Executive Summary

Record quarterly revenue of $28.6M; reported YoY +151% and sequentially +61% vs Q1 reported; management also cited +24% YoY on a proforma basis and +22% QoQ, reflecting FaZe integration momentum and UEFN demand.
Adjusted EBITDA loss improved to $(5.4)M; margin improved to -18.9% of revenue; sequential improvement of $2.5M supports a path to breakeven by Q4 2024.
Guidance maintained: FY2024 revenue >$100M and gross margin 22.5–27.5% (proforma); management introduced H2 2024 higher-margin revenue of $55–$60M and reiterated the goal of positive adjusted EBITDA by Q4.
Balance sheet actions: raised >$36M non-dilutive capital, added $6.5M via a paid advance, and repaid the remaining $5.7M senior secured convertible note; these steps de-risk near-term liquidity.

What Went Well and What Went Wrong

What Went Well
- “GameSquare delivered strong growth and record quarterly revenue…benefit from accelerating momentum across many areas of our business,” driven by UEFN world-building and FaZe Media’s reboot and new creator roster (1.2B quarterly views, +28% in three months).
- Adjusted EBITDA improved meaningfully YoY and QoQ, with a $2.5M sequential improvement, underpinned by growth initiatives and cost reductions.
- Cost actions advancing integration synergies: approximately $18M of annualized costs removed at FaZe, with further reductions expected in H2.
What Went Wrong
- GAAP net loss widened to $(12.0)M vs $(4.1)M YoY, reflecting higher operating costs and below-target gross profitability in the quarter.
- Reported gross profit was $4.2M on $28.6M revenue, below the full-year gross margin guidance range (22.5–27.5%).
- Adjusted EBITDA remained negative at $(5.4)M, with ongoing transaction/legal and integration-related costs still impacting results.

Reported GAAP results and non-GAAP (Adjusted EBITDA)

Metric	Q2 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$11.362	$17.728	$28.587
Gross Profit ($USD Millions)	$2.788	$3.393	$4.234
GAAP Diluted EPS ($USD)	$(0.34)	$(0.30)	$(0.38)
Total Operating Expenses ($USD Millions)	$8.238	$9.674	$12.522
Net Loss ($USD Millions)	$(4.084)	$(5.261)	$(12.003)
Adjusted EBITDA ($USD Millions)	$(3.303)	$(4.130)	$(5.407)

Consensus vs actual (Wall Street estimates via S&P Global)

Metric	Q2 2024 Actual	Q2 2024 Consensus	Surprise
Revenue ($USD Millions)	$28.587	N/A	N/A
GAAP EPS ($USD)	$(0.38)	N/A	N/A

Note: Wall Street consensus via S&P Global was unavailable at the time of request; values not shown.

Selected operating detail

Metric	Q2 2023	Q1 2024	Q2 2024
Gross Profit ($USD Millions)	$2.788	$3.393	$4.234
FaZe Media quarterly views (Billions)	N/A	N/A	1.2 (+28% over prior three months)

Metric	Period	Previous Guidance	Current Guidance	Change
Annual Revenue	FY 2024	>$100M	>$100M	Maintained
Annual Gross Margin	FY 2024	22.5–27.5%	22.5–27.5%	Maintained
Higher-Margin Revenue	H2 2024	N/A	$55–$60M	Introduced
Adjusted EBITDA	Q4 2024	“Profitability improvements in 2024”	Expects positive adjusted EBITDA by Q4	Clarified ↑
FaZe Cost Reductions	FY 2024	N/A	~$18M annualized removed; more to come	Introduced

Note: A Q2 2024 earnings call transcript was not available in the document set.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2024)	Trend
AI/Tech/UEFN Initiatives	Platform consolidation; Engine tech assets; sales/marketing realignment (Q4’23 commentary)	Expanded UEFN world-building services; stronger creator-led media performance	Improving
Macro Advertising Environment	Q4’23 headwinds: brands cut budgets; pipeline impact	Momentum improved; record revenue; creator network views +28%	Improving
Integration & Cost Synergies	PIPE financing; FaZe merger closed; early restructuring (Q1 2024 10-Q)	~$18M annual costs removed; adj. EBITDA sequential +$2.5M	Improving
Balance Sheet & Liquidity	$10M PIPE (Mar 7, 2024); LOC in place	>$36M non-dilutive capital; $6.5M paid advance; repaid $5.7M note	Strengthening
Legal/Regulatory	Arbitration reserve adjustments in Q1 and Q2	Continued fair value adjustments; immaterial to strategy	Stable

“Second quarter revenue of $28.6 million increased 22% over proforma revenue for the 2024 first quarter…expanding demand for our UEFN world building creative services, and FaZe Media’s reboot and new creator roster, which garnered over 1.2 billion views during the quarter, a 28% increase over the past three months.”
“We believe our recent results reflect a clear path to reach positive adjusted EBITDA by the fourth quarter, supported by additional revenue growth, higher gross margin, and further operating cost reductions in the second half of the year.”
“We have strengthened our balance sheet by raising over $36 million of non-dilutive capital, raised $6.5 million of capital through a paid advance agreement… and repaid the balance of our $5.7 million senior secured convertible note.”
“Management expects over $100 million in annual revenue and annual gross margin to range between 22.5% to 27.5% for 2024…on a proforma basis including full 12 months of FaZe.”

Not available; a Q2 2024 earnings call transcript was not found in the document set. The analysis relies on the 8-K press release and filed financial statements.

Wall Street consensus estimates (Revenue, EPS) via S&P Global were unavailable at the time of request; therefore beats/misses relative to consensus cannot be determined here.
Given management’s H2 guidance ($55–$60M higher-margin revenue) and stated path to positive adjusted EBITDA by Q4, sell-side models are likely to migrate upward on H2 revenue mix and margins, contingent on gross margin execution and cost take-out pacing.

Revenue inflection is tangible: Q2 reported revenue rose to $28.6M; management points to H2 revenue of $55–$60M in higher-margin categories, which, if delivered, should tighten the path to FY guidance.
Margin narrative improving but still below target: full-year gross margin guide (22.5–27.5%) implies significant H2 mix/pricing execution vs Q2’s reported gross profit of $4.2M on $28.6M revenue. Watch H2 campaign quality and production efficiencies.
Cost synergy realization is a central catalyst: ~$18M annualized cost removal with more to come; sequential adjusted EBITDA improvement of $2.5M signals operational leverage forming ahead of Q4 breakeven.
Liquidity de-risked: >$36M non-dilutive capital, $6.5M paid advance, and repayment of the $5.7M note position the company better to execute H2 plans without near-term financing overhang.
Creator-led media momentum: FaZe Media’s 1.2B views (+28% QoQ) and UEFN growth validate audience and monetization drivers for H2; track sponsorship/brand deal velocity and yield.
Near-term trading implications: stock may react to evidence of H2 margin realization (campaign GM, cost actions), concrete wins in UEFN/creator partnerships, and any 8-Ks corroborating pipeline conversion.
Medium-term thesis: if H2 delivers the guided higher-margin revenue and Q4 adjusted EBITDA breakeven, the model transitions to profitable growth with a scaled creator/media platform and proprietary tech leverage.