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HO

Hall of Fame Resort & Entertainment Co (HOFV)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 revenue rose 34% year over year to $4.19M, with loss from operations nearly halved to $(7.09)M and adjusted EBITDA improving to $(2.93)M from $(10.87)M; improvements were driven by event/rental growth and materially lower operating expenses .
  • Management lowered FY2024 revenue guidance to $24–$27M (from $27–$30M in March) and reiterated an adjusted EBITDA loss in the mid-teens millions; attendance guidance of 3.5–3.7M was reiterated .
  • Capital stack/debt: Company extended ~$49M in maturities to March 2025 and is working with local stakeholders to restructure >$20M of short-term debt; notes payable rose slightly to $221.7M; cash and restricted cash declined to $6.88M .
  • Potential stock catalysts: continued execution on expense controls and sponsorship/event momentum (best sponsorship quarter since Q1’21), balanced by softer FY revenue guidance and waterpark/hotel timing risk tied to financing closure .

What Went Well and What Went Wrong

What Went Well

  • Expense discipline: Operating expenses fell sharply YoY (operating expenses $6.15M vs $12.53M; total operating expenses $11.28M vs $17.69M), narrowing losses; management emphasized “accelerated expense management processes” and “narrowing the gap towards profitability” .
  • Diversified growth and seasonality flattening: Event/rental revenue more than doubled YoY (to $2.06M), with management citing successful winter/early-spring programming and tenant additions; “our best Q1 since going public,” and “best quarter in sponsorship since Q1 2021” .
  • Sponsorship and media pipeline: Sponsorship momentum and the largest amount of media content in distribution in company history, supporting cross-vertical synergies (destination, media, gaming) .

What Went Wrong

  • Guidance cut: FY2024 revenue outlook reduced to $24–$27M from $27–$30M given construction timeline and macro credit constraints; adj. EBITDA loss guide maintained .
  • Cash burn and higher interest: Cash and restricted cash fell to $6.88M (from $11.82M at 12/31/23), while net interest expense increased to $6.52M (vs $3.63M) on higher debt and less capitalized interest .
  • Project timing risk: Waterpark/hotel openings remain contingent on a multi-part, simultaneous capital stack close; timelines now framed as first half to mid-2025 for the waterpark and Q3 2025 for the hotel (vs “early 2025” previously) .

Financial Results

Summary vs prior year and prior quarter

Metric ($USD, except per-share)Q1 2023Q4 2023Q1 2024
Revenue ($M)$3.120 $6.100 $4.191
Loss from Operations ($M)$(14.566) $(15.3) $(7.092)
Net Loss ($M)$(19.392) $(20.163) $(14.630)
Net Loss per Share ($)$(3.48) $(3.19) $(2.30)
Adjusted EBITDA ($M)$(10.867) $(1.888) $(2.933)
Interest Expense, net ($M)$3.633 $4.700 $6.522
Cash + Restricted Cash ($M)$14.701 $11.800 $6.884

Margins

MarginQ1 2023Q4 2023Q1 2024
Adjusted EBITDA Margin %(−348.3%) calc. from $(10.867)/$3.120 (−31.0%) calc. from $(1.888)/$6.100 (−70.0%) calc. from $(2.933)/$4.191
Net Loss Margin %(−621.6%) calc. from $(19.392)/$3.120 (−330.5%) calc. from $(20.163)/$6.100 (−349.2%) calc. from $(14.630)/$4.191

Revenue mix (Q1 YoY)

Revenue Component ($M)Q1 2023Q1 2024
Sponsorships (net of activation)$0.673 $0.860
Event, rents, restaurant & other$0.908 $2.055
Hotel revenues$1.539 $1.277
Total revenues$3.120 $4.191

Balance sheet and financing KPIs

KPIQ4 2023Q1 2024
Notes Payable, net ($M)$219.533 $221.654
Cash + Restricted Cash ($M)$11.816 $6.884
Equity Method Investments ($M)— (not presented) $2.476

Notes:

  • Q1 operating expense reductions were broad-based; total operating expenses declined to $11.28M from $17.69M YoY .
  • Q1 adjusted EBITDA improvement primarily reflected lower compensation and third-party services; last year included several non-recurring items .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024$27M–$30M (Mar-2024) $24M–$27M (May-2024) Lowered
Adjusted EBITDAFY 2024Loss in mid-teens ($M) Loss in mid-teens ($M) Maintained
AttendanceFY 20243.5M–3.7M (Q4 call) 3.5M–3.7M reiterated (Q1 call) Maintained
Gameday Bay Waterpark opening2025“Hopeful early 2025” (Q4 call) First half to mid-2025 (capital stack closure dependent) Slipped/clarified
Hilton Tapestry Hotel opening2025“A few months later in ’25” (Q4 call) Q3 2025 if capital stack closes soon Clarified timing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023, Q4 2023)Current Period (Q1 2024)Trend
Revenue diversification & seasonalityRecord Q3 revenue; events, concerts, media launches (Next Man Up, GOAT Code) ; Q4 highlighted diversified revenue and record Q4 revenue .“Best Q1 since going public”; sponsorship best since Q1’21; strong event/rental mix; winter/spring programming .Improving
Expense managementQ4: procurement savings; narrowing loss; operating leverage expected in FY24 .Operating expenses materially down YoY; focus on process management, headcount, and returns on spend .Improving
Capital stack/debt restructuringQ4: extended ~$49M; working to optimize capital structure amid tight credit .Continued work with largest shareholder; targeting >$20M community-linked debt restructuring .In progress
Waterpark/Hotel timelineQ4: waterpark “hopeful early 2025”; hotel a few months later .Waterpark first half to mid-2025; hotel Q3 2025 if capital closes in “next couple of months” .Slight delay/clarity
Sports betting (retail/mobile)Q4: 97% of OH bets mobile; retail economics challenging; still pursuing partner .Retail sportsbook still challenging; working on license extension and creative models; mobile partner progressing .Mixed
Technology/dataQ4: Placer AI for attendance; campus-wide operating system planned .Audit complete; implementing campus-wide OS for packaging/presales and monetization in 2024 .Advancing
Media content pipelineQ4: 5 shows across platforms; pipeline to expand; Fox/NFL Films ties .“Largest amount of content in distribution” to date; new productions filming .Expanding

Management Commentary

  • “Q1 this year, probably our best Q1 since going public… diversification of revenue and… flattening seasonality… best quarter in revenue for sponsorship since Q1 of 2021.” — Michael Crawford, CEO .
  • “First quarter adjusted EBITDA was minus $2.9 million… change was driven by decreased operating expenses… last year included several nonrecurring expense items.” — John Van Buiten, VP & Controller .
  • “We have identified all pieces of the capital stack… already brought in $65 million… hopeful and optimistic that we’ll be closing on both [waterpark and hotel] in the very near term.” — Michael Crawford .
  • “We are revising our revenue expectations to be in the range of $24 million to $27 million, and we are reiterating… adjusted EBITDA loss in the mid-teens millions.” — John Van Buiten .
  • “We will be implementing a new campus-wide operating system to… preselling guest experiences and packaging.” — Michael Crawford .

Q&A Highlights

  • Operating expense reductions: Property operating expenses declined materially YoY; drivers included tighter procurement, compensation and headcount controls, and insurance changes; management cautioned variability as new assets ramp .
  • Waterpark/hotel timing and presales: Waterpark targeted first half to mid-2025 (hotel Q3 2025) contingent on capital stack; management expects presales (season passes, stay-and-play, bundled packages) 3–6 months ahead of opening .
  • Events and sponsorship trajectory: Q1 event mix included faith-based leadership with Tim Tebow and diversified non-sport events; sponsorship strategy focused on long-term partners and category breadth (e.g., Coke) to monetize across verticals .
  • Retail sportsbook outlook: Retail share ~2.5%–3%; operators cautious on fit-out economics; company seeking license extension and potential partner structure; mobile partner continues to contribute .
  • Equity method investment: New $2.48M line reflects 20% retained stake in ForeverLawn Sports Complex after selling 80%; earnings from the venture appear as income from equity method investments .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2024 EPS and revenue was not retrievable at the time of analysis due to access limits; coverage for micro-cap companies can be limited. As a result, we cannot present a reliable “vs. consensus” comparison for Q1 2024 at this time (S&P Global consensus data unavailable).

Key Takeaways for Investors

  • Expense execution is the core positive: sharp YoY OpEx reduction drove meaningful improvement in operating loss and adjusted EBITDA despite lower sequential revenue vs Q4 .
  • Top-line quality improved: mix shifted toward events/rentals and sponsorships; hotel revenue softened YoY but broader campus programming offset seasonality .
  • Guidance reset is prudent under tighter credit: FY revenue lowered to $24–$27M while EBITDA loss guidance held, reflecting expense traction but financing delays for key assets .
  • Financing remains the swing factor: waterpark/hotel timelines hinge on closing a multi-part, simultaneous capital stack; successful close could unlock presales and FY25 synergy ramp .
  • Debt and liquidity require monitoring: notes payable edged up to $221.7M; cash/restricted cash fell to $6.88M; management is working on extensions and community-backed restructurings .
  • Sponsorship/media momentum continue: best sponsorship quarter since Q1’21 and “largest amount of content in distribution” historically support diversified growth narratives .
  • Near-term setup: watch for capital stack closure updates, summer event sell-through (e.g., concerts/festivals), sponsorship wins, and implementation of the campus-wide OS to drive packaging and monetization .

Citations:

  • Q1 2024 8-K/press release, financial statements and non-GAAP reconciliation .
  • PR Newswire Q1 2024 press release .
  • Q1 2024 earnings call transcript -.
  • Q4 2023 8-K/press release and slides .
  • Q4 2023 earnings call transcript -.
  • Q3 2023 8-K/press release -.