Enthusiast Gaming Announces $127.6 Million of Pro Forma Revenue in 2020
Enthusiast Gaming announced robust Q4 2020 results with revenue of $42.5 million, a 34% increase from Q3. Direct sales surged 230% to $3.3 million, and revenue per viewer doubled to $0.52. The company reported a net loss of $6.9 million, improving from a loss of $8.0 million in Q3. Key achievements include a 60% rise in paid subscribers and significant partnerships with Samsung and TikTok. The company aims for at least 20% revenue growth in 2021 and is advancing its NASDAQ listing.
- Q4 revenue increased by 34% to $42.5 million compared to Q3.
- Direct sales grew 230% to $3.3 million.
- Paid subscribers rose 60% to 122,000.
- Revenue per viewer increased 100% to $0.52.
- Net and comprehensive loss was $6.9 million.
Q4 revenue of
Q4 direct sales grew
Q4 revenue per viewer grew
TORONTO, March 22, 2021 (GLOBE NEWSWIRE) -- Enthusiast Gaming Holdings Inc. (TSX: EGLX)(OTCQB: ENGMF)(FSE: 2AV), (“Enthusiast Gaming” or the “Company”) the largest gaming media platform in North America, reaching over 300 million monthly video game and esports fans worldwide, today announced financial results for the fourth quarter and year ended December 31, 2020.
“Today we announced record Q4 and 2020 revenue. These robust results show the tremendous progress made in 2020 and provide insight into the overall growth potential of the Company in 2021,” commented Adrian Montgomery, CEO of Enthusiast Gaming. “We exceeded our internal expectations, while delivering on our strategy of increasing direct sales revenue, which grew
Fourth Quarter 2020 Highlights:
- Revenue was
$42.5 million , a34% increase compared to pro forma revenue of$31.7 million in Q3 2020; - Gross profit was
$8.1 million , an increase of52% compared to pro forma gross profit of$5.3 million in Q3 2020; - Net and comprehensive loss was
$6.9 million , resulting in a net and comprehensive loss per share, basic and diluted, of$0.06 , compared to a pro forma net and comprehensive loss of$8.0 million and$0.10 , respectively in Q3 2020; - Direct advertising sales were
$3.3 million , an increase of230% compared to$1.0 million in Q3 2020; - Paid subscribers grew
60% in the past 12 months to end the year at 122,000; - Total views across written and video content were 9.9 billion for Q4; and,
- RPV (revenue per viewer) was
$0.52 , an increase of100% from$0.26 in Q3 2020 driven by the inclusion of Omnia Media results for a full quarter, as well as strong results from Media and Content.
“Looking back at the full year, I am so proud of our team and the considerable achievements we made despite the COVID-19 backdrop that presented a number of financial and operational challenges. We took significant steps forward towards building out our proprietary fan flywheel, by (1) completing and integrating the transformative acquisition of Omnia Media; (2) building out a direct sales team and closing nearly
Significant events subsequent to December 31, 2020:
- The Company joined the ‘Comscore 100’ ranking of Top 100 Internet Properties in the United States - one of only two gaming properties to make the list alongside Amazon’s TWITCH.TV, ranked #1 Gaming Information property for unique visitor traffic from mobile devices;
- Strengthened balance sheet by approximately
$50 million with the combination of a bought deal financing for gross proceeds of$42.5 million and the reduction of the Company’s indebtedness through the conversion of its outstanding debentures of approximately$9 million ; - Announced key partnership deals with Samsung and TikTok;
- Signed exclusive monetization agreements with nine new video game fan communities;
- Announced the launch of Upcomer, a new premium online publication dedicated to the growing needs of today’s esports fan; and
- Entered into a binding term sheet to acquire Vedatis SAS, owners of Icy Veins, the Company’s largest affiliate fan community, for
€7 million in cash and stock, plus an earnout subject to certain milestones being achieved.
The Company completed the acquisition of Omnia Media Inc. (“Omnia”) on August 30, 2020 (see press release dated August 31, 2020). The audited consolidated financial statements of the Company for the years ended December 31, 2020 and 2019, (the “Financial Statements”) include the financial results of Omnia from August 31 through December 31, 2020. References to “pro forma” figures herein will assume the acquisition of Omnia took place on the first day of the respective period. The Company is providing pro forma quarterly information for 2020 as a number of mergers and acquisitions closed in the second half of 2019 reduce the comparability of year-over-year figures. The Financial Statements contain comparative figures for the year ended December 31, 2019. Results are presented in Canadian dollars.
| Select Pro Forma Financial Metrics: Quarterly 2020 | ||||||||||
| Pro Forma for Omnia Acquisition | ||||||||||
| (in $M except for EPS) | Q120 | Q220 | Q320 | Q420 | YE20 | |||||
| Total Revenue | $26.2 | $27.2 | $31.7 | $42.5 | $127.6 | |||||
| Media and Content | $22.5 | $24.4 | $29.0 | $39.6 | $115.5 | |||||
| Subscription | $1.2 | $1.7 | $1.6 | $1.7 | $6.2 | |||||
| Esports and Entertainment | $2.5 | $1.1 | $1.1 | $1.2 | $5.9 | |||||
| Gross Profit | $4.7 | $4.5 | $5.3 | $8.1 | $22.6 | |||||
| Gross Margin % | 18.0 | % | 16.7 | % | 16.8 | % | 19.1 | % | 17.7 | % |
| Operating Income (loss) | ($4.6 | ) | ($4.3 | ) | ($4.0 | ) | ($4.4 | ) | ($17.3 | ) |
| Operating Margin | -17.6 | % | -15.8 | % | -12.6 | % | -10.4 | % | -13.6 | % |
| Net & Comprehensive Income (loss) | ($5.9 | ) | ($6.6 | ) | ($7.9 | ) | ($6.9 | ) | ($27.3 | ) |
| Earnings (loss) Per Share (basic & diluted) | ($0.08 | ) | ($0.09 | ) | ($0.10 | ) | ($0.06 | ) | ($0.33 | ) |
| Select Pro Forma Operating Metrics: Quarterly 2020 | |||||
| Pro Forma for Omnia Acquisition | |||||
| Q120 | Q220 | Q320 | Q420 | YE20 | |
| Total Views (millions) | 9,201 | 12,485 | 10,554 | 9,852 | 42,092 |
| Web pageviews | 2,296 | 3,119 | 2,427 | 2,522 | 10,364 |
| Video views | 6,905 | 9,366 | 8,127 | 7,330 | 31,728 |
| Paid Subscribers (thousands - as at end of period) | |||||
| 92 | 111 | 112 | 122 | 122 | |
Certain information provided in this news release is extracted from Financial Statements and Management’s Discussion & Analysis (“MD&A”) of the Company for the year ended December 31, 2020 and should be read in conjunction with them. It is only in the context of the fulsome information and disclosures contained in the Financial Statements and MD&A that an investor can properly analyze this information. The Financial Statements and MD&A can be found under the Company’s profile on www.sedar.com.
Earnings Announcement and Supplemental Information
Management will host a conference call and webcast on March 22, 2021, at 5 p.m. Eastern Time to review and discuss results for the fourth quarter and year end December 31, 2020.
Please call the following numbers (at least 10 minutes before the scheduled time) to participate:
North America (toll-free): +1 877-407-9039
International: +1 201-689-8470
Conference ID: 13717348
A live webcast can be heard at https://www.enthusiastgaming.com/shareholder-information/.
If you are unable to join live, a replay of the call will be accessible until April 5, 2021, as follows: North America: +1 844-512-2921; International: +1 412-317-6671. The conference ID is 13717348. A recorded version of the webcast will also be available via the Enthusiast Gaming investor relations website.
About Enthusiast Gaming
Enthusiast Gaming is building the world’s largest media platform of communities for gamers and esports fans that reaches over 300 million gaming enthusiasts on a monthly basis. Already the largest gaming platform in North America and the United Kingdom, the Company’s business is comprised of four main pillars: Esports, Content, Talent and Entertainment. Enthusiast Gaming’s esports division, Luminosity Gaming, is a leading global esports franchise that consists of 7 professional esports teams under ownership and management, including the Vancouver Titans Overwatch team and the Seattle Surge Call of Duty team. Enthusiast’s Gaming content division includes 2 of the top 20 gaming media and entertainment video brands with BCC Gaming and Arcade Cloud, reaching more than 50MM unique viewers a month across 9 YouTube pages, 8 Snapchat shows and related Facebook, Instagram and TikTok accounts. Its 100 gaming-related websites including The Sims Resource, Destructoid, and The Escapist collectively generate approximately 1 billion page views monthly. Enthusiast Gaming’s talent division works with nearly 1,000 YouTube creators generating nearly 3 billion views a month working with leading gamer talent such as Pokimane, Flamingo, Anomaly, and The Sidemen. Enthusiast Gaming’s entertainment business includes Canada’s largest gaming expo, EGLX (eglx.com), and the largest mobile gaming event in Europe, Pocket Gamer Connects (pgconnects.com). For more information on the Company visit enthusiastgaming.com. For more information on Luminosity Gaming visit luminosity.gg.
Investor Relations Contact:
Eric Bernofsky, Chief Corporate Officer
416-623-9360
investor@enthusiastgaming.com
Media Relations:
Carmela Antolino, Provident Communications
647-287-2286
carmela@providentcomms.com
Forward Looking Statements
This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Enthusiast anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Enthusiast to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to Enthusiast, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement. Trading in the securities of the Company should be considered highly speculative.
There are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly-titled measures and metrics presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. In particular, “revenue per view” or “RPV” are non-GAAP measures. Enthusiast Gaming includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance and that such measures highlight trends in the Company's financial performance that may not otherwise be apparent when one relies solely on GAAP measures.
The non-GAAP measures presented in the news release are as follows:
i. “Revenue per viewer or (“RPV”)” which is measured as the Company’s content and media revenue plus subscription revenue plus certain categories of esports and entertainment revenue including sponsorship and streaming revenue, the sum of which is then divided by the average monthly viewers over the indicated period. In the case of an interim three-month period, the quotient is multiplied by four to produce an annualized figure.
Non-GAAP measures should not be considered in isolation or as a substitute for revenue, net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies. Further discussion on non-GAAP measures is provided for in the MD&A.
Neither the TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release.
| Enthusiast Gaming Holdings Inc. | |||||||||
| Consolidated Statements of Financial Position | |||||||||
| As at December 31, 2020 and 2019 | |||||||||
| December 31, 2020 | December 31, 2019 | ||||||||
| ASSETS | |||||||||
| Current | |||||||||
| Cash | $ | 4,323,823 | $ | 13,211,722 | |||||
| Investments | 124,998 | 804,865 | |||||||
| Trade and other receivables | 22,424,596 | 6,701,087 | |||||||
| Loans receivable | 194,389 | 205,936 | |||||||
| Income tax receivable | 290,077 | - | |||||||
| Prepaid expenses | 576,802 | 612,386 | |||||||
| Total current assets | 27,934,685 | 21,535,996 | |||||||
| Non-current | |||||||||
| Property and equipment | 354,850 | 298,312 | |||||||
| Right-of-use asset - lease contract | 2,848,400 | 733,413 | |||||||
| Long-term investment | 2,606,100 | 2,480,405 | |||||||
| Investment in associates | 1,026,910 | 914,295 | |||||||
| Long-term portion of prepaid expenses | 263,196 | 104,630 | |||||||
| Intangible assets | 81,106,007 | 60,017,320 | |||||||
| Goodwill | 106,181,086 | 83,259,416 | |||||||
| Total Assets | $ | 222,321,234 | $ | 169,343,787 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current | |||||||||
| Accounts payable and accrued liabilities | $ | 23,602,547 | $ | 7,423,396 | |||||
| Contract liabilities | 1,625,594 | 1,647,594 | |||||||
| Income tax payable | - | 2,415 | |||||||
| Current portion of long-term debt | 1,250,000 | - | |||||||
| Current portion of deferred payment liability | 636,600 | 1,208,413 | |||||||
| Current portion of convertible debentures | 7,546,453 | - | |||||||
| Current portion of lease contract liability | 578,330 | 193,366 | |||||||
| Total current liabilities | 35,239,524 | 10,475,184 | |||||||
| Non-current | |||||||||
| Long-term debt | 21,651,956 | 19,691,220 | |||||||
| Long-term lease contract liability | 2,308,336 | 548,846 | |||||||
| Long-term portion of convertible debentures | - | 7,015,820 | |||||||
| Vendor-take-back loan | 5,559,250 | - | |||||||
| Long-term portion of deferred payment liability | 529,124 | 473,413 | |||||||
| Deferred tax liability | 15,161,987 | 12,482,605 | |||||||
| Total liabilities | $ | 80,450,177 | $ | 50,687,088 | |||||
| Shareholders' Equity | |||||||||
| Share capital | 232,616,997 | 176,511,857 | |||||||
| Shares to be returned to treasury | - | (3,858,756 | ) | ||||||
| Warrants reserve | - | 15,404,728 | |||||||
| Contributed surplus | 7,494,164 | 9,439,324 | |||||||
| Accumulated other comprehensive income | 45,428 | 90,078 | |||||||
| Deficit | (98,285,532 | ) | (78,930,532 | ) | |||||
| Total shareholders' equity | 141,871,057 | 118,656,699 | |||||||
| Total liabilities and shareholders' equity | $ | 222,321,234 | $ | 169,343,787 | |||||
| Enthusiast Gaming Holdings Inc. | |||||||||
| Consolidated Statements of Loss and Comprehensive Loss | |||||||||
| For the years ended December 31, 2020 and 2019 | |||||||||
| December 31, 2020 | December 31, 2019 | ||||||||
| Revenue | |||||||||
| Revenue | $ | 72,758,717 | $ | 11,760,927 | |||||
| Gain on player buyout | 204,764 | 448,399 | |||||||
| Total revenue | 72,963,481 | 12,209,326 | |||||||
| Cost of sales | 54,294,967 | 7,245,000 | |||||||
| Gross margin | 18,668,514 | 4,964,326 | |||||||
| Operating expenses | |||||||||
| Professional fees | 2,273,088 | 1,174,890 | |||||||
| Consulting fees | 5,805,134 | 6,793,925 | |||||||
| Advertising and promotion | 1,409,084 | 2,104,622 | |||||||
| Office and general | 2,878,813 | 1,371,821 | |||||||
| Salaries and wages | 9,131,447 | 1,794,054 | |||||||
| Technology support, web development and content | 4,734,548 | 1,144,534 | |||||||
| Esports player, team and game expenses | 3,446,652 | 1,728,525 | |||||||
| Foreign exchange (gain) loss | (13,832 | ) | 239,828 | ||||||
| Share-based compensation | 818,383 | 6,113,644 | |||||||
| Amortization and depreciation | 5,036,787 | 2,933,874 | |||||||
| Total operating expenses | 35,520,104 | 25,399,717 | |||||||
| Other expenses (income) | |||||||||
| Listing expense | - | 6,829,371 | |||||||
| Transaction cost | 1,882,081 | 3,154,313 | |||||||
| Share of loss from investment in associates | 2,057,135 | 746,424 | |||||||
| Interest and accretion | 5,236,482 | 2,825,793 | |||||||
| Goodwill impairment on acquisition of businesses | - | 46,170,418 | |||||||
| Change in fair value of investment | (183,951 | ) | 57,708 | ||||||
| Loss on modification of long-term debt | 1,140,320 | - | |||||||
| Loss on conversion of convertible debentures | 49,002 | - | |||||||
| Interest income | (102,158 | ) | (677,276 | ) | |||||
| Net loss before income taxes | (26,930,501 | ) | (79,542,142 | ) | |||||
| Income taxes | |||||||||
| Current tax expense | 5,617 | - | |||||||
| Deferred tax (recovery) | (83,786 | ) | (995,715 | ) | |||||
| Net loss for the year | (26,852,332 | ) | (78,546,427 | ) | |||||
| Other comprehensive income | |||||||||
| Items that may be reclassified to profit or loss | |||||||||
| Foreign currency translation adjustment | (44,650 | ) | 90,078 | ||||||
| Net loss and comprehensive loss for the year | $ | (26,896,982 | ) | $ | (78,456,349 | ) | |||
| Net loss and comprehensive loss per share, | |||||||||
| basic and diluted | $ | (0.32 | ) | $ | (2.07 | ) | |||
| Weighted average number of common shares | |||||||||
| outstanding, basic and diluted | 83,401,398 | 37,872,549 | |||||||
| Enthusiast Gaming Holdings Inc. | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| For the years ended December 31, 2020 and 2019 | ||||||||
| December 31, 2020 | December 31, 2019 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss for the year | $ | (26,852,332 | ) | $ | (78,546,427 | ) | ||
| Items not affecting cash: | ||||||||
| Amortization and depreciation | 5,036,787 | 2,933,874 | ||||||
| Share-based compensation | 818,383 | 6,113,644 | ||||||
| Interest and accretion | 1,868,063 | 1,444,017 | ||||||
| Goodwill impairment on acquisition of businesses | - | 46,170,418 | ||||||
| Deferred income tax recovery | (83,786 | ) | (995,715 | ) | ||||
| Gain on player buyout | (204,764 | ) | (448,399 | ) | ||||
| Foreign exchange loss | 16,409 | 100,540 | ||||||
| Listing expense | - | 6,829,371 | ||||||
| Capitalized interest and success fee | 1,494,910 | 1,102,691 | ||||||
| Shares issued for services | 441,613 | 1,770,090 | ||||||
| Loss on modification of long-term debt | 1,140,320 | - | ||||||
| Loss on conversion of convertible debentures | 49,002 | - | ||||||
| Provisions | 47,716 | - | ||||||
| Change in fair value of investment | (183,951 | ) | 57,708 | |||||
| Share of loss from investment in associates | 2,057,135 | 746,424 | ||||||
| Lease payments | (404,958 | ) | (87,159 | ) | ||||
| Changes in working capital | ||||||||
| Changes in trade and other receivables | (7,114,118 | ) | (3,593,513 | ) | ||||
| Changes in prepaid expenses | (1,777 | ) | 75,827 | |||||
| Changes in accounts payable and accrued liabilities | 6,896,882 | (689,483 | ) | |||||
| Changes in contract liabilities | (22,000 | ) | 1,031,352 | |||||
| Changes in income tax receivable | (292,492 | ) | (85,983 | ) | ||||
| Net cash used in operating activities | (15,292,958 | ) | (16,070,723 | ) | ||||
| Cash flows from investing activities | ||||||||
| Cash paid for acquisitions | (10,500,000 | ) | (6,116,972 | ) | ||||
| Business acquisitions, net of cash acquired | 281,125 | (9,051,864 | ) | |||||
| Proceeds from disposal of investment | 680,000 | - | ||||||
| Deferred payment liability | (659,832 | ) | (11,965,500 | ) | ||||
| Proceeds from disposal of intangible assets | 204,764 | 1,113,799 | ||||||
| Investment in associate | (2,169,750 | ) | - | |||||
| Acquisition of property and equipment | (7,259 | ) | (139,294 | ) | ||||
| Acquisition of intangibles | - | (64,940 | ) | |||||
| Net cash used in investing activities | (12,170,952 | ) | (26,224,771 | ) | ||||
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FAQ
What were Enthusiast Gaming's Q4 results for 2020?
Enthusiast Gaming reported Q4 2020 revenue of $42.5 million, a 34% increase from Q3.
How much did direct sales grow in Q4 2020 for ENGMF?
Direct sales increased by 230% to $3.3 million in Q4 2020.
What was the net loss reported by Enthusiast Gaming in Q4 2020?
The net loss reported for Q4 2020 was $6.9 million.
What is the expected revenue growth for Enthusiast Gaming in 2021?
Enthusiast Gaming expects at least 20% revenue growth in 2021.
What significant partnership deals were announced by ENGMF?
Enthusiast Gaming announced key partnerships with Samsung and TikTok.
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