GameSquare (GAME) Q2 2024 earnings summary

Executive summary

• Q2 2024 pro forma revenue reached $28.6 million, up 24% year-over-year and 22% sequentially, driven by FaZe Clan integration, platform enhancements, and programmatic advertising.

• Adjusted EBITDA loss improved to $5.4 million from $10 million year-over-year and $7.9 million sequentially, reflecting cost reductions and operational efficiencies.

• Integration of FaZe Clan and divestiture of non-core assets are central to the 2024 operating plan, with a focus on profitability and balance sheet strength.

• FaZe Media reboot and new creator roster achieved 1.2 billion Q2 views, up 28% in three months, supporting brand value and demand.

Financial highlights

• Q2 2024 pro forma revenue: $28.6 million, up from $23.1 million in Q2 2023.

• Gross margin for Q2 2024 was $4.2 million (14.8% of sales), down from $4.6 million (20.1%) year-over-year due to a less profitable sales mix.

• Adjusted EBITDA loss for Q2 2024: $5.4 million (18.9% of revenue) vs. $10 million (43.5%) in Q2 2023.

• Six months ended June 30, 2024: reported revenue $46.3 million vs. $14.2 million; gross profit $7.6 million vs. $4.1 million; net loss $17.3 million vs. $8.4 million.

• $18 million in annualized cost savings expected from FaZe Clan integration.

Outlook and guidance

• Targeting well over $100 million in annual revenue for 2024, with gross margin expected between 22.5%-27.5%.

• Anticipates accelerated revenue growth and improved profitability in the second half of 2024, with a focus on higher-margin agency and owned IP revenue.

• Confident in achieving profitability and positive adjusted EBITDA by Q4 2024, supported by cost savings and FaZe Clan integration.

• Guidance includes full-year contribution from FaZe Clan and further cost reductions in H2 2024.