Gamelancer Media Corp. (CSE:GMNG, OTCQB:GAMGF) told investors it expects to turn ‘EBITDA positive’ in its 2023 financial year as its posts triple-digit revenue growth.
Announcing management reviewed financial results for the quarter ended December 31, 2022, and 2023 guidance, the company said booked revenue for the current year amounts to $8.6 million, a 238% year-over-year (YoY) increase, while its gross profit margin is expected to reach 68%, from 60%, as it reduces total expenses by 36%.
"Gamelancer Media has experienced tremendous growth both in terms of expanding subscribers on our network and increased recurring revenues from our brand partners,” Gamelancer Media president Mike Cotton said in a statement. “We have consistently demonstrated the value of advertising to our network of over 38 million subscribers, most of whom are 12-to-40-year-olds, which brands are clamouring to reach.”
READ: Gamelancer Media surpasses 38 million followers, a 42% YoY Increase
The company said its sales pipeline features booked business into 4Q 2023, a TikTok partnership whereby Gamelancer and TikTok Canada are in market together, and new Snapchat shows added to the Gamelancer roster monthly.
“Over the past year, we've run successful campaigns with brands whose products range from consumer electronics to Schedule I banks, to the largest sports broadcast network in the United States,” Cotton added. “Gamelancer continues to bolster its reputation as one of the most engaging social media communities with a unique ability to offer creative services through its production business. We are poised to grow our direct media revenues in 2023 and to expand paid partnerships into categories such as fashion, apparel, quick-serve restaurants, financial services, and beyond."
Revenue for the fourth quarter to December 31, 2022, amounted to $1.67 million, with an adjusted EBITDA (earnings before interest, tax, depreciation and amortization) loss of $1.39 million.
4Q 2022 summary and key highlights:
- Gamelancer deepened engagement with brand partners and its community of followers:
- Produced Samsung Canada's largest digital campaign of the year, the Samsung Connectivity campaign;
- Gamelancer wins Samsung US business;
- Promoted NFL Monday Night Football driving Gamelancer followers to tune into broadcasts on ESPN+;
- Produced a campaign to promote financial literacy to Gen Z demographic (individuals aged 12 to 26) for Schedule I financial institutions; and
- Multi-year engagement with Thorn, Ashton Kutcher's foundation, to build creative and distribution to promote online child safety.
The company said a significant portion of 2022 revenue growth was attributable to its brand partners adding additional contracts and repeat business due to better-than-expected campaign results. Several Gamelancer partners renewed campaigns and upgraded to an ‘always on' category to establish a more comprehensive relationship with Gamelancer Media, it added.
Strategic partnerships
The company said the success of these campaigns is further supported by the finalization of strategic partnerships with TikTok North America and Snap Inc. It noted that it became just the second Canadian partner to enter a Joint Business Venture with TikTok North America and its enhanced engagement with Snapchat included the addition of several new shows on Snapchat Discover.
"We are forecasting triple-digit revenue growth year-over-year from FY2022 to FY2023, with anticipated revenues of $8.6 million," CEO Jon Dwyer said.
"63% of our revenues will be generated through our Direct Media business on TikTok, and 37% driven from our Snapchat OTT business. Cumulative FY2023 gross margin of 68%, an 8% increase YoY. Managing direct costs associated with campaigns to drive scalability, creating a flywheel of creative production + distribution across our TikTok and Snapchat networks respectively," Dwyer added. "Gamelancer's ownership of JoyBox Media provides the business a full production studio and talent management team which allows us to internalize costs of production, drive profitability and therein scale our production business."
The company said it expects to release audited 4Q and fiscal year-end 2022 on or before April 30, 2023.
Its shares were 18% higher at C$0.12 by 1pm Eastern Time.
Gamelancer Media's competitive advantage lies in its unique business model. The full-service media company offers brands, agencies, and creators the opportunity to collaborate on bespoke content and/or User Generated Content (UGC). Gamelancer's UGC model focuses on smaller creators, giving a much more authentic feel to brand messaging and delivering superior results to its partners. This model also helps smaller creators grow their online presence and better establish their careers as influencers.
In addition to content creation, Gamelancer offers distribution packages with exclusive access to the Company's 44 owned-and-operated channels on its social media network. Spanning TikTok, Snapchat, and Instagram, Gamelancer customizes campaigns to optimize results for each brand's unique campaign needs.
Contact the author at stephen.gunnion@proactiveinvestors.com