OverActive Records Growth in Revenues and Losses for Q2 2023

Credit: OverActive Media

Publicly-traded Canadian esports and gaming company OverActive Media (TSXV: OAM, OTCQB: OAMCF) released its second quarter financial results for the period that ended on June 30. 

During the second quarter, OverActive reported $3.9M CAD ($2.94M USD) in total revenues, a $1.5M CAD ($1.13M USD) or 65% improvement over Q2 2022. The increase in revenues was driven by the company’s team operations business, which grew by $1.6M CAD ($1.18M USD) year-over-year due to timing differences in the recognition of league share revenue in 2023 and higher prize winnings generated from a second place finish in the Call of Duty League (CDL) by the Toronto Ultra. The increase in team operations revenues was slightly offset by a minimal decline in OverActive’s business operations revenues due to lower sponsorships revenues—the impact of which was mostly offset by an increase in revenues from hosting the CDL Major V tournament.

For the second quarter of 2023, OverActive Media recorded operating costs of $6.5M CAD ($4.92M USD), a minimal increase compared to the same period of last year. Factors driving the increase in operating costs were an increase in live event expenses as a result of hosting the CDL Major V tournament and investments into the competitive success of its esports teams. The increase of those expenses were offset by a decrease in corporate payroll expenses and bonuses paid due to a lower headcount.

As a result, OverActive Media incurred an adjusted EBDITA loss of $2.5M CAD ($1.89M USD)—a $1.3M CAD ($981K USD) improvement compared to the same period a year ago—and a net loss of $3.4M CAD ($2.6M USD)—an increase in net loss of $1.1M CAD ($830K USD) as a result of deferred franchise payments in 2022, which did not occur in 2023.. 

Regarding its balance sheet, the company reported cash and cash equivalents of over $9.3M CAD ($7.02M USD) on hand at the end of the quarter, compared to $13.6M CAD ($10.2M) at the end of Q2 2022. In terms of total assets, the company recorded $82.29M CAD ($62.11M USD), compared to $87.64M CAD ($66.15M USD) on Dec. 31, 2022. 

Total current liabilities were listed as $10.83M CAD ($8.17M USD), up from $8.68M CAD ($6.55M USD) recorded on Dec. 31, 2022. The company’s operating costs for the quarter clocked in at $6.52M CAD ($4.92M USD), down slightly from $6.36M CAD ($4.8M USD) from the same period a year ago.

During Q2, the company hit a number of milestones:

• OverActive’s LEC team MAD Lions won the LEC 2023 Spring Championship on April 23, and recorded peak viewership of over 570K, the highest viewership across all teams to date. MAD Lions recorded the highest peak viewership across the LEC and the LCS and placed in the top five matches in terms of viewership at MSI 2023 in London, peaking at over 1M concurrent viewers on May 10, 2023 (viewerships numbers are according to data from EScharts).
• OverActive hosted the Call of Duty League’s Major V at Mattamy Athletic Centre in Toronto on May 25 – 28. Over 9K fans attended and attendance was sold out across both days of the event.
• OverActive’s Toronto Ultra qualified for the Grand Finals of the Call of Duty League Championships (June 15 – 19, in Las Vegas), and finished in second place.
• Year-to-date, OverActive’s professional esports teams have reached more than 42M hours watched across all tournament matches.
• Toronto Ultra signed Call of Duty Champion and All-Star team member Dylan “Envoy” Hannon to its 2024 season roster.
• MAD Lions finished top two in the regular season, qualifying for the LEC 2023 Season Finals.

It should also be noted that on June 5, OverActive announced a deal with Activision Blizzard’s Overwatch League, which included a sponsorship for Toronto Defiant and an elimination of its outstanding entry fees. The agreement included early payment of league revenue share, valued at $10.8M CAD ($8.15M USD). Shortly after the close of Q2, Activision Blizzard announced that it would offer $7.9M CAD ($6M USD) payment to Overwatch League teams that were interested in exiting the league.

“Our leadership role in discussions between leagues and publishers regarding a sustainable esports ecosystem was highlighted when we struck an agreement with the Overwatch League in June valued at $10.8 million, most of which will be recorded in the second half of 2023,” noted Adam Adamou, co-founder and interim CEO of OverActive. “Since then, Activision Blizzard has further disclosed that an additional $7.9 million (US$6 million) may be payable to each team participating in the league, including OverActive. We expect the teams to determine by year-end whether to accept this offer.”

Editor’s note: This article uses the exchange rate of $1 CAD = $0.7548 USD, as recorded on June 30, 2023, by Exchange-Rates.org.