GCL Announces First Half Fiscal Year 2025 Unaudited Financial Results

Rhea-AI Summary

GCL Global Holdings (Nasdaq: GCL) reported its financial results for H1 FY2025 ending September 30, 2024. The company saw revenues rise 41% to $50.9 million, primarily driven by console games and game code sales. Despite revenue growth, gross margin decreased to 13.8% from 16.2% year-over-year.

The company narrowed its net loss to $0.8 million from $1.9 million in the prior year period, while Adjusted EBITDA slightly improved to $1.5 million from $1.4 million. Loss per share decreased to $0.02 from $0.06. Cash position strengthened to $10.3 million from $4.3 million as of March 31, 2024.

Notable developments include completing a business combination with RFAC Acquisition Corp. and acquiring a 20% stake in NEKCOM Inc., securing global publishing rights for 'Showa American Story.'

Positive

• Revenue increased 41% YoY to $50.9 million
• Net loss reduced by 58% to $0.8 million from $1.9 million
• Cash position increased to $10.3 million from $4.3 million
• Operating expenses increased only 2.5% despite 41% revenue growth

Negative

• Gross margin declined to 13.8% from 16.2%
• Still operating at a net loss position
• Cost of revenues increased 45.4%, outpacing revenue growth

Insights

Financial Analyst

The financial results reveal a company in transition, with notable strengths and challenges. The 41% revenue growth to $50.9 million demonstrates strong market traction, particularly in console game sales. However, the 2.4% gross margin compression to 13.8% signals increasing cost pressures, likely due to higher unit costs in physical console game distribution.

Operating metrics show encouraging efficiency gains. Despite the revenue surge, selling and marketing expenses decreased slightly to $1.2 million, indicating improved distribution efficiency and potentially better publisher relationships. The modest 2.5% increase in total operating expenses, despite substantial revenue growth, suggests effective cost management and operational leverage.

The reduction in net loss by 57.9% to $0.8 million and the improvement in loss per share from $0.06 to $0.02 indicate progress toward profitability. The $6 million increase in cash position strengthens the balance sheet, providing resources for strategic initiatives like the NEKCOM investment.

The 20% stake in NEKCOM, coupled with publishing rights for "Showa American Story," represents a strategic pivot toward content control and potential recurring revenue streams. This vertical integration could help stabilize margins and reduce dependency on third-party content.

The SPAC merger completion and Nasdaq listing should provide access to capital markets and enhanced visibility, though integration costs may impact near-term profitability. The company's focus on "hit" titles and partnerships with innovative game designers suggests a quality-over-quantity strategy that could support margin recovery if executed effectively.

SINGAPORE, Feb. 14, 2025 (GLOBE NEWSWIRE) -- GCL Global Holdings Ltd. (Nasdaq: GCL) (“GCL” or the “Company”), a leading provider of games and entertainment, today announced its financial results for the six months ended September 30, 2024.

First Six Months of FY2025 Highlights

• Revenues of $50.9 million, up 41% from the prior year period
• Gross Margin of 13.8% compared to 16.2%
• Net loss of $0.8 million, compared to net loss of $1.9 million
• Adjusted EBITDA of $1.5 million, compared to $1.4 million in the first half of FY2024.

“We are pleased with our very robust top-line growth and improved bottom line performance in the first half of fiscal year 2025, highlighting our team’s execution capabilities while closing the business combination with RFAC Acquisition Corp.,” said Sebastian Toke, Group CEO of GCL. “These results reflect the strength of our marketing and distribution and the increasing quality of game developers we are able to partner with. As a public company going into Fiscal 2026, we expect to bring a larger slate of “hit” new titles to gamers across Asia and position GCL as the premier partner for the next generation of innovative game designers.”

Revenues for the first half of fiscal year 2025 were $50.9 million, up 41.0% from $36.1 million in the comparable six months in 2024. The increase was primarily driven by console games and game code sales.

The cost of revenues was $43.9 million for the first six months of FY2025, up 45.4% compared to $30.2 million for the same period of the last year, primarily due to the increase of revenue from console games as more units (both physical versions and console game codes) were sold.

Selling and marketing expenses were $1.2 million for the first six months of FY2025 compared to $1.3 million for the same period of the last year, as the company focused on operation efficiency in distribution.

General and administrative expenses were $6.9 million for the first six months of FY2025, an increase of 4.5% compared to $6.6 million for the same period of the last year.

Total operating expenses increased 2.5% to $8.1 million for the first six months of FY2025, from $7.9 million for the same period of the last year.

Net loss was $0.8 million for the first six months of FY2025, compared to a net loss of $1.9 million for the first six months of FY2024.

Adjusted EBITDA for the first six months of FY2025 was $1.5 million, up from $1.4 million in the comparable prior year period.

Loss per share, basic and diluted, was $0.02 for the first six months of FY2025, compared to a loss per share, basic and diluted of $0.06 for the same period of the last year.

As of September 30, 2024, the Company had $10.3 million in cash and restricted cash in total, compared to $4.3 million as of March 31, 2024.

Recent Developments

• Completed business combination with RFAC Acquisition Corp. on February 13, 2025, and the ordinary shares and warrants of GCL are expected to commence trading on Nasdaq on February 14, 2025.
• GCL acquired 20% of NEKCOM Inc. and obtained global publishing rights for its upcoming game “Showa American Story.”

About GCL Global Holdings

GCL Global Holdings Ltd. unites people through immersive games and entertainment experiences, enabling creators to deliver engaging content and fun gameplay experiences to gaming communities worldwide with a strategic focus on the rapidly expanding Asian gaming market.

Drawing on a deep understanding of gaming trends and market dynamics, GCL Group leverages its diverse portfolio of digital and physical content to bridge cultures and audiences by introducing Asian-developed IP to a global audience across consoles, PCs, and streaming platforms.

Learn more at http://www.gclglobalholdings.com.

Forward-Looking Statements

This press release includes “forward-looking statements” made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995, and may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements may also include, but are not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the estimated implied enterprise value of the Company, GCL’s ability to scale and grow its business, the advantages and expected growth of the Company, and the Company’s ability to source and retain talent. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of GCL’s management and are not predictions of actual performance.

These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by these forward-looking statements. Although GCL believes that it has a reasonable basis for each forward-looking statement contained in this press release, GCL cautions you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. In addition, there are risks and uncertainties described in the proxy statement/prospectus included in the Registration Statement relating to the recent business combination, filed by the Company with the SEC on December 31, 2024 and other documents which will be filed by the Company from time to time with the SEC. These filings may identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. GCL cannot assure you that the forward-looking statements in this press release will prove to be accurate. There may be additional risks that GCL presently knows or that GCL currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. The forward-looking statements in this press release represent the views of GCL as of the date of this press release. Subsequent events and developments may cause those views to change. However, while GCL may update these forward-looking statements in the future, there is no current intention to do so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the views of GCL as of any date subsequent to the date of this press release. Except as may be required by law, GCL does not undertake any duty to update these forward-looking statements.

Non-GAAP Measures

Some of the financial information and data contained in this press release, such as adjusted EBITDA have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). GCL believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to GCL’s financial condition and results of operations. GCL’s management uses these non-GAAP measures for trends analyses and for budgeting and planning purposes. GCL believes that use of these non-GAAP measures provides an additional tool for investors to use in evaluating projected operating results and trends in and in comparing GCL’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors.

Management of GCL does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in GCL’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. You should review GCL’s audited financial statements, which are presented in the recent proxy statement/prospectus filed with the SEC on December 31, 2024, and not rely on any single financial measure to evaluate GCL’s business.

GCL Investor Relations:

Crocker Coulson
crocker.coulson@aummedia.org
(646) 652-7185

Unaudited Condensed Consolidated Balance Sheets
(Stated in U.S dollars, except for the number of shares)

		September 30				March 31
		2024				2024
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	7,727,167			$	2,677,059
Restricted cash			2,577,553				1,656,678
Accounts receivable, net			13,248,026				17,413,086
Amount due from related parties			60,592				21,880
Inventories, net			6,563,779				4,826,217
Other receivable and other current assets, net			1,041,953				460,997
Prepayments, net			9,295,186				5,510,988
Total current assets			40,514,256				32,566,905
NONCURRENT ASSETS
Property and equipment, net			450,916				505,111
Definite-lived intangible assets, net			2,735,858				3,273,226
Indefinite-lived intangible assets			11,904,882				6,858,114
Goodwill			2,990,394				2,990,394
Long-term investment			71,045				71,045
Other receivable, non-current			-				167,000
Operating leases right-of-use assets			906,596				1,128,066
Finance leases right-of-use assets			426,916				470,100
Deferred merger costs			1,836,164				1,065,854
Deferred tax assets, net			588,414				462,429
Total noncurrent assets			21,911,185				16,991,339
TOTAL ASSETS		$	62,425,441			$	49,558,244
LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Loans, current		$	14,270,394			$	8,812,807
Accounts payable			10,117,098				7,016,238
Accounts payable, a related party			6,329,474				6,567,480
Contract liabilities			1,779,725				209,903
Other payables and accrued liabilities			3,953,032				3,101,586
Advance proceeds from converible notes			4,012,500				-
Operating lease liabilities, current			588,180				792,197
Contingent consideration for acquisition, current			3,426,385				2,319,000
Finance leases liabilities, current			80,631				72,868
Amount due to related parties			386,008				486,016
Tax payables			968,254				1,017,143
Total current liabilities			45,911,681				30,395,238
NON-CURRENT LIABILITIES
Operating lease liabilities, non-current			348,283				370,103
Finance leases liabilities, non-current			205,269				234,765
Bank Loans, non-current			67,908				208,010
Deferred tax liabilities			82,075				346,969
Contingent consideration for acquisition, non-current			-				1,378,000
Total non-current liabilities			703,535				2,537,847
TOTAL LIABILITIES			46,615,216				32,933,085
COMMITMENTS AND CONTINGENCIES
MEZZANINE EQUITY
Ordinary shares subject to possible redemption, 53,711 shares as of September 30, 2024 and March 31,2024			700,000				700,000
SHAREHOLDERS' EQUITY
Ordinary share, par value $0.0001; 150,000,000 shares authorized, 25,916,468 shares issued and outstanding as of September 30, 2024 and March 31, 2024, respectively			2,592				2,592
Additional paid-in capital			1,738,012				1,738,012
Retained earnings			11,426,087				11,938,374
Accumulated other comprehensive loss			(131,020	)			(120,551	)
TOTAL GCL Global Limited shareholders' equity			13,035,671				13,558,427
Non-controlling interests			2,074,554				2,366,732
TOTAL SHAREHOLDERS' EQUITY			15,110,225				15,925,159
TOTAL LIABILITIES, MEZZANINE EQUITY  AND SHAREHOLDERS' EQUITY		$	62,425,441			$	49,558,244

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
(Stated in U.S dollars, except for the number of shares)

		For the Six Months Ended September 30,
		2024				2023
REVENUES
Revenues		$	50,905,030			$	36,047,105
Revenues, a related party			675				41,464
TOTAL REVENUES			50,905,705				36,088,569
COST OF REVENUES
Cost of revenues			(36,579,493	)			(25,401,903	)
Cost of revenues, related parties			(7,308,820	)			(4,835,828	)
TOTAL COST OF REVENUES			(43,888,313	)			(30,237,731	)
GROSS PROFIT			7,017,392				5,850,838
OPERATING EXPENSES
Selling and marketing			(1,219,251	)			(1,266,421	)
General and administrative			(6,878,939	)			(6,590,726	)
Total operating expenses			(8,098,190	)			(7,857,147	)
LOSS FROM OPERATIONS			(1,080,798	)			(2,006,309	)
OTHER INCOME (EXPENSE)
Other income, net			356,921				1,095,157
Interest expense, net			(359,624	)			(254,172	)
Change in fair value of contingent consideration for acquisition			270,615				(681,000	)
TOTAL OTHER INCOME, NET			267,912				159,985
LOSS BEFORE INCOME TAXES			(812,886	)			(1,846,324	)
BENEFIT (PROVISION) FOR INCOME TAXES			10,444				(16,168	)
NET LOSS			(802,442	)			(1,862,492	)
Less: net loss attributable to non-controlling interests			(290,155	)			(332,096	)
NET LOSS ATTRIBUTABLE TO GCL GLOBAL LIMITED'S SHAREHOLDERS			(512,287	)			(1,530,396	)
NET LOSS			(802,442	)			(1,862,492	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments			(12,492	)			(58,132	)
COMPREHENSIVE LOSS			(814,934	)			(1,920,624	)
Less: total comprehensive loss attributable to noncontrolling interests			(292,178	)			(329,055	)
Total comprehensive loss attributable to GCL Global Limited's shareholders		$	(522,756	)		$	(1,591,569	)
LOSS PER SHARE - BASIC AND DILUTED, ORDINARY SHARES		$	(0.02	)		$	(0.06	)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING
Basic and diluted			25,916,468				25,896,000

Unaudited Condensed Consolidated Statements of Cash Flows
(Stated in U.S. dollars, except for the number of shares)

		For the Six Months Ended
		September 30
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(802,442	)		$	(1,862,492	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment			165,415				165,878
Amortization of intangible assets			537,367				573,693
Amortization of right of use assets- operating leases			421,485				305,616
Amortization of right of use assets- finance leases			56,246				18,638
(Recovery from) Provision for credit loss and doubtful accounts			(203,270	)			28,306
Loss from disposal of property and equipment			-				56,793
Deferred taxes benefit			(359,472	)			(341,257	)
Change in fair value of contingent consideration for acquisition			(270,615	)			681,000
Change in operating assets and liabilities
Accounts receivables			5,902,561				3,304,346
Accounts receivables, a related party			-				(2,423	)
Inventories			(1,552,924	)			(925,554	)
Indefinite-lived intangible assets			(5,030,276	)			1,710,119
Other receivable and other current assets			(381,235	)			245,078
Prepayments			(3,593,582	)			(750,499	)
Prepayments, a related party			-				(722,881	)
Accounts payable			3,047,728				(473,187	)
Accounts payable, a related party			(311,011	)			2,067,082
Contract liabilities			1,555,495				2,199,886
Other payables and accrued liabilities			(946,978	)			122,688
Other payables and accrued liabilities , a related party			-				(23,916	)
Operating Lease Liabilities			(426,338	)			(306,512	)
Income tax payables			2,666				67,717
Net cash (used in) provided by operating activities			(2,189,180	)			6,138,119
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment			(76,681	)			(64,723	)
Cash received in business combinations, net of cash acquired			-				85,443
Net cash (used in) provided by investing activities			(76,681	)			20,720
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank loans			13,798,964				7,896,390
Repayments to bank loans			(8,485,654	)			(12,982,420	)
Advances proceeds related convertible notes			4,012,500				-
Repayments from related parties			-				3,640,931
Loan to related parties			-				(2,251,258	)
Repayments to related parties			(72,399	)			-
Principal payments of finance lease liabilities			(32,324	)			(12,289	)
Payments of deferred merger costs			(693,070	)			(338,018	)
Net cash provided by (used in) financing activities			8,528,017				(4,046,664	)
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH			(291,173	)			(102,441	)
INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH			5,970,983				2,009,734
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period			4,333,737				3,831,606
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, end of period		$	10,304,720			$	5,841,340
SUPPLEMENTAL CASH FLOWS INFORMATION
Income taxes paid		$	349,028			$	357,425
Interest paid		$	359,624			$	254,172
SUPPLEMENTAL NON-CASH FLOWS INFORMATION
Fair value of share issuance in acquisition of a subsidiary		$	-			$	687,348
Right-of-use assets in exchange for operating lease liabilities		$	177,704			$	-
Recognition of non-controlling interest from acquisition of subsidiaries		$	-			$	182,599

Reconciliation of Non-GAAP to GAAP Measures (unaudited)
(Stated in US dollars)

	Six Months Ended September 30,						For the Years Ended March 31,
	2025			2024			2024			2023		2022
Adjusted EBITDA reconciliation
NET INCOME ATTRIBUTABLE TO GCL GLOBAL LIMITED'S SHAREHOLDERS	(512,287	)		(1,530,396	)		(1,373,504	)		1,986,119		4,562,952
Provision for taxation	(10,444	)		16,168			53,291			620,142		758,136
Net income attributable to non-controlling interests	(290,155	)		(332,096	)		(587,452	)		154,551		23,573
Director fee	446,631			1,107,677			1,329,679			284,984		332,457
Professional fee relating to listing	812,805			525,223			939,683			650,139		394,194
One time marketing support	-			-			300,000			-		-
Depreciation expense	257,178			165,961			320,308			303,378		295,553
Amortisation of customer brand	537,367			554,166			1,229,421			887,523		-
Change in fair value of contingent consideration	(270,615	)		681,000			272,029			932,152		-
Finance cost	359,624			254,173			507,803			299,702		191,163
Stock written off	141,047			629			-			-		-
Adjusted EBITDA	1,471,151			1,442,505			2,991,258			6,118,690		6,558,028

FAQ

What was GCL's revenue growth in the first half of FY2025?

GCL reported revenue growth of 41%, reaching $50.9 million compared to $36.1 million in the same period last year.

How much did GCL's gross margin decline in H1 FY2025?

GCL's gross margin declined from 16.2% to 13.8% in the first half of FY2025.

What strategic acquisitions did GCL make in 2025?

GCL acquired a 20% stake in NEKCOM Inc. and obtained global publishing rights for the game 'Showa American Story.'

How much did GCL reduce its net loss in H1 FY2025?

GCL reduced its net loss from $1.9 million to $0.8 million in H1 FY2025.

What is GCL's current cash position as of September 2024?

GCL reported $10.3 million in cash and restricted cash as of September 30, 2024.