GAME.V - Earnings call transcript Q4 2022 | Engine Gaming and Media, Inc.

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Operator

Greetings! And welcome to the Engine Gaming and Media, Fiscal Fourth Quarter and Full Year 2022 Conference Call. Please note that this conference call is being recorded. [Operator Instructions].

Before we begin, I would like to caution listeners that comments made by management during this call may include forward-looking statements within the meaning of applicable securities laws. These statements involve material risks and uncertainties, and actual results could differ from those projected in any forward-looking statement due to numerous factors.

August these and uncertainties, fourth MD&A full XXXX, of fiscal see quarter description on year statements available financial for ended a risks EDGAR. please and Engine's and SEDAR For and XXXX XX, its fiscal statements also Important and in Engine’s this on SEDAR and also earnings qualifications are contained distributed release regarding early forward-looking available afternoon, in EDGAR. November of conference accurate of today, information call only time-sensitive Furthermore, XX, contains this the content XXXX. as reflect otherwise Engine circumstances events undertakes to obligation any no this or or the update of revise date after statements to call. to And now the would Mr. I to like turn conference over Lou and of Chief Rogers, Engine Executive Schwartz, Chairman Executive Officer; Media. Gaming and Tom please ahead. you go gentlemen, Thank

Lou Schwartz

Thank from $XX.X in a an year the the The looked for the XX.X% in quarter were million our XXXX. had increased period. substantial million increased annual of key quarter two call. fourth for Total and streams revenue you, XX.X% to joining basis to We for quarter at for of and record year thanks substantial sequential begin, million To XXXX the from XXXX business. us the revenue ago fiscal the everyone in August increases in advertising third revenue, $X.X revenue revenue growth earnings our full on function fiscal ended very growth $XX.X operator, an million when on and revenue total and to same quarter. fourth full a increase year $XX.X SaaS XX, of

revenue fourth of challenging by the $X XX.X% quarter million XX.X% million. fiscal market $XX.X year higher from the search of compared increasingly revenue changes algorithmic year and was million to previous fiscal increased during yielding by to the million, partner Media from fiscal continuously of this its $XX.X to quarter increased Advertising Frankly CPMs its the year. the full supports in methodologies. demand for growth RPMs XX%, to fiscal advertising both XXXX Frankly increasing third period XXXX, revenue advertising XXXX $X fiscal prior customers. XX deliver For conditions network despite and plus optimizing as for

increased increased to For million year increase due full million XX.X% revenue impact to the Sideqik The in SaaS from was of year prior the $X XXXX. higher the the Stream primarily year. the full from sequentially from revenue $X.X recognized and quarter acquisition SaaS the third business. $X.X Hatchet the revenue revenue to million compared million, $X.X quarter SaaS in of X.X% when fiscal for was fourth

$XX exit with annualized we result, million. of a QX an approximately As run SaaS rate

XXXX, million an operations loss $X.X discontinued to million. in loss in full $X a the to line XXXX of to and to to fiscal of million fiscal XXXX loss assets quarter is profitability XX.X% with to of EBITDA XXXX. of which Evident to ongoing relating net XX, leading seeing sustainable fiscal further in adjusted improvement compared adjusted improved significantly full year charges is ended expenses, financial operating of way our this performance, in and cost EBITDA. approximately quarter analysis pathway million when $X.X sequentially a certain compared of operating first fourth EBITDA, to our of trend, third relating of improvement adjusted the our is liabilities XX.X% adjusted our compared loss EBITDA. to efforts revised $XXX,XXX, the the to improvement sequential reduced $XX.X to fiscal estimate loss our When was when the removing best quarter assess is reduction adjusted In growth. Exclusive year improved August a EBITDA of quarter. Adjusted accounting $XX.X for operations, million For million net third discontinued of XXXX, a the $XX.X including EBITDA

our our cash core resulting stated our in with we Additionally, on flow run set basis the fiscal on wins evidenced company our believe our growth of a breakeven which are a narrowing of to goal and to trajectory focus in assets. continuing moment, from rate with client a in XXXX, across We of assets, continued contract recent speak collection part as company streamline Tom extensions. provides in the will spending

agencies, Our sponsors, platforms businesses reach of younger that from the gaming, immersed in demographics. content increasingly proposition. reaching These their game product the hard social Rogers. now growing to Chairman, Tom influencer to become enhancements our creator Executive important and continuing to the call enhance adoption and value the benefit advertisers publishers, and spheres, I'll pass to progressively marketers

Tom Rogers

Lou. Thanks,

minute Let in units. important influencer very on gaming strategically our a for me focus and social

reliable continue results ability the and as a one audiences, company valuable marketing in have analytics platforms, media that array communities to as through define and and the as to data of we result in well that data marketers analytics addressing needs. navigate that, performance marketing marketers gaming so sponsors, gaming the programs. Our platform, companies tech most seller’s broader extremely to brand social influencer provide guide We and our productive highly the can with can

grow targeting a to in providing strength works utilizing tools the As communications more our direct the and both to market, approach continued in advertising targeting have challenges enablement. workflow as social influencers

tap influencers to want game combined streaming of point, product both of audiences. their favorably social As the these developed. report, trends We've capture into expand to outlined have to an To is growth to analysts to begun highly best third able demographic. a the the for years with actionable and industry The Stream as in we an extremely gaming see the millennial, platforms these programs look and in XX researchers gaming sponsors services XX insights Z this consistent value is and enhancements growth and are actionable over video develop and marketing great clients Gen quarter last look four our This realm, number demonstrating marketers is beginning collect programs expand. at marketers, access platforms Hatchet data insights continues want Sideqik. to fourth prized increasingly of valuable and become Stream as increasing of to number Stream to in Sideqik utilize that and exposure have world Hatchet quarter-over-quarter marketing the scale, continues at we of to affiliate creates growing, both capture to to greater to sponsors market The area reach this of XX%, approximately to that significant the be the very serve. and advertisers play particular this clients brand an our opportunity use the Hatchet services asset the and eSports our more for as

it Games. and commerce NVIDIA companies partner with marketing growing platforms Activision, sphere. community. Music the suite Octagon. meet influencer its Ubisoft, added Virgin social clients communities, creator analytics of Fanatics the enabling in ever-expanding expanding traction the Logitech, navigating with the social Universal list of platform complex tools marketer and of addition of our while and many vital reliable to audience contract particularly list influencer to and social necessary extensions Blizzard, to analytics, The and navigating FIFA, an Employing and evident Sideqik the influencer our Hatchet precise to and invaluable Our are signed BenQ of medium Stream monumental how the and PUBG, from best in where determine to companies, and leveraging included offeringsmake Group, gaming features extensions Nike, in Microsoft, Riot leverage Sideqik sports is Renewals Voyages blue-chip FoodPanda, technology. their its

reductions as that broadly, to cost our our our quarter-over-quarter substantially tough Turning The executing quarter, plan very as have have results. sequential EBITDA the indicated company could mentioned. environment, a a we prior of that into reduce in the well calls on strengths are trend will first losses, continue demonstrated we we strong more focusing Lou in in on key evidenced certainly

feel previously discussions parties with create also is environment an this scale. various assessing is how have we that ripe stated, greater we that to are As for

strategic providing focus process this forward result to efforts of as company continue growth that opportunity are initiating to scale, our update a and process in on our progresses. and and rapidly synergies. in to stated increasing narrow catalyzing will cost goals revenue We the look an process We confident further the for this our finding significant deliver of

we'll think I Thank take now questions. few you. a

Operator

Instructions]. [Operator Thank you.

with with proceed from Our Michael first Kupinski Markets. question Capital comes the questions. Please Noble your of line

Michael Kupinski

good a then have recent some of some pandemic. data about conflicting couple more in some foot the XX,XXX that questions There's Thank and specific. view you interest I post been other afternoon. gaming press provides and out there

if that and know difference waning eSports we maybe can the explain talk and just which You there just there in data about data you might grown, media what have indicated do been your there there suggested view some wondering that, and that in color originally how that was you support? I'm some interest has was has some I press wondering pandemic, if recent was the And interest. of there. what's the could but increased out play, the an following

Tom Rogers

goes the great been question. viewership our what higher And the that Stream Hatchet, really from of a released eSports gaming never unit of has It's XX% is actually third their evident globally. And depths tracked. in It's recently it’s an analytics really this heart XXXX report year-over-year pandemic to reached And the It rate above global terms quarter accelerated in viewership viewership growth eSports actually time. year. last growth of viewership.

streaming media authentic better suites, those finding the competitive and intelligence real-time dashboards, to audiences purposes, discovery kind of tools the help navigate activate space are media want need playing to aberrant most to been brands them that they exceptionally the specific The games, of clearly of viewing audiences, audiences. people has be the whether if creates sponsors live not the think just how can are to that much that that connect brands there connect tools, that data a are, is successfully so value, our to that that difficult that eSports business be provide vast media. audiences what terms hungry are that to more to those there. mature sometimes demographics assessment able issue find those the creator what the some for unusual very amount realized. can and in audience reach Really help attracting successfully highly for a space highly in earned what those become – among reach point about tools really will considered dashboards those to is about our fully connect was our to advertisers, we're help tools, eSports of and just So is finding and live eSports in have The our space the and this understanding we speaks traditional above issue we our is those give audiences, the I brands is ways locked are younger to our streaming audiences and there, bring. trend to audiences sponsors skepticism What historical those growth

So, I hope to that. that connects question to we're do looking exploit to what your trend

Michael Kupinski

has Definitely. was youth of And do broader which creation. gaming beyond TikTok that your begun just broader in you focus demographic. your your demographic influence given in appeal participate on, audiences demographic wondering, I focus? to on the Well, younger you'll think has thoughts marketing younger a the social still obviously content show the

Tom Rogers

and Yes, the obviously specific social focus we regardless that's measuring we think gaming over is when gaming found have like have social content the media for for on various has us, or very because because and demand platforms it that's we distinct obviously on competitive streaming creators and trend insights. consumption live great role by or that increased some content well-known point that content years gaming But challenges older huge YouTube connecting measure comes and platforms. XX analyze or provide of is created actually we Twitch discovering important media, those traditional We which other a an on demographics and to where and experience, clarify, content we influencers, to TikTok, Gaming, of platform. whether a globally, the platforms

positive And so to broadening its has a TikTok, rise and than for it used the fact have greater the very trend macro demographic demographics overall a as it of us. that that usage, older includes

Michael Kupinski

up put is, just buck the And you you. of of to on and revenues and kind able of about bit kind – about unique the you this is goes kind of down know advertising a of out in you're drilling in trend environment. Got nice seeing industry particularly the little revenue the in improvement environment growth there? in some how kind your you against advertising, what's what tough a your just then and [ph] headwinds to Can the talk revenues,

Lou Schwartz

by all during CPMs Sure. one, discovery a That The managing really advertising team We've I'll would They been from take diversifying with our importantly, the inventory the XXXX. improvement XX% our between is said, targeted. are and higher Listen, to our tremendous algorithmic advertising very say including to by brand been able RPMs driving of I they've that and and primarily CPM we've a values our we've has partners. and period, fiscal grow challenging Mike. demand Google accomplished our job safe, our network audiences. XXXX our to that demand engage supply yield done sites search delivery inventory. that proven seen. network changes, in highly through more our

advertisers a advertising audience. against willing safe premium, sort to a a So are pay for us safe network for of and right,

Michael Kupinski

efforts? see bit improvement further are fiscal be looking Got little us of you, Lou. next we we the And Can this look thoughts through efforts? about those just – cycling we for? probably your And you. and going to that reduction kind adjusted of at Are know a into going in talk the they indicated glimpse most bit still quarter. cost adjusted when Can about you should for cost talk maybe about I you little how fiscal cycling what the EBITDA first improvement of ongoing? your you're are is what a should reduction a Are you in year? you EBITDA give

Lou Schwartz

in Well, and you as quarters. through in P&L. but of and release, that's couple as sort two, seen One, expense. business of BXB the reductions combination shown corporate know, sequential just EBITDA improvement stated of a of result sort the the on time And things. of year-over-year cost last some came improvement our take that both of from we these sort our the non-corporate highlighted, our and a as refocusing both also to elements, adjusted sort figures, over you of flow We've we've

rightsizing something to is cash in sort organization our and rate continue and top see focused a we achieving QX, absolutely rate, burn of subsequent that mind. on breakeven cash extremely about flow quarters. the you'll in is We've and think been addressing into of I XXXX basis. improvement run This disciplined sort remain of on XXXX

Michael Kupinski

guys. have. all Great! you That's I Thank

Lou Schwartz

Thanks Mike.

Tom Rogers

Mike. Thanks

Operator

And Genuity. with the your with proceed Tilchen question our Jason line from Canaccord of Please question. next comes

Jason Tilchen

question. great! Yeah, Thanks for the taking

quarter follow-up August quick in advertising about of and as on business. you if advertising some a lot you the a strong seen results reasons so a over for wondering if fiscal Just XX, the really months on QX. strength talked the that held Obviously, why go of just The maybe first few trends saw comment could the seasonally ended you've some just business? important has of the you past up quarter into sort you

Lou Schwartz

digital I we've inventory Jason! if feel been have of offset, hey publishing the start advertising that's we've maintain impact could managing our expose of safety mean sort on of our for augment, the and – inventory seen their networks. premium of behalf CPM particularly And I value and some supply listen, that media to continued and nimble some network partners near like really partner Tom, us some we and But on certainly are that digital seeing terms some in because of know right, patterns we've the peers been we've that the what improvement the business, you'd been been of able demand sort we able traffic in sort – to headwinds our highlighted algorithmic other to not Yes, enabled and free. changes material the of with have values been to anywhere demand the able peers of from with productive our the seen, and efficient The as some we've been of sort RPM. Google. because of customers. partners experienced, really from to some highly – to seeing the you we've offset we've we're the that of

Tom Rogers

somewhat has advertising given inventory and Yes, has in contributed to market through upgrade I in of the I more countered offer broadly upgrades to shifts is more increasingly downdraft our inventory us think the to the combination that supplementing just shifts and the ability think also have that, those raise an price we video-oriented experiencing. clearly that, exchanges that inventory of the and the

advertising said, those, and has in sure tough and are of publishers a hit able from groups Lou to headwinds. making algorithms time-to-time are greater bit can handle a environment to we've which Google our of more always As which been and when really seen being challenge that changes adjust algorithmic is changed challenge we those takes operating direct the time

Jason Tilchen

really Thanks helpful. that's a lot,

that seen, it pace blue-chip past we've combination Is Sideqik in as they else One, approaching you how that's you? the Just quarters. and of there as Is that regards to could over when on there. on coming to it two going Hatchet anything your of Are touch simple are Stream strategy, ones; other few of sort the comes lot? a sort the talked you've success a of to just quick go-to-market about wins Maybe brands? these you those accelerating just these

Tom Rogers

brands, space, the media understand among a brings sector gaming in in very us. fragmentation the and for significantly talk between over gaming of able streaming we've to what we particular cross we've is where breadth looking the certainly the formidable been there's reputation that That's world influencers differentiating that is gaming and that live and area have gaming tying the social terms that been Sideqik social to that media. to to Well, do get increasingly a

other we've and clients thing obviously to us. involved about that to chip blue The we talked have great really here brands some point that I since with want are

really in advertising the of also some suffering targeting of their resources and is for towards businesses. the They to small tailored what's going efficiency in spend, being an consequences self-served platform world allocate medium-sized solution terms and are of is or social to able on increasingly influencer social marketing Our a too opportunity. influencer having

social influencer course, easy smaller world not business a for is Of that navigate. to

so to toward You success, cut want building on exist and of and really to be you simply of communicate SMB to payment friction that to really operation, for is geared the capability would important one and being and to a that only focused is marketing the we able easily I through discover and That a very need that brands. for lot we're community small a can doing. talk our that, otherwise have part resource a don't platform have provide the

Jason Tilchen

half One very positioning on comments around Another you think that Great! or helpful year? reductions expense improving feel going fiscal think additional you that to raise year 'XX? for of can in cash Do of potentially the explanation there. flow throughout breakeven just 'XX, you improvements that you or one, the cash the that last just things how and in of maybe the need know maybe and first need will talk a that – current trajectory burn the rate reduce that know about the run help just fiscal capital you do that to to of there's be the you cadence like

Lou Schwartz

so respond let me Yes, that. to

So of cash. million $X.X quarter we our with finished

of to opportunity focused extend process. been you to a sort create an on rationalizing any flow deliver and the You future strategic know terms company sort be you That been in OpEx expect sort runway. rightsizing of in and But XXXX. quarters, sort the getting That scale strategic the dilution and on be of made is that we've and said, sort a that to in to going we've the some aggressive and structure sort cash that we've to think we're of in continue our as and to sort the OpEx of as of ability it better process growth will on we by And forward. you intended I of more we'll preserving continued much growth potential middle right breakeven to for process, our strategic company in and Mike, the know adjustments cost to I the finance mentioned in evident able how future through past shareholder-friendly terms of create will future. of our of of we to stand-alone flow cash remain reducing know remain basis through sort know

Jason Tilchen

Thanks lot. Great! a

Operator

questions. to like to with are There any at comments. I would additional over this floor no turn And for Lou analysts closing time, the back

Lou Schwartz

today. for as forward you updated Well, everyone keeping you We thank to your Bye-bye! progress. we Thank look much very you make again attending. attendance further for

Operator

conference. today's concludes This

You may day! for time. this have Thank participation your disconnect lines and great a at you your

Engine Gaming and Media (GAME) 30 Nov 222022 Q4 Earnings call transcript