Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Allied Gaming & Entertainment Inc (AGAE, Financial) achieved a 93% revenue growth in the third quarter of 2024 compared to the same period in 2023.
- The HyperX Arena hosted 61 event days, including high-profile events such as the HackerOne Live Hacking Event and a Netflix live special event.
- The World Mahjong Tour is expected to accelerate growth, with significant interest anticipated for its inaugural season.
- Allied Experiential Entertainment announced a partnership with the Strawberry Music Festival to cohost the RhythmMax music festival in Macau.
- A substantial investment by Yellow River Global Capital is expected to provide strategic resources and networking opportunities to support AGAE's growth initiatives.
Negative Points
- Total costs and expenses increased to $3.3 million from $1.8 million in the prior year period, impacting profitability.
- The company reported a net loss of $4.0 million for the third quarter of 2024, compared to a net income of $0.1 million in the third quarter of 2023.
- A $3 million loss was incurred due to the settlement of a 2020 escrow agreement with BPR Cumulus LLC.
- There was a $1.2 million net unrealized loss on loans payable and receivable in a foreign currency.
- The working capital surplus decreased to $62.8 million at September 30, 2024, from $66.4 million at December 31, 2023, partly due to the settlement agreement with BPR.
Q & A Highlights
Q: Can you elaborate on the strategic initiatives that contributed to the 93% revenue growth this quarter?
A: Yinghua Chen, CEO: The revenue growth was driven by higher casual mobile gaming revenues, particularly with the integration of Z-Tech, and increased in-person revenues at our HyperX and Oman mobile arenas. Our strategic initiatives, including the launch of the World Mahjong Tour and hosting various high-profile events, have also played a significant role in this growth.
Q: What are the expectations for the World Mahjong Tour, and how does it fit into your overall strategy?
A: Yinghua Chen, CEO: The World Mahjong Tour is expected to accelerate our growth by expanding our target market and audience. The first season will feature satellite events in Los Angeles and Beijing, culminating in a Las Vegas finale with a $100,000 prize pool. This aligns with our strategy to diversify and enhance our entertainment offerings.
Q: Could you provide more details on the financial impact of the settlement with BPR Cumulus LLC?
A: Roy Anderson, CFO: The settlement resulted in a $3 million loss, impacting our net loss for the quarter. However, we received $2 million from the escrowed funds, which partially offset this impact. The settlement also affected our cash and working capital positions.
Q: How is the partnership with Yellow River Global Capital expected to benefit Allied Gaming & Entertainment?
A: Yinghua Chen, CEO: Yellow River's investment and strategic resources will support our growth initiatives. Their expertise in digital technologies and entertainment will provide valuable networking opportunities and industry insights, helping us advance our strategic priorities.
Q: What are the future plans for Allied Mobile Entertainment and its gaming portfolio?
A: Yinghua Chen, CEO: We launched two new casual mobile games this quarter and will focus on refining our existing games, particularly card and margin games, which show strong user retention. Our strategic investment in Z-Tech continues to gain traction, albeit slower than anticipated.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
