Esports company Allied Esports Entertainment released today its first quarter 2022 financial results, posting its best quarterly performance of all time in both revenue and adjusted EBITDA.
Business Performance Metrics
For the three months ended March 31, 2022, Allied Esports Entertainment posted revenues of $2.4 million, a massive 381% increase on $501,000 in Q1 2021, driven by three main factors: the increased foot traffic at HyperX Arena Las Vegas as a result of the increased number of sporting events, sponsorship revenue and the sales from the launch of Non-Fungible Token (NFT).
The increased number of live sporting events impacted the company’s expenses which reached $6.16 million, up nearly 15% from $5.38 million in Q1 2021. In-person expenses alone increased 236% to $1.81 million as compared to $538,000 in the first three months of 2021.
In nominal terms, the increase in revenue did not manage to offset the increase in expenses and Allied Esports ended the quarter with a net loss of $3.75 million, an improvement of 23% on the net loss of $4.87 million for the respective three-month period in 2021.
Commenting on the results, Allied Esports interim chief executive officer Lyle Berman hailed the quarter which produced “record revenue and adjusted EBITDA,” moved the business to a “more normalized environment” and helped “drive strong interest from outside parties” in line with the company’s objective “to pursue strategic alternatives…including a potential sale of the business.”
Net loss from continuing operations amounted to $3.75 million, down from $4.97 million for the first quarter of 2021 and contributing to the improvement in adjusted EBITDA, which was a loss of $2.5 million, as compared to a loss of $3.3 million in Q1 2021. Net loss in Q4 2021 was $6.3 million.
“Concurrently, we continue to make progress in our ongoing efforts to invest the cash on our balance sheet to acquire or merge with an existing business.”Lyle Berman, Interim CEO, Allied Esports Entertainment
The company’s cash position as of March 31, 2022, stood at $90.7 million, down from $92.9 million at the end of Q4 2021 while outstanding common stock comprised approximately 39.1 million shares.
Key Business Initiatives
On the operational side, Allied Esports had a busy quarter with several key business initiatives such as the first original branded content from AE Studios, ELEVATED Presented by Progressive Insurance sponsored by HyperX and Tyson Foods.
The company also minted 1,958 NFTs from its first collection, EPICBEAM, on the Ethereum Blockchain to position the business on the first row to benefit from the next evolutionary stage of the Internet, Web3, and its application in the development, activation, rewarding, and monetization.
Allied announced in the quarter a partnership with NASCAR to bring eNASCAR Arcade to 17 Cup Series five of which took place in the reported quarter: the Busch Light Clash at The Coliseum in Los Angeles, the DAYTONA 500 in Daytona, Florida, the Wise Power 400 at Auto Club Speedway in Fontana, California, the Ruoff Mortgage 500 at Phoenix Raceway in Phoenix, Arizona, and the EchoPark Automotive Grand Prix at Circuit of the Americas in Austin, Texas.
In total, Allied Esports produced 68 proprietary and 24 third-party events in the quarter across its North American and European business units.