Allied Gaming & Entertainment Announces First Quarter 2024 Financial Results
Allied Gaming & Entertainment (NASDAQ: AGAE) reported its first quarter 2024 financial results, highlighting significant progress. The company achieved total revenues of $2.4 million, nearly doubling from $1.2 million in Q1 2023, mainly due to increased casual mobile gaming revenues from its investment in Z-Tech.
Total costs and expenses rose by 31% to $5.1 million, primarily driven by Z-Tech-related expenditures. The net loss improved slightly to $1.8 million from $1.9 million the previous year. Adjusted EBITDA loss also improved to $1.7 million from $2.0 million.
As of March 31, 2024, AGAE's cash and short-term investments were $83.3 million, up from $78.6 million at the end of 2023, with working capital increasing to $67.2 million. The company also produced 63 events in Q1 2024 and announced a partnership with World Poker Tour and Wynn Macau for an event in June.
- Total revenues increased 99% to $2.4 million compared to $1.2 million in Q1 2023.
- Net loss improved to $1.8 million from $1.9 million year-over-year.
- Adjusted EBITDA loss improved to $1.7 million from $2.0 million.
- Cash and short-term investments rose to $83.3 million from $78.6 million at the end of 2023.
- Working capital increased to $67.2 million from $66.4 million.
- Produced 63 events, including 33 proprietary events and 30 third-party events.
- Announced a partnership with World Poker Tour and Wynn Macau for an event in June 2024.
- Total costs and expenses increased by 31% to $5.1 million.
- Net loss of $1.8 million indicates the company is still not profitable.
- Adjusted EBITDA loss of $1.7 million shows ongoing operational challenges.
Insights
The financial results reveal significant growth in total revenues, which doubled, reaching
Given these mixed results, the company is showing potential through revenue growth but is still facing substantial costs. Investors should weigh the revenue growth against ongoing expenses and evaluate future profitability prospects.
The impressive revenue growth, primarily from the investment in Z-Tech, highlights Allied Gaming & Entertainment's strategy to capitalize on the booming gaming and entertainment market. The company's operational update shows its active engagement in both proprietary and third-party events, demonstrating a robust and diversified event portfolio. The partnership with World Poker Tour and Wynn Macau for an event in June suggests strategic moves to expand its market footprint.
However, the increased costs and expenses, especially related to promotions and R&D, raise questions about the sustainability of this growth. The company needs to balance between capturing market share and managing costs effectively to ensure long-term profitability.
Overall, the company's efforts to expand and capture more of the gaming and entertainment market are promising but come with financial challenges that need careful monitoring.
The strategic investment in Z-Tech appears to be paying off, significantly boosting the company's revenues. Z-Tech's performance in the casual mobile gaming segment is noteworthy, as this market continues to grow and attract diverse demographics. The increased spend on R&D is a positive sign that the company is committed to innovation and staying competitive in a rapidly evolving industry.
However, it's important to monitor how these investments translate into sustained user engagement and monetization. The competitive landscape in mobile gaming is intense and continual innovation is necessary to maintain and grow market share. Z-Tech's trajectory will be vital for Allied Gaming & Entertainment's future revenue streams.
"After building momentum throughout 2023, we’ve had a strong start to the year," stated Yinghua Chen, Chief Executive Officer of AGAE. "Along with the exciting events we have confirmed for the second quarter, we have a strong pipeline of opportunities in front of us, both locally and abroad throughout 2024. In addition, Z-Tech is trending well for the remainder of the year as we look to further capitalize on the massive and growing market of gaming & entertainment."
First Quarter 2024 Financial Results
Revenues: Total revenues of
Costs and expenses: Total costs and expenses were
Net loss for the first quarter of 2024 improved to
Furthermore, adjusted EBITDA loss was
Balance Sheet
As of March 31, 2024, the Company had a cash and short-term investments position of
Operational Update
Allied Esports produced 63 events in the first quarter of 2024, with 33 proprietary events and 30 third-party events. Third-party events were highlighted by PlayVS Live: Gridiron Showdown; Second Annual P&G Battle of the Paddles at Super Bowl LVIII; 3rd Annual Battle for Charity Esports Tournament; Gitlab; and the Blitz Experience.
Corporate Developments
During the quarter, AGAE announced a partnership with World Poker Tour®, (“WPT®”), and Wynn Macau, in which the companies will work together to bring an inaugural WPT event to
First Quarter 2024 Conference Call
The Company will host a conference call today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its first quarter 2024 financial results. Participants may join the conference call by dialing 1-877-407-0792 (
A live webcast of the conference call will also be available on Allied Gaming & Entertainment’s Investor Relations site at ir.alliedgaming.gg. Additionally, financial information presented on the call will be available on Allied Gaming & Entertainment’s Investor Relations site. For those unable to participate in the conference call, a telephonic replay of the call will also be available shortly after the completion of the call, until 11:59 p.m. Eastern Time on Monday, May 27, 2024, by dialing 1-844-512-2921 (
About Allied Gaming & Entertainment
Allied Gaming & Entertainment Inc. (Nasdaq: AGAE) is a global experiential entertainment company focused on providing a growing world of gamers and concertgoers with unique experiences through renowned assets, products and services. For more information, visit alliedgaming.gg.
Non-GAAP Financial Measures
As a supplement to our financial measures presented in accordance with
The Company provides net income (loss) and earnings (loss) per share in accordance with GAAP. In addition, the Company provides EBITDA (defined as GAAP net income (loss) from continuing operations before interest (income) expense, income taxes, depreciation, and amortization). The Company defines “Adjusted EBITDA” as EBITDA excluding certain non-cash and non-recurring charges, such as stock-based compensation, business acquisition transaction costs and impairment expense.
In the future, the Company may also consider whether other items should also be excluded in calculating the non-GAAP financial measures used by the Company. Management believes that the presentation of these non-GAAP financial measures provides investors with additional useful information to measure the Company’s financial and operating performance. In particular, these measures facilitate comparison of our operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company’s core business, operating results, or future outlook. Additionally, we consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Internally, management uses these non-GAAP financial measures, along with others, in assessing the Company’s operating results, measuring compliance with any applicable requirements of the Company’s debt financing agreements in place at such time, as well as in planning and forecasting.
The Company’s non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles, and our non-GAAP definitions of the “EBITDA” and “Adjusted EBITDA” do not have a standardized meaning. Therefore, other companies may use the same or similarly named measures, but include or exclude different items, which may not provide investors a comparable view of the Company’s performance in relation to other companies.
Management compensates for the limitations resulting from the exclusion of these items by considering the impact of the items separately and by considering the Company’s GAAP, as well as non-GAAP, financial results and outlook, and by presenting the most comparable GAAP measures directly ahead of non-GAAP measures, and by providing a reconciliation that indicates and describes the adjustments made.
Forward-Looking Statements
This communication contains certain forward-looking statements under federal securities laws. Forward-looking statements may include our statements regarding our goals, beliefs, strategies, objectives, plans, including product and service developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “intend” or “continue,” the negative of such terms, or other comparable terminology. These statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in these forward-looking statements. The inclusion of such information should not be regarded as a representation by the Company, or any person, that the objectives of the Company will be achieved. Important factors, among others, that may affect actual results or outcomes include: risks associated with the future direction or governance of the Company; our ability to execute on our strategic and business plans; the substantial uncertainties inherent in the acceptance of existing and future products and services; the ability to retain key personnel; potential litigation; general economic and market conditions impacting demand for our services; our inability to enter into one or more future acquisition or strategic transactions; and our ability, or a decision not to pursue strategic options for the esports business. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. The business and operations of AGAE are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this communication. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business and results is described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 27, 2024, as amended, as well as subsequent reports we file with the SEC. Readers are also urged to carefully review and consider the various disclosures we made in such Annual Report on Form 10-K and in subsequent reports with the SEC.
Allied Gaming & Entertainment, Inc. and Subsidiaries Condensed Consolidated Balance Sheets |
||||||||
| March 31, | December 31, | |||||||
2024 |
2023 |
|||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ |
7,300,965 |
|
$ |
16,320,583 |
|
||
| Short-term investments |
|
69,642,386 |
|
|
56,500,000 |
|
||
| Interest receivable |
|
1,319,578 |
|
|
792,223 |
|
||
| Accounts receivable |
|
477,790 |
|
|
529,369 |
|
||
| Loan receivable |
|
1,340,149 |
|
|
- |
|
||
| Deposits, current portion |
|
3,700,000 |
|
|
3,700,000 |
|
||
| Prepaid expenses and other current assets |
|
550,572 |
|
|
498,886 |
|
||
| Total Current Assets |
|
84,331,440 |
|
|
78,341,061 |
|
||
| Restricted cash |
|
5,000,000 |
|
|
5,000,000 |
|
||
| Property and equipment, net |
|
3,608,688 |
|
|
3,834,193 |
|
||
| Digital assets |
|
49,300 |
|
|
49,300 |
|
||
| Intangible assets, net |
|
6,009,070 |
|
|
6,254,731 |
|
||
| Deposits, non-current portion |
|
385,524 |
|
|
392,668 |
|
||
| Operating lease right-of-use asset |
|
5,141,048 |
|
|
5,415,678 |
|
||
| Goodwill |
|
12,490,536 |
|
|
12,729,056 |
|
||
| Total Assets | $ |
117,015,606 |
|
$ |
112,016,687 |
|
||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ |
172,975 |
|
$ |
371,830 |
|
||
| Accrued expenses and other current liabilities |
|
496,992 |
|
|
763,512 |
|
||
| Deferred revenue |
|
105,650 |
|
|
103,748 |
|
||
| Operating lease liability, current portion |
|
1,484,332 |
|
|
1,482,977 |
|
||
| Loans payable |
|
14,856,822 |
|
|
9,230,168 |
|
||
| Total Current Liabilities |
|
17,116,771 |
|
|
11,952,235 |
|
||
| Operating lease liability, non-current portion |
|
5,191,538 |
|
|
5,560,251 |
|
||
| Deferred tax liability |
|
1,075,620 |
|
|
1,096,160 |
|
||
| Total Liabilities |
|
23,383,929 |
|
|
18,608,646 |
|
||
| Commitments and Contingencies | ||||||||
| Stockholders' Equity | ||||||||
| Series A Preferred stock, |
|
- |
|
|
- |
|
||
| Preferred stock, |
|
- |
|
|
- |
|
||
| Common stock, |
|
4,780 |
|
|
3,909 |
|
||
| Additional paid in capital |
|
205,660,677 |
|
|
198,677,132 |
|
||
| Accumulated deficit |
|
(115,370,139 |
) |
|
(113,671,029 |
) |
||
| Accumulated other comprehensive income |
|
299,880 |
|
|
433,565 |
|
||
| Stock subscription receivable |
|
(4,597,000 |
) |
|
- |
|
||
| Treasury stock, at cost, 2,279,784 shares at March 31, 2024 and December 31, 2023 |
|
(2,693,653 |
) |
|
(2,693,653 |
) |
||
| Total Allied Gaming & Entertainment Inc. Stockholders' Equity |
|
83,304,545 |
|
|
82,749,924 |
|
||
| Non-controlling interest |
|
10,327,132 |
|
|
10,658,117 |
|
||
| Total Stockholders' Equity |
|
93,631,677 |
|
|
93,408,041 |
|
||
| Total Liabilities and Stockholders' Equity | $ |
117,015,606 |
|
$ |
112,016,687 |
|
||
| The accompanying notes are an integral part of these consolidated financial statements. | ||||||||
Allied Gaming & Entertainment, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (unaudited) |
|||||||
| For the Three Months Ended | |||||||
| March 31, | |||||||
2024 |
2023 |
||||||
| Revenues: | |||||||
| In-person | $ |
1,255,198 |
|
$ |
1,193,330 |
|
|
| Multiplatform content |
|
59 |
|
|
101 |
|
|
| Casual mobile gaming |
|
1,123,804 |
|
|
- |
|
|
| Total Revenues |
|
2,379,061 |
|
|
1,193,431 |
|
|
| Costs and Expenses: | |||||||
| In-person (exclusive of depreciation and amortization) |
|
635,963 |
|
|
672,222 |
|
|
| Multiplatform content (exclusive of depreciation and amortization) |
|
- |
|
|
395 |
|
|
| Casual mobile games (exclusive of depreciation and amortization) |
|
936,905 |
|
|
- |
|
|
| Research and development expenses |
|
195,211 |
|
|
- |
|
|
| Selling and marketing expenses |
|
53,688 |
|
|
54,598 |
|
|
| General and administrative expenses |
|
2,857,800 |
|
|
2,543,347 |
|
|
| Depreciation and amortization |
|
374,992 |
|
|
578,560 |
|
|
| Total Costs and Expenses |
|
5,054,559 |
|
|
3,849,122 |
|
|
| Loss From Operations |
|
(2,675,498 |
) |
|
(2,655,691 |
) |
|
| Other Income (Expense): | |||||||
| Other (expense) income, net |
|
(13,158 |
) |
|
27,455 |
|
|
| Interest income, net |
|
859,205 |
|
|
734,449 |
|
|
| Net Loss |
|
(1,829,451 |
) |
|
(1,893,787 |
) |
|
| Less: net loss attributable to non-controlling interest |
|
(130,341 |
) |
|
- |
|
|
| Net Loss Attributable to Common Stockholders | $ |
(1,699,110 |
) |
$ |
(1,893,787 |
) |
|
| Net Loss per Common Share | |||||||
| Basic and Diluted | $ |
(0.04 |
) |
$ |
(0.05 |
) |
|
| Weighted Average Number of Common Shares Outstanding: |
|
38,863,783 |
|
|
37,924,754 |
|
|
| The accompanying notes are an integral part of these consolidated financial statements. | |||||||
Allied Gaming & Entertainment, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Loss (unaudited) |
|||||||
| For the Three Months Ended | |||||||
| March 31, | |||||||
2024 |
2023 |
||||||
| Net Loss | $ |
(1,829,451 |
) |
$ |
(1,893,787 |
) |
|
| Other comprehensive income (loss): | |||||||
| Foreign currency translation adjustments |
|
(334,329 |
) |
|
1,880 |
|
|
| Total comprehensive loss |
|
(2,163,780 |
) |
|
(1,891,907 |
) |
|
| Less: Net loss attributable to non-controlling interest |
|
(130,341 |
) |
|
- |
|
|
| Less: Other comprehensive loss attributable to non-controlling interest |
|
(200,644 |
) |
|
- |
|
|
| Comprehensive Loss Attributable to Common Stockholders | $ |
(1,832,795 |
) |
$ |
(1,891,907 |
) |
|
| The accompanying notes are an integral part of these consolidated financial statements. | |||||||
Non-GAAP Financial Measures |
|||||||
EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered as a substitute for net income (loss), operating income (loss) or any other performance measure derived in accordance with |
|||||||
The following table presents a reconciliation of EBITDA and Adjusted EBITDA from net loss, AGAE’s most directly comparable financial measure calculated and presented in accordance with GAAP. |
|||||||
|
Three Months Ended March 31, |
||||||
2024 |
2023 |
||||||
| Net Loss Attributable to Common Stockholders | $ |
(1,699,110 |
) |
$ |
(1,893,787 |
) |
|
| Interest income, net |
|
(859,205 |
) |
|
(734,449 |
) |
|
| Depreciation and amortization |
|
374,992 |
|
|
578,560 |
|
|
| EBITDA |
|
(2,183,323 |
) |
|
(2,049,676 |
) |
|
| Stock compensation |
|
471,600 |
|
|
5,126 |
|
|
| Adjusted EBITDA | $ |
(1,711,723 |
) |
$ |
(2,044,550 |
) |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240520483200/en/
Investor Contact:
Tyler Drew
Addo Investor Relations
agae@addo.com
310-829-5400
Source: Allied Gaming & Entertainment, Inc.
FAQ
What were AGAE's first quarter 2024 revenues?
How much did AGAE's costs and expenses increase in Q1 2024?
What was AGAE's net loss for the first quarter of 2024?
What is AGAE's adjusted EBITDA loss for Q1 2024?
How much cash and short-term investments did AGAE have as of March 31, 2024?
What events did AGAE produce in the first quarter of 2024?
What is the significance of AGAE's partnership with World Poker Tour and Wynn Macau?
