GameSquare Esports Inc reported strong 3Q financial results that saw the company’s revenue increase by 123% on a quarter-over-quarter basis to C$2,464,906.
The figure compares to the C$1.1 million it reported in 2Q 2021 thanks to a strong showing from its Code Red esports division and the first contribution from its recent acquisition of Complexity Gaming.
For the three months ended August 31, 2021, the Toronto-based company’s Teams segment generated revenue of C$254,055 in North America, according to details released by the company.
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GameSquare’s Agency services division saw $2,210,840 in revenue, broken down by region with Europe generating $1,438,472 and North America $772,368.
Both the Teams segment and the Agency services segment generated gross profits of $96,845 and $590,192, respectively.
CEO Justin Kenna called the firm’s 3Q a “truly transformational” period for the gaming company.
“We have been active in acquiring assets that enable us to execute on our strategic vision and we have now turned much of our attention to integrating the assets to accelerate revenue growth while keeping profitability top of mind in every decision that we make,” Kenna said in a statement accompanying the results.
“The acquisition of Complexity Gaming and the addition of TimTheTatman positions GameSquare as a leading esports organization and we are just getting started. Our agency business was strengthened by the acquisition of Cut+Sew and the work that we have done to realize revenue synergies with GCN and Code Red is happening faster than we expected, as evidenced by the strength of our preliminary 4Q results.”
Revenue projections 'realistic and achievable'
Kenna told shareholders that the firm is confident it will meet its revenue projections of $28 million for calendar 2022, calling the target “realistic and achievable.”
Year-to-date, GameSquare has reported $4,616,977 in revenue for the nine months ended August 31, 2021.
“We are building a leading esports organization,” the CEO told investors.
“The strategic partnerships that we have announced and the acquisitions that we have closed are showing real progress and the inbounds that we have had from brands, talent, and potential M&A targets has been remarkable. While our focus through 3Q has been integration of the great companies that we own, we continue to look at great companies run by great people that fit within what we are building.”
The firm said that while it continues to consider acquisitions of high growth, EBITDA positive agencies with a focus on esports, sports and entertainment in order to strengthen its footprint in Europe and the US, it doesn’t expect to complete additional transactions in 2021.
“We have built a great platform, with great people that are already doing great things. The trends in esports point to growing engagement by global brands and we believe that the GameSquare family of companies is at the intersection of culture, commerce, and investment,” Kenna added.
Net loss for the period came in at C$12.1 million or $0.07 per share, compared to a $5,543 profit in the same year-ago quarter.
GameSquare ended the quarter with $13,079,212 in cash and working capital of $12,365,615.
Contact Angela at angela@proactiveinvestors.com
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