Playmaker Capital Inc. Reports Record Fourth Quarter and Full-Year 2022 Revenue and Profitability

Rhea-AI Summary

Playmaker Capital Inc. reported strong Q4 2022 financial results, with pro forma revenue reaching US$19.0 million, an organic increase of 102% from Q4 2021. Pro forma Adjusted EBITDA was US$6.8 million, up 96%. For the full year, revenue was US$47.4 million, a 51% growth, and Adjusted EBITDA rose 36% to US$15.3 million. User engagement surged with over 2.6 billion web sessions in 2022, a 45% increase. Playmaker aims for enhanced operational efficiency and continued M&A focus in 2023, leveraging growing demand from advertisers and sports betting operators.

Positive

• Pro forma revenue increased by 102% in Q4 2022 compared to Q4 2021.
• Pro forma Adjusted EBITDA rose 96% in Q4 2022.
• Full year 2022 revenue grew by 51% to $47.4 million.
• User sessions reached over 2.6 billion in 2022, a 45% growth.
• Direct sales from corporate advertisers and sports betting operators grew by over 100% in Q4 2022.

Negative

• Operating income decreased by 23% for the full year 2022.
• Cash and cash equivalents dropped from $14.0 million at Q3 2022 to $8.9 million at year-end.

• Q4 2022 pro forma revenue of US$19.0 million, an organic increase of 102% over Q4 2021
• Q4 2022 pro forma Adjusted EBITDA of US$6.8 million, an organic increase of 96% over Q4 2021
• User Sessions on Playmaker’s web properties exceeded 2.6 billion in 2022, an increase of 45% over 2021
• 2023 will be a period of focused integration and enhanced operational efficiency across Playmaker’s core media and affiliate business segments; continued discipline toward accretive M&A opportunities

TORONTO--(BUSINESS WIRE)-- Playmaker Capital Inc. (TSX-V: PMKR) (“the Company” or “Playmaker”), the digital sports media company that delivers authentic content experiences through its portfolio of sports media brands, is pleased to report its financial results for the fourth quarter ended December 31, 2022 (“Q4 2022”) and for the full year 2022.

FINANCIAL HIGHLIGHTS (Figures in USD)

USD Millions	For the three months ended				For the year ended
	Dec. 31 2022		Dec. 31 2021	Growth	Dec. 31 2022	Dec. 31 2021	Growth
Pro Forma Revenue1	$19.0		$9.4	102%	$47.4	$31.4	51%
Pro Forma Adjusted EBITDA1	$6.8		$3.5	96%	$15.3	$11.3	36%
Revenue	$18.7		$7.0	168%	$40.3	$14.8	172%
Operating Income	$3.1		$0.5	577%	$1.4	$1.8	(23%)

• Cash and Cash Equivalents – Cash and cash equivalents were $8.9 million at December 31, 2022 compared to $14.0 million at September 30, 2022.

MANAGEMENT COMMENTARY

Jordan Gnat, CEO of Playmaker commented, “During 2022, our team continued to expand Playmaker’s sports-centric audience by increasing the Company’s digital content distribution channels with additional audio, video and social offerings. 2022 was about integrating our operations and levelling up our team and infrastructure to deliver for our clients and to create deeper connections to our fans. The FIFA World Cup 2022 accelerated engagement across Playmaker’s platforms and geographies, generating above-trend financial results during the fourth quarter. Beyond the transitory quarterly impact of an event like the World Cup, the key to sustainable success and future organic growth is our team’s ability to harness these events to demonstrate our value to commercial partners and also attract net-new users to our properties. We are already seeing the benefits of that in early 2023.”

Mr. Gnat continued, “When we started Playmaker in January 2021, we saw an opportunity to build a highly integrated digital media business focused squarely on the most enduringly loyal, transactional audience available today – the sports fan. This focus has enabled us to generate record growth and profitability even against a challenging backdrop for the broader advertising industry. This audience is stronger than ever and more valuable than ever as evidenced by surging sports media rights fees and increased audience engagement around live sports. We are the #7 ranked digital sports media company in the Americas by web visits, and the #1 in Latin America, and we still see plenty of runway for both organic and acquisitive growth over the next several years as we maintain our focus on building value for shareholders. In 2023, we will deepen our integration efforts and advance operational efficiencies across the premier media and affiliate brands within the Playmaker ecosystem to maximize opportunities across the platform.”

Mike Cooke, CFO of Playmaker added, “While our team continues to see significant and achievable growth opportunities over the next few years, we are committed to generating profitability in lockstep. This dual focus translated into record financial results during 2022, with pro forma revenue of $47.4 million growing 51% from 2021, and pro forma adjusted EBITDA of $15.3 million growing 36% from 2021. With $8.9 million in cash and $10.0 million of available debt as of December 31, 2022, Playmaker is on solid financial footing entering 2023 and is positioned to continue generating profitable growth."

OPERATIONAL HIGHLIGHTS

Media Businesses Continue to Scale & Increase Engagement

• In Q4 2022, Playmaker generated 624 million user sessions across its owned and operated web properties, representing a 27% increase over Q4 2021. For the full year 2022, Playmaker generated more than 2.6 billion web sessions, representing a 45% increase over 2021.
• In Q4 2022, Playmaker’s web properties attracted a monthly high of approximately 100 million users, representing an increase of 18% over Q4 2021; its social media assets had a total of 175 million followers across TikTok, Instagram, Facebook, Twitter and other social platforms.
• Futbol Sites, Playmaker’s Latin American and US Hispanic media business, generated 196 million video views and 525 million social media interactions over the course of the FIFA World Cup 2022 tournament.
• Playmaker expanded its video production expertise in 2022. Canada-based media business, The Nation Network, launched an audio-video podcast portfolio of more than 25 shows that now contribute more than 820,000 monthly streams. Mexico-based property, Cracks, generated more than 600 million YouTube views from its daily video content in 2022 across Cracks Global and several regional Cracks YouTube channels.
• World Soccer Talk, one of Playmaker’s US-based soccer media properties, increased web sessions and users 310% and 290%, respectively, during World Cup 2022 over World Cup 2018.
• For the month of December 2022, Playmaker maintained its position as a leading digital sports media company ranked by Comscore. Playmaker ranks #7 across the Americas by web visits, including #1 in Latin America. Playmaker currently ranks #18 in the US and #12 in Canada, up from #23 and #15, respectively, for the same period 2021.

Acquisition & Integration Efforts Diversify Revenue Sources; Enhance Monetization

• Playmaker now has active affiliate relationships with more than 20 sports betting and streaming partners in 17 U.S. States and in the Province of Ontario. Playmaker acquired leading iGaming affiliate operator, Wedge Traffic (“Wedge”), further diversifying Playmaker’s revenue-generating capabilities and adding to its existing affiliate business with streaming partners as well as the ongoing partnership with Oddschecker.
• Playmaker migrated The Nation Network’s portfolio of team sites as well as DailyFaceoff.com onto its Playmaker-designed and managed front ends in Q4 2022.

Strong Direct Campaign Demand from Corporate Advertisers & Sports Betting Operators

• Playmaker continued to attract growing demand for direct sales from corporate advertisers and sports betting operators in Q4 2022. Against the backdrop of an eventful sports calendar, direct sales on Playmaker’s owned and operated media properties increased by more than 100% in Q4 2022 over the same period 2021, with direct sales accounting for more than 60% of core media advertising sales.

• Playmaker’s fastest-growing customer segment for direct sales is iGaming and sports betting. Direct sales from this segment grew by more than 200% in Q4 2022 compared to the same period 2021, representing approximately 45% of direct sales in the quarter.
• FIFA World Cup 2022 provided significant commercial engagement for Playmaker’s web properties. During the World Cup, Playmaker activated more than 300 direct campaigns with key partners in Canada, the US, and across Latin America with brands such as Visa, adidas, CIBC, Verizon, Betfair, Uber, Cool Bet, McDonald’s, and Scotiabank.

CONFERENCE CALL

The Company will host a management conference call to discuss its Q4 and full-year 2022 financial results on March 21, 2023, at 10:00 a.m. (Eastern Time). Hosting the call will be Jordan Gnat, Chief Executive Officer; Jake Cassaday, Chief Operating Officer; and Mike Cooke, Chief Financial Officer.

To participate in the conference call, please dial-in using one of the following numbers approximately five minutes prior to commencement and ask to join the Playmaker call:

Dial-In Number (Toll Free): 1-844-707-6933

Dial-In Number (International): 1-412-317-5796

A replay of the Conference Call will be made available at playmaker.fans/investors.

To sign up for Playmaker Investor Alerts, visit: PMKR Investor Alerts.

TSX VENTURE EXCHANGE DISCLAIMER

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

NON-IFRS MEASURES

Some of the information presented in this press release includes non-IFRS financial measures, including, “EBITDA”, “Adjusted EBITDA”, “working capital”, and metrics that are presented on a pro forma basis. These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.

“EBITDA” is earnings before interest, taxes, depreciation and amortization.

“Adjusted EBITDA” is earnings of the Company’s operating subsidiaries before interest, taxes, depreciation and amortization, excluding the impact of head office costs, goodwill impairment expenses and any one-time costs.

“Working capital” is the Company’s current assets minus its current liabilities.

“Pro forma” is an adjustment to incorporate the results of any acquisitions made through the date of this press release, assuming each acquisition occurred on the first day of the period being presented.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Playmaker’s current expectations regarding future events. The words “will”, “expects”, “anticipates”, “believes”, “plans”, “intends” and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Playmaker’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: changes in general economic, business and political conditions. Playmaker undertakes no obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

ABOUT PLAYMAKER CAPITAL INC.

Playmaker Capital Inc. (TSX-V: PMKR; OTC: PMKRF) is a digital sports media company that acquires and integrates premier fan-centric media brands, curated to deliver highly engaged audiences of sports fans to tier one advertisers, online sports betting operators, and sports federations and leagues. Leveraging its in-house technology stack, Bench, and with a 360-degree view of sports fans, Playmaker delivers authentic digital content experiences for sports fans and best-in-class results for its partners across the Americas.

Playmaker reports in U.S. dollars, except where noted otherwise, and in accordance with International Financial Reporting Standards (“IFRS”).

For more information, visit: http://www.playmaker.fans or contact Playmaker Chief Executive Officer Jordan Gnat via email jgnat@playmaker.fans | T: (416) 815-4993

To sign up for Playmaker’s Investor Alerts, visit: playmaker.fans/investors.

Playmaker Capital Inc.
Consolidated Statements of Financial Position
(Stated in U.S. dollars)
				December		December
				31, 2022		31, 2021
Assets
Current
	Cash and cash equivalents		$	8,875,692	$	7,111,728
	Accounts receivable			12,755,151		4,406,719
	Income taxes receivable			241,540		45,711
	Inventory			11,859		18,770
	Prepaid and other current assets			1,565,724		377,061
Total current assets				23,449,966		11,959,989
	Property and equipment			939,996		778,381
	Intangible assets			58,538,596		45,808,097
	Goodwill			46,098,848		28,393,097
	Deferred tax asset			1,734,875		868,116
	Other long-term assets			33,418		20,720
Total assets			$	130,795,699	$	87,828,400
Liabilities
Current
	Accounts payable		$	3,433,147	$	567,572
	Income taxes payable			725,925		81,264
	Deferred revenue			440,302		188,993
	Accrued expenses and other current liabilities			4,281,061		2,623,321
	Current portion of lease liability			157,150		88,951
	Current portion of long-term debt			416,667		14,365
	Current deferred consideration			2,000,000		2,345,759
	Consideration payable			11,804,338		10,475,031
Total current liabilities				23,258,590		16,385,256
	Long-term debt			9,583,333		46,708
	Long-term lease liability			425,181		415,057
	Deferred tax liability			7,297,935		4,237,822
	Deferred consideration			2,438,000		1,848,388
	Contingent consideration			17,957,182		8,837,406
	Convertible debenture			15,425,130		-
Total liabilities				76,385,351		31,770,637
Shareholders' Equity
	Share capital			65,816,073		60,494,370
	Contributed surplus			2,057,531		606,863
	Warrant Reserve			-		303,278
	Accumulated other comprehensive income (loss)			(1,735,978)		(1,368,266)
	Retained earnings (deficit)			(11,727,278)		(3,978,482)
Total shareholders’ equity				54,410,348		56,057,763
Total liabilities and shareholders’ equity			$	130,795,699	$	87,828,400

Playmaker Capital Inc.
Consolidated Statements of Net Loss and Comprehensive Loss
For the years ended December 31, 2022 and 2021
(Stated in U.S. dollars, except share information)
				2022		2021
Revenue			$	40,348,138	$	14,820,154
Cost of Sales				5,287,978		1,189,901
Gross Profit				35,060,160		13,630,253
Operating expenses
	Salary and wages			14,614,706		5,797,734
	Advertising, commissions and fees			7,746,625		2,666,087
	Web services and publishing			1,331,086		613,851
	General and administration			1,911,121		733,966
	Professional fees			1,397,616		828,410
	Bad debt expense			250,828		-
	Stock-based compensation			1,227,061		576,778
	Depreciation and amortization			5,224,756		648,441
Total operating expenses				33,703,799		11,865,267
Operating income/(loss)				1,356,361		1,764,986
	Transaction costs			(2,844,894)		(842,729)
	Interest expense			(1,151,417)		(130,144)
	Listing and filing fees			(9,753)		(1,826,331)
	Other income			106,706		21,761
	Other expenses			(181,807)		(19,819)
	Loss on impairment			(2,133,339)		-
	Change in fair value of consideration			(1,274,771)		(2,901,005)
	Change in fair value of convertible debenture			(424,496)		(678,429)
	Foreign exchange gain (loss)			(854,468)		849,908
Loss before taxes				(7,411,878)		(3,761,802)
	Deferred tax			945,315		324,824
	Current tax			(1,282,233)		(105,278)
Net loss			$	(7,748,796)	$	(3,542,256)
Other comprehensive loss
	Gain (loss) on translation			(367,712)		(1,459,062)
Comprehensive loss			$	(8,116,508)	$	(5,001,318)
Basic and diluted net and comprehensive income (loss) per share			$	(0.04)	$	(0.03)
Basic and diluted weighted average number of shares				218,744,212		128,850,587

Playmaker Capital Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2022 and 2021
(Stated in U.S. dollars)
Operating activities			2022		2021
Net loss		$	(7,748,796)	$	(3,542,256)
Depreciation and amortization			5,224,756		648,441
Bad debt expense			250,828		-
Share-based compensation			1,227,061		576,778
Listing fees, RTO costs			-		618,184
Non-cash interest expense			34,241		107,434
Loss on impairment			2,133,339		-
Change in fair value of contingent consideration			1,274,771		2,901,005
Change in fair value of convertible debenture			424,496		678,429
Unrealized foreign exchange (gain) loss			711,729		(864,176)
Deferred income tax recovery			(945,315)		(324,824)
Change in non-cash working capital			(5,104,246)		(284,060)
Net cash flows provided by (used in) operating activities			(2,517,136)		514,955
Investing activities
Acquisition of Futbol Sites, net of cash acquired			-		(6,228,466)
Cash acquired through RTO			-		162,375
Acquisition of Fanaticos			-		(204,290)
Acquisition of Yardbarker, net of cash acquired			-		(9,331,068)
Acquisition of SoccerMemes			-		(100,000)
Acquisition of Two-Up, net of cash acquired and debt assumed			-		(676,764)
Acquisition of Varsky			-		(175,804)
Acquisition of TNN, net of cash acquired			-		(4,163,915)
Acquisition of SuperPoker			-		(1,727,806)
Acquisition of Cracks			-		(478,141)
Acquisition of Futmarketing			(875,000)		-
Acquisition of SportsDrop			(1,200,000)		-
Acquisition of World Soccer Talk			(350,000)		-
Acquisition of JuanFutbol			(400,000)		-
Acquisition of Pasion Aguila			(125,000)		-
Acquisition of PlanetaBocaJuniors			(50,000)		-
Acquisition of Wedge Traffic, net of cash acquired			(7,719,108)		-
Settlement of deferred and contingent consideration			(9,628,900)		(500,000)
Purchase of property and equipment			(209,273)		(246,415)
Purchase of intangibles			(119,258)		(55,590)
Net cash flows used in investing activities			(20,676,539)		(23,725,884)
Financing activities
Issuance of preferred shares			-		5,505,000
Issuance of common shares			-		19,881,600
Issuance costs on preferred and common shares			-		(1,236,391)
Options exercised			-		36,704
Warrants exercised			162,174		18,066
Long-term debt drawn			11,333,336		-
Long-term debt repayments			(1,333,336)		(139,587)
Convertible debenture			15,000,000		-
Lease liability principal payments			(195,690)		(28,410)
Net cash flows provided by financing activities			24,966,484		24,036,982
Increase in cash and cash equivalents			1,772,809		826,053
Foreign exchange impact			(8,845)		(345,683)
Cash and cash equivalents, beginning of year			7,111,728		6,631,358
Cash and cash equivalents, end of year		$	8,875,692	$	7,111,728

¹ Includes impact of all acquisitions made to date

View source version on businesswire.com: https://www.businesswire.com/news/home/20230320005651/en/

MEDIA & INVESTOR RELATIONS CONTACTS

Jonathan Ross – E: jon.ross@loderockadvisors.com | T: (416) 283-0178

Elias Blahacek – E: elias@playmaker.fans | T: (416) 254-4345

Source: Playmaker Capital Inc.

FAQ

What were Playmaker Capital's Q4 2022 financial highlights?

Playmaker Capital reported Q4 2022 pro forma revenue of $19.0 million, an increase of 102% year-over-year, and pro forma Adjusted EBITDA of $6.8 million, up 96%.

How did Playmaker Capital perform in 2022 compared to 2021?

In 2022, Playmaker Capital's revenue was $47.4 million, a 51% increase from 2021, and pro forma Adjusted EBITDA was $15.3 million, growing 36%.

What was the user engagement for Playmaker Capital in 2022?

Playmaker Capital achieved over 2.6 billion user sessions in 2022, representing a 45% increase compared to 2021.

What are Playmaker Capital's plans for 2023?

In 2023, Playmaker intends to focus on operational efficiency and integration while exploring accretive M&A opportunities.

How much cash did Playmaker Capital have at the end of 2022?

As of December 31, 2022, Playmaker Capital had cash and cash equivalents totaling $8.9 million.