Enthusiast Gaming Reports Q3 2023 Net Loss
Enthusiast Gaming, a prominent name in the esports and media industry, recently announced its Q3 2023 financial results, revealing a net loss of CAD $59.1m (~£34.53m). This represents a considerable increase compared to the same period in 2022, with the company attributing the higher losses to a ‘non-cash impairment expense’ of CAD $51.7m (~£30.21m).
Decrease in Revenues
Despite its standing in the industry, Enthusiast Gaming recorded a 10% decrease in revenues, amounting to CAD $45.6m (~£26.64m) in Q3 2023. This decline was evident in the ‘Media and Content’ division as well, which saw a corresponding 10% decrease in revenue, dropping to CAD $39.8m (~£23.25m).
Company Holdings and Franchise
Enthusiast Gaming maintains ownership of several entities within the esports and gaming realm, including Luminosity Gaming and popular FPS titles such as EV.IO. The company also controls the Call of Duty League franchise, Seattle Surge. Notably, in 2022, Enthusiast Gaming divested its media assets to GAMURS Group, the parent company of esports publication Dot Esports.
Performance in Esports and Entertainment
The financial report for Q3 2023 also revealed a 12% decrease in esports and entertainment revenue compared to the same period last year. However, it wasn’t all negative, as Enthusiast Gaming was pleased to report a 1% increase in gross profit, totaling CAD $16.7m (~£9.67m). Additionally, the company experienced a 4% rise in total views compared to Q3 2022.
Financial Balance and Liquidity
Notably, at the end of the quarter, Enthusiast Gaming’s cash balance stood at CAD $2.8M (~£1.64), representing a decrease of CAD $4.6m (~£2.69m) in available cash. The company attributed this decline to repayments on its Term Credit, which amounted to CAD $3.3m (~£1.93m). However, the company later expanded its term and operating credit facilities in mid-October, resulting in additional liquidity of approximately CAD $7m (~£4.09m).
During the quarter, Enthusiast Gaming achieved significant milestones in its operational activities. The company collaborated with Netflix and Metavision to launch its first-ever Fortnite Creative in-game experience for One Piece, a move that garnered attention within the gaming community. Additionally, Enthusiast Gaming kicked off the second season of its video gaming series, NFL Tuesday Night Gaming (NFL TNG), which saw an increase in the number of advertisers from 11 in Season 1 to 14 in Season 2.
Strategic Partnerships and Brand Solutions
Enthusiast Gaming also secured renewals and new additional business with prominent advertisers such as Coca-Cola, UPS, Toyota, and others, highlighting its ability to attract and retain significant partnerships. Interestingly, renewals and additional business with existing customers accounted for 69% of Brand Solutions revenue in Q3 2023, with a combined revenue of CAD $9.8m (~£5.73m), a modest decrease of 3% compared to the same period in 2022.
In the fast-evolving landscape of esports and gaming, Enthusiast Gaming’s Q3 2023 financial performance offers valuable insights into the industry’s dynamics. The company’s strategic collaborations, financial adjustments, and operational milestones position it as a key player in the ever-growing esports and gaming sector.
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