East Side Games Group (EAGR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was CAD 20.5 million, flat sequentially, with adjusted EBITDA of CAD 2.5 million, marking the seventh consecutive quarter above this level.

• Year-to-date adjusted EBITDA reached CAD 6.6 million, a 25% increase year-over-year, with a 16% margin.

• Cash on hand at quarter-end was CAD 7.6 million, up 4.8% from Q1 and 171% year-over-year, despite higher user acquisition spend and share buybacks.

• Portfolio approach with 12 active games across two genres drove consistent profitability and resilience to seasonality.

• Continued investment in new game launches and enhancement of existing titles, especially in the match game segment.

Financial highlights

• User acquisition spend increased by CAD 900,000 to CAD 5.7 million in Q2, focused on Match-3 titles.

• Cash flow increased by CAD 350,000 in Q2, ending at CAD 7.6 million.

• Idle games ARPDAU rose from CAD 1.11 to CAD 1.16 (4.5% increase); Match games ARPDAU rose from CAD 0.49 to CAD 0.56 (14% increase) quarter-over-quarter.

• Highest single-day ARPDAU since 2022 achieved for several titles.

• Daily active users in Q2 were 229,000, with ARPDAU of CAD 0.98.

Outlook and guidance

• Targeting CAD 10 million in cash by year-end to support major upcoming launches, especially the RuPaul's Drag Race match-3 game.

• Two new match games in development: one to soft launch by year-end, another in early 2025.

• Anticipates strong Q3 with the global launch of POWER RANGERS: MIGHTY FORCE, which has shown promising early results.

• Announced a second collaboration with World of Wonder for a new RuPaul's Drag Race mobile game.

• Continued focus on sustainable growth, profitability, and reinvestment in user acquisition for high-performing titles.