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AG

Allied Gaming & Entertainment Inc. (AGAE)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue rose 99% year over year to $2.38M, driven by casual mobile gaming following the strategic investment in Z-Tech; net loss improved to $1.83M as interest income increased and operating efficiency held .
  • Sequentially, revenue increased from $2.10M in Q4 2023 to $2.38M in Q1 2024; adjusted EBITDA loss improved year over year to $(1.7)M from $(2.0)M .
  • Management highlighted a strong event pipeline (including WPT Macau) and improving mobile gaming momentum into Q2; no formal numerical guidance provided for revenue/EPS/margins .
  • Key catalysts: scaling mobile titles at Z-Tech, monetization at HyperX Arena via sponsorship and event mix, and Asia live entertainment expansion (Skyline JV, WPT Macau with Wynn) .

What Went Well and What Went Wrong

  • What Went Well

    • Casual mobile gaming contributed $1.12M in Q1, a new revenue stream post-Z-Tech, driving 99% YoY growth; CEO: “Z-Tech is trending well…” and pipeline strong .
    • Allied Esports executed 63 events with notable brand partnerships (PlayVS, P&G, Gitlab, Blitz), sustaining arena utilization and sponsorship growth .
    • Interest income of $0.86M supported bottom-line improvement, reflecting treasury management and short-term investments .

  • What Went Wrong

    • Casual mobile gaming revenue was “slightly below expectation” in Q1, implying execution and user acquisition pacing challenges; management expects improvement in Q2 .
    • Total costs/expenses increased 31% YoY to $5.05M, with higher promotion/R&D and stock-based compensation; G&A rose to $2.86M (+$0.31M YoY) .
    • Foreign currency impacts and legal/professional fees (including litigation with Knighted Pastures) present cost/headwind risks and potential management distraction .

Financial Results

  • Revenue and Net Income/Loss vs prior periods
MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD)$1,119,959 $2,100,000 $2,379,061
Net Income (Loss) ($USD)$75,246 $(1,100,000) $(1,829,451)
  • EPS comparison (YoY)
MetricQ1 2023Q1 2024
EPS (Basic & Diluted, $USD)$(0.05) $(0.04)
  • Segment revenue breakdown (YoY)
Segment Revenue ($USD)Q1 2023Q1 2024
In-person$1,193,330 $1,255,198
Multiplatform Content$101 $59
Casual Mobile Gaming$0 $1,123,804
  • KPIs
KPIQ1 2024
Events Produced (Total)63
Proprietary Events33
Third-Party Events30

Notes:

  • Operating loss in Q1 2024 was $(2,675,498) .
  • Interest income in Q1 2024 was $859,205 .
  • Adjusted EBITDA loss improved to $(1.7)M YoY (Q1 2024 vs Q1 2023), per press release .

Guidance Changes

No formal quantitative guidance was issued; management commentary indicated expected improvement in casual mobile gaming in Q2 and strong event pipeline (WPT Macau), but no specific ranges for revenue/EPS/margins were provided.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q2 2024Not provided Not provided Maintained (none)
EPSFY/Q2 2024Not provided Not provided Maintained (none)
MarginsFY/Q2 2024Not provided Not provided Maintained (none)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Mobile Gaming (Z-Tech)Announced acquisition closing; strong in-game ad model; accretive top/bottom line expected Z-Tech integrated; $17M 2023 revenue; positive net income; consolidation benefits $1.12M Q1 revenue; slightly below expectation; improvement anticipated in Q2 with more titles Scaling; near-term execution catch-up; broader title mix
Asia Live EntertainmentMacau diversification opportunity; exploring co-organized partner events Skyline JV formed; April 4 Walk Off The Earth concert; pipeline of events WPT Macau set for June 18–24 with Wynn Macau; annual plans and further partnerships Strengthening partnerships; recurring marquee events
Arena Utilization & Sponsorship79 event days in Q3; new OMEN/HyperX rollouts 64 events in Q4; CES event with OMEN/HyperX; industry panels 63 events in Q1; P&G, PlayVS, Gitlab, Blitz events; continued sponsorship gains Stable utilization; sponsor momentum
Financial Discipline/TreasuryMaterial G&A reductions; ERC benefit Net loss down; improved adjusted EBITDA; strong working capital Interest income $0.86M; net loss improved; liquidity $83.3M cash/ST investments incl. restricted cash Continued treasury yield support
Governance & Strategic Options–Rights plan adopted Feb 9, 2024; anti-takeover protections Board/management updates (May 3); lawsuit defense noted in 10-Q Active governance posture; legal overhang

Management Commentary

  • CEO Yinghua Chen (press release): “After building momentum throughout 2023, we’ve had a strong start to the year… Z-Tech is trending well for the remainder of the year…” .
  • CFO Roy Anderson (call): “Total revenues… $2.4 million, up 99%… $1.1 million from Z-Tech… adjusted EBITDA loss of $1.7 million down from $2.0 million…” .
  • CEO (call): “Allied Experiential… inaugural WPT Wynn Macau Tournament… we look forward to hosting this event on an annual basis…” .

Q&A Highlights

The available transcript excerpts reflect prepared remarks; no formal Q&A transcript content was accessible for review due to data limitations. Management clarified:

  • Casual mobile gaming slightly below expectation in Q1; more titles to be added for Q2 performance improvement .
  • WPT Macau details (dates, buy-ins) and annual intentions, with Wynn and WPT partnership leverage .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q1 2024 EPS/revenue was unavailable at the time of retrieval; therefore, no vs-consensus beat/miss analysis is provided.
  • Implication: Absent published consensus, investors should anchor on reported drivers (Z-Tech mix, sponsorship/event pipeline) and monitor Q2 execution and Asia event cadence .

Key Takeaways for Investors

  • Revenue mix shift is real: casual mobile gaming ($1.12M) emerged as a core growth lever while in-person was resilient; monitor Z-Tech title launches and UA efficiency for Q2/Q3 .
  • The event slate is a differentiator: WPT Macau and Skyline activity expand addressable audiences and sponsorship potential; track recurring annual scheduling and gross margin capture .
  • Liquidity provides cushion: $83.3M cash/ST investments (incl. $5.0M restricted) and working capital of $67.2M enable investment in growth and withstand litigation/governance costs .
  • Cost vigilance needed: G&A step-up from stock comp and legal/professional fees could offset gross additions; watch opex trajectory vs mobile ad yields .
  • No guidance: trade on delivery—near-term stock drivers are Q2 mobile titles ramp, sponsorship renewals, and Asia live event execution (attendance and monetization metrics) .
  • Governance/legal: rights plan and litigation are non-fundamental overhangs; evaluate board stability and resolution timelines .
  • Sequential top-line momentum continued (Q4 → Q1); the sustainability hinges on Z-Tech pipeline and monetization quality rather than volume alone .