GameSquare Reports 2023 Financial Results

This week publicly traded esports and gaming company GameSquare Holdings (NASDAQ:GAME) released financial results for 2023. While revenue for 2023 increased 85% year-over-year to $52M USD, the company also recorded a larger net loss and increased total operating expenses compared to 2022. 

By the Numbers:

• Revenue: $52M, compared to $28.1M in 2022.
• Gross Profit: $13.4M, compared to $9.7M in 2022.
• Cash on Hand: $2.9M, compared to $977K at the end of 2022.
• Total Assets Value: $64.7M, compared to $20.2M in 2022.
• Total Operating Expenses: $44.1M, compared to $27.9M in 2022.
• Net Loss: $31.3M, compared to $18.1M in 2022.
• Adjusted EBITDA Loss: $15.0M, compared to $13.2M (the company noted that the adjusted EBITDA loss was 28.8% of revenue, compared to 47.2% of revenue in 2022).

During 2023, GameSquare completed its acquisition of Engine Gaming (April 2023) and integrated its operations into the overall business over the remainder of the year. The company also divested some “non-core radio business assets” for a total consideration of $3.4M in December. 

GameSquare CEO Justin Kenna noted in a release that brands “reigned in their budgets during the fourth quarter, which caused two brand partners to pull their campaigns – each were expected to contribute high-margin, multi-million-dollar revenue in the fourth quarter.” He also noted that a restructure of its sales and marketing organization had an impact on the company’s pipeline, and “further reduced revenue opportunities.” 

2024 Guidance:

Looking ahead to 2024, the company said that it expects over $100M in annual revenue and gross margin to be in the range of 22.5% to 27.5% for 2024. On the impact of its acquisition of FaZe Clan and its divestment of Complexity Gaming, Kenna offered the following guidance:

“While we expect the 2024 first quarter will be affected by the asset sale [Complexity], costs associated with the FaZe acquisition, and the realignment of our sales and marketing infrastructure, we believe 2024 will be a good year of growth and enhanced profitability. We are focused on quickly executing against an exciting growth strategy, expanding the FaZe Brand, and eliminating costs to create lasting value for our shareholders. We believe our shareholders will see the power of our recent acquisitions and new operating model throughout 2024 and I am excited by the direction we are headed.”  

GameSquare is a gaming and esports company that owns a number of properties including esports organization FaZe Clan (which it acquired in March), game content development company Moonlight Studios, digital media company GCN, gaming and lifestyle marketing agency Cut+Sew (Zoned), UK-based esports talent agency Code Red Esports Ltd., live streaming analytics company Stream Hatchet, social influencer marketing platform Sideqik, creative production studio Fourth Frame Studios, merchandising company Mission Supply, and programmatic advertising and media distribution company Frankly Media.

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