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Prairie Operating Co. (PROP)·Q3 2015 Earnings Summary

Executive Summary

  • Record quarterly revenue of $7.30M (+6% YoY) with convention revenue at $6.81M (93% of total); net income of $0.73M, $0.01 EPS, reflecting cost containment and efficiency gains .
  • Quarter-over-quarter revenue declined to $7.30M from $7.58M on lower average revenue per convention ($0.97M vs. $1.24M in Q2), despite seven events including Chicago, San Jose, and Pittsburgh .
  • Strategic shift: reduced ownership position in CONtv and restructured agreements—retaining a non-dilutable 10% interest; capped CONtv cash obligations at $25K/month (max $300K) and ceasing obligations to provide new original content .
  • Near-term catalyst narrative centers on record revenue, improved gross margin ($2.88M vs. $2.38M YoY), ComicConBox subscriber growth, and the 2016 Wizard World Gaming tour launch, offset by lower average revenue per convention and higher OpEx YoY .

What Went Well and What Went Wrong

What Went Well

  • “Q3 was highlighted by record quarterly revenue and strong average-revenue-per-convention,” with seven events managed efficiently and expenses “at lower levels than at previous events” .
  • Gross margin expanded to $2.88M (+~$0.49M YoY) driven by cost containment in new markets and operational efficiencies .
  • Launch of Wizard World Gaming for 2016 to unlock sponsorships and revenue sources; continued ComicConBox subscriber and revenue growth .

What Went Wrong

  • Average revenue per convention fell to $0.97M from $1.24M in Q2 and $1.70M in Q3 2014, reflecting event mix and new-market maturation .
  • Total operating expenses rose to $1.98M from $1.70M YoY due to staffing and larger conventions .
  • Other expenses increased to $148,893, driven by the company’s investment in CONtv .

Financial Results

MetricQ3 2014Q2 2015Q3 2015
Total Revenue ($USD Millions)$6.86 $7.58 $7.30
Convention Revenue ($USD Millions)——$6.81
Convention Revenue (% of Total)——93%
Gross Margin ($USD Millions)$2.38 —$2.88
Total Operating Expenses ($USD Millions)$1.70 —$1.98
Other Expenses ($USD)——$148,893
Net Income ($USD Millions)$0.54 —$0.73
EPS ($USD)$0.01 —$0.01
Cash ($USD Millions, period-end)——$4.28

Segment Revenue Composition (Q3 2015):

SegmentQ3 2015
Convention Revenue ($USD Millions)$6.81
Convention Revenue (% of Total)93%

Key KPIs:

KPIQ3 2014Q2 2015Q3 2015
Average Revenue per Convention ($USD Millions)$1.70 $1.24 $0.97
Number of Events (count)4 —7

Context from prior periods:

  • Q1 2015: Convention revenue $6.10M (+$0.93M YoY); net loss $(0.98)M; loss per share $(0.02); seven events; increased OpEx with more shows; launched CONtv and ComicConBox .
  • YE 2014: Convention revenue $23.06M (+106% YoY); net income $0.996M; average revenue per event $1.36M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial GuidanceQ3 2015N/ANone providedMaintained “no formal guidance”
CONtv On-Going Costs12 months from 7/1/2015N/A$25,000/month; aggregate cap $300,000Lowered cash obligation, capped exposure
CONtv Ownership InterestOngoingN/ANon-dilutable 10% membership interestRestructured ownership
Content Obligations to CONtvEffective 7/1/2015Provide new contentNo longer obligated to provide any new original contentCeased obligations

Earnings Call Themes & Trends

Note: No Q3 2015 earnings call transcript available in the corpus.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2015)Trend
CONtv JVQ1: Official launch of CONtv digital service (3/3/2015) . Q2: Not available in corpus.Reduced ownership to focus on core; retain 10% interest; limit cash outlay; cease new content obligations .Shift toward core conventions, de-risk JV cash commitments
ComicConBoxQ1: Launch; sold out first edition in week one .Continued subscriber base growth and revenues .Positive momentum
Event ExpansionQ1: 27 events planned; China expansion (May 30–June 1) .Seven events in Q3; continued operational efficiency .Scale with efficiency focus
Gaming Initiative—Announced 2016 Wizard World Gaming tour starting Atlanta (Jan 22–24) .New vertical for sponsorship and revenue
Cost DisciplineQ1: Higher OpEx from more shows .Cost containment drove gross margin expansion .Improving efficiency

Management Commentary

  • “Q3 was highlighted by record quarterly revenue and strong average-revenue-per-convention… we successfully managed seven events… with expenses at lower levels than at previous events” — John Macaluso, CEO .
  • “We are excited for our newest initiative, Wizard World Gaming, which we believe will open up new sponsorship opportunities and revenue sources” .
  • “Additionally, we have reduced our ownership position of CONtv to focus on our core business… look forward to helping them grow with access to exclusive events and content generated at all of our Comic Con’s next year” .

Q&A Highlights

  • No Q3 2015 earnings call transcript identified in filings; Q&A highlights are unavailable based on the document set searched (earnings-call-transcript returned 0 documents for the period) [ListDocuments result].

Estimates Context

  • S&P Global consensus estimates could not be retrieved due to access limitations; estimate comparisons are not provided. Unavailable.

Key Takeaways for Investors

  • Record quarterly revenue and expanded gross margin signal operating leverage as the event slate scales; convention revenue is the dominant driver (93% of total) .
  • Average revenue per convention declined QoQ and YoY, highlighting event mix and market maturation; continued efficiency gains partly offset this pressure .
  • Strategic CONtv restructuring reduces cash burn ($25K/month, $300K cap), retains strategic access (10% interest, board seat), and removes content obligations—freeing focus and capital for core events .
  • ComicConBox momentum provides diversified recurring revenue adjunct to conventions; management cited growing subscriber base and revenues .
  • 2016 Gaming tour introduces a new sponsorship vector and audience segment, potentially improving monetization across shows .
  • Liquidity of $4.28M at quarter-end supports near-term execution, with management stating adequacy to fund the growth plan .
  • Near-term narrative is balanced: efficiency-driven margin gains and new initiatives vs. lower average revenue per event and higher OpEx YoY; monitoring event-level profitability and sponsorship traction is key .