Executive Summary

Q2 2024 revenue was $2.6M, up 11% q/q but down 19% y/y as branded content revenue fell $2.0M y/y, partially offset by $1.7M from casual mobile gaming following the Z‑Tech integration .
Net loss widened to $3.9M due to ~$3.0M in one‑time legal and related costs tied to activist actions; adjusted EBITDA improved q/q to a loss of $1.4M (from $1.7M) as mobile gaming performance strengthened .
Liquidity remains robust: cash and short‑term investments rose to $95.2M (incl. $5.0M restricted), with working capital at $61.8M; management highlighted new catalysts including the launch of the World Mahjong Tour (WMT) and steady demand at HyperX Arena (65 event days in Q2) .
Street consensus (S&P Global) for EPS/revenue was unavailable at time of analysis due to data access limits; result versus estimates cannot be assessed. Attempted retrieval but SPGI daily limit was exceeded.

What Went Well and What Went Wrong

What Went Well

Z‑Tech momentum: Q2 in‑game ad revenue rose 53% q/q; management expects a robust H2 2024 and sustained revenue growth (“Z‑Tech is performing well”) .
HyperX Arena demand: 65 event days in Q2 (40 third‑party), including WPT finals and notable industry events, underscoring venue versatility and utilization .
Strategic expansion: Announced launch of the World Mahjong Tour leveraging WPT model; inaugural season culminating at HyperX Arena in spring 2025. Quote: “We are particularly bullish on… the formation of the World Mahjong Tour… modeled after the highly successful… World Poker Tour” .

What Went Wrong

One‑time legal/activist costs: Approximately $3.0M pre‑tax expense recorded in Q2 related to activist actions, materially impacting net income/EPS and driving the step‑up in G&A .
Revenue mix headwind y/y: Branded content revenue declined by ~$2.0M versus Q2 2023; overall revenue decreased 19% y/y despite mobile gaming offset .
Losses widened: Net loss increased to $3.9M vs. $0.7M in Q2 2023; total costs and expenses surged to $7.9M (from $4.7M y/y), driven largely by litigation and related actions .

Financial Results

Quarterly Trend (oldest → newest)

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$2.1	$2.4	$2.6
Net Loss ($USD Millions)	$1.1	$1.8	$3.9
Adjusted EBITDA ($USD Millions)	$(1.2)	$(1.7)	$(1.4)
Total Costs & Expenses ($USD Millions)	$4.0	$5.1	$7.9
EPS (Basic & Diluted) ($USD)	N/A	N/A	$(0.09)

YoY and Estimate Comparison

Metric	Q2 2023	Q2 2024	YoY Change
Revenue ($USD Millions)	$3.3	$2.6	−19%
Net Loss ($USD Millions)	$0.7	$3.9	N/A
EPS (Basic & Diluted) ($USD)	$(0.02)	$(0.09)	N/A
Adjusted EBITDA ($USD Millions)	$(1.1)	$(1.4)	N/A

Note: Wall Street consensus (S&P Global) estimates for Q2 2024 EPS and revenue were not retrievable due to a temporary SPGI daily limit. Result versus estimates cannot be assessed.

Segment Breakdown (Q2 2023 vs Q2 2024)

Segment Revenue ($USD)	Q2 2023	Q2 2024
In‑person	$1,267,773	$917,362
Multiplatform Content	$2,000,322	$52
Casual Mobile Gaming	$0	$1,722,454
Total	$3,268,095	$2,639,868

KPIs and Balance Sheet Highlights

KPI	Q4 2023	Q1 2024	Q2 2024
HyperX Arena Event Days	64	63	65
Third‑Party Event Days	34	30	40
Z‑Tech In‑Game Ad Rev q/q	N/A	N/A	+53% q/q
Cash & ST Investments ($USD Millions)	$78.6	$83.3	$95.2
Working Capital ($USD Millions)	$66.4	$67.2	$61.8
Shares Outstanding (approx.)	36.8M	45.6M	38.2M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS/Net Income Impact (one‑time legal/activist costs)	Q2 2024	Not previously quantified	Approx. $3.0M pre‑tax expense to be recorded	Raised costs/negative impact
Revenue	FY/Q3	Not provided	Not provided	Maintained (no guidance)
Margins/OpEx/Tax/Segment	FY/Q3	Not provided	Not provided	Maintained (no guidance)
Dividends	FY	Not provided	Not provided	Maintained (no guidance)

Management did not provide quantitative forward guidance ranges; commentary emphasized growth catalysts (WMT, Z‑Tech momentum) and robust liquidity .

Earnings Call Themes & Trends

Topic	Q4 2023 (Previous Mentions)	Q1 2024 (Previous Mentions)	Q2 2024 (Current Period)	Trend
Z‑Tech / Mobile Gaming	Integration complete; positive 2023; expected 2024 benefit	Trending well; adding new titles; $1.1M contribution in Q1	In‑game ad revenue +53% q/q; strong H2 outlook	Improving
HyperX Arena Utilization	64 events; marquee partners/events	63 events; Super Bowl‑adjacent slate	65 event days; 40 third‑party; WPT finals, awards	Stable to improving
Asia Expansion (AEE/Skyline)	JV Skyline formed; pipeline building; Elite Fun strategic investment	Macau WPT Wynn event planned; ongoing Asia events	Negotiations for Macau music festival; WMT finale planned	Building
New IP/Content	Elevated/WANNABE continuity	WANNABE S2 and The Jam series initiatives	Launching World Mahjong Tour; content + membership model	Expanding
Governance/Activism	N/A	N/A	Activist actions causing ~$3.0M one‑time costs; proxy plans	Negative near‑term
Liquidity/Financing	$78.6M cash & ST investments	$83.3M cash & ST investments	$95.2M cash & ST investments; MS Bank Asia loans	Improving

Management Commentary

Strategy and catalysts: “These are exciting times… we are particularly bullish on… the formation of the World Mahjong Tour… bring Mahjong to enthusiasts around the world… opening season, with the champion being crowned at our HyperX Arena in the spring of 2025.” — CEO Yinghua Chen .
Operational momentum: “Z‑Tech’s momentum is evident with Q2 in‑game ad revenue rising 53% over Q1. The business is well positioned for a robust second half of the 2024…” — CEO Yinghua Chen .
Financial framing: “Total revenues… $2.6 million, up 11% q/q but down 19% y/y… approx. $3 million of the increase in expenses was driven by costs related to… litigation… hostile attempt to take over the company…” — CFO Roy Anderson .
Confidence and focus: “Our 3 subsidiaries… all have revenue catalysts in the near future… We’re especially optimistic about… World Mahjong Tour…” — CEO Yinghua Chen .

Q&A Highlights

The transcript provided comprises prepared remarks; a distinct Q&A section was not captured in the available materials. No additional guidance clarifications beyond prepared commentary were disclosed .

Estimates Context

Attempts to retrieve S&P Global consensus for Q2 2024 EPS and revenue were unsuccessful due to a temporary SPGI daily limit; therefore, a beat/miss assessment versus Wall Street consensus is unavailable at this time. This can be refreshed once access is restored.

Key Takeaways for Investors

Mix shift is underway: the mobile gaming segment (Z‑Tech) is becoming the key growth driver, partially offsetting a sharp y/y decline in branded content; watch for H2 traction and monetization scaling .
One‑time legal costs materially pressured Q2 earnings; absent these, underlying adjusted EBITDA improved sequentially, suggesting core operations are stabilizing/improving .
HyperX Arena continues to demonstrate strong utilization and third‑party demand, providing recurring event revenue and strategic visibility with high‑profile partners (e.g., WPT) .
Liquidity remains a differentiator: $95.2M in cash/ST investments and notable working capital surplus provide optionality to fund WMT, Asia expansion, and mobile gaming initiatives (but also attract activist attention) .
The World Mahjong Tour is a new IP catalyst leveraging WPT’s proven model; near‑term investor focus should be on event cadence, sponsorships, media distribution, and membership monetization .
Near‑term trading lens: resolution of activist dynamics and containment of legal costs are likely stock reaction drivers; any update on proxy outcome or cost normalization could be a catalyst .
Medium‑term thesis: execution in Z‑Tech and WMT, plus continued HyperX utilization and Asia events, supports a pivot toward scalable digital and experiential revenue; monitor segment mix, adjusted EBITDA trajectory, and capital deployment discipline .

Citations:

Q2 2024 earnings call transcript and management remarks:
Q2 2024 8‑K press release and financial statements:
Q2 2024 pre‑release update on activist/legal costs:
Q1 2024 earnings materials:
Q4 2023 earnings materials:

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