included of cash which million was included XXXX, of and total WPT balance totaled until Now, with assets including $XX.X of sale the cash compares business WPT million connection $X held $XX.X on held cash at This

June notes we of principle, and XX, had totaling WPT million sale. debt concurrent convertible was which $X.X paid bridge off gross the As of with in closing XXXX, the

business. to continue our We Esports see progress in

Our pandemic. in-person emerge we we are from of events activity excited to booked the more the slowly pillar is for traction as gaining remainder see and year, the and

in managing strategic costs the explore cash to WPT judiciously The value. We also our sale maximize our continue liquidity for while our and position Content options significant expenses. received our business shareholder to and strengthens the Esports also from strengthen offerings Multiplatform pillar, of

in are prepared and the the improve underway concludes of like year. the to not is the Q&A. of we to in open clear lines to recovery remarks, yet and we continue the our the from certainly effects expect our While the That second-half business we now would pandemic, to Operator?

Operator

Thank you.

question now go comes Colliers from Soderberg with begin will We Please The Securities. first [Operator question-and-answer session. Instructions] ahead. the Derek

Unidentified Analyst

to there Ryan out detail thank M&A prioritizing more can cash. is for or moment how price. and wonder this is a favorable Hi, your Can you on producing And the you're companies real you I my at gaming, company profitable detail you some money environment growing would ideal content using find great? on and taking on at the environment Derek, more for provide in if Business describe any that target? reasonable the the maybe questions. be

Claire Wu

Derek. question. gaming the in particular limit intend itself million potential deal, business opportunities identify plan mentioned with this online anything includes that entertainment, you we you or many to money possible to the and XXX like cash with company have said, does WPT that business. to other do from And you explore sectors. Yes, in And its for any efforts being topic? With real Hi, Thank Tony, to the M&A location not to that gaming, add industry apparently to business.

Tony Hung

in M&A that's watching described, I market And obviously terms of good the M&A, Ryan, you've been that thing Claire at probably think, I carefully. No, for and mandate the a is as active we following activities. something think we're pretty think very I as has Yeah. pretty been broad looking have that

to under deal do have poor a timeframe, terms. under particular kind boxed a in economic to not do have it we're deal particular of and So then to

that flexibility a think deal us be I value. lot to shareholder find able the to going right So maximize gives to that's more

Unidentified Analyst

I'm you expectations us Yeah. and OpEx where understand rest for year? your wondering Thank you. help what could Thank of the follow-up, we And as a burn for should be are, the if you. cash modeling

Tony Hung

me ahead Hey, with go to Claire you do want that?

Claire Wu

Regarding the and – then can to details. I you to answer turn going first for I’m

Esports and be strategy grow company. efficient to cash while the expense continue the time same burn to reduce currently at Regarding will our more become a of revenues, business,

our excited are of about revenue back. a of terms in-person And In this the bumping is growth Content revenue very the pillar. growth, we Multiplatform

far company, team to of as and the fresh more As of costs details. a which the take efficiency at well the And I'm side, our as to now, the new of Tony to add the this let me business most profitable. leading expense, improve CEO elements as look all turn as are

Tony Hung

a Yeah. I our from follow-up And I earnings you've of somewhere $XXX,XXX just short-term, burning guess, on to Esports corporate said, million release, Ryan, our Claire expenses. of historically, of a around kind for TopCo well to as between kind the been business say $X what as seen the month kind would we've probably, as

going so be to a help identify mentioned, I down bring nice potential obviously, to that kind as to would at going time. But be placeholder. Claire looking efficiencies we're more for and have ways also, the of kind short-term to expect forward, And that revenue operational of over opportunities, new

Unidentified Analyst

much. very you Thank

Tony Hung

Sure.

Operator

conference question-and-answer turn like any for the closing I remarks. to management the concludes back This over session. to would

Claire Wu

November. today's again we when stay We for our third support Thank speaking call. your please healthy. afternoon. quarter and and you us you for Thank joining this with to for time on safe attention forward And report you look again, and in your XXXX

Operator

conference call. today's concludes This

a your participating, disconnect for You day. Thank have may and pleasant lines. you

Allied Gaming & Entertainment (AGAE) 17 Aug 212021 Q2 Earnings call transcript