Esports Entertainment Group Posted FY2021 Revenue Growth

Esports Entertainment Group (EEG) released its fourth quarter and fiscal year 2021 earnings report, posting revenue for the quarter and the fiscal year of $8.8 million and $16.8 million, respectively.

Fourth Quarter Figures

NASDAQ-listed EEG posted 63% rise in net revenue for the three months ended June 30, 2021, compared to the previous quarter and a 100% rise year-over year, while Q4 gross profit of $5.2 million rose 69% compared to Q3 and doubled on Q4 2020. Fourth-quarter gross margin as a percentage of net sales was 59%, up 2% on a sequential base.

Sales and marketing expenses in the quarter were $5.1 million, up from $2.4 million in the previous quarter and compared to $0.3 million in Q4 2020. General and administrative expenses posted a similar pattern, up from $6.3 million in Q3 and $1.8 million in Q4 2020, to $10.5 million in the reported quarter.

As a result, the business ended the fourth quarter with an operating loss of $10.5 million, posting a five-fold increase year-over-year and nearly a double on the loss in Q3 2021. Adjusted EBITDA was negative $5.5 million as compared to $2.1 million in Q3 2021 and negative $0.9 million in Q4 2020.

Fiscal 2021 Figures

Net revenue in fiscal 2021 doubled on the $16.8 million posted in FY2020, and gross profit of $8.9 million was up $8.9 million year-over-year. Gross margin as a percentage of sales in FY2021 was 53%.

On the expenditure side, sales and marketing expenses were up by $9.7 million on FY2020 to reach $10 million, while general and marketing expenses posted an 18% rise year-over-year to $24.6 million.

Full-year operating loss was $25.7 million, an increase of $21.7 million over operating loss accounted for in FY2020. Adjusted EBITDA came at negative $14 million, compared to negative $2.3 million posted in FY2020. The fiscal year saw stockholder equity increase by $63.4 million to reach $74.8 million as the company maintained its FY2022 guidelines of revenue between $100 million and $105 million.

Commenting on the figures, EEG CEO Grant Johnson outlined the strong performance in the fourth quarter was driven by “the formidable foundation” the company built since its IPO in 2020. Further, a new single-day performance registered after the quarter close in September, was the reason for the CEO’s optimistic outlook about the company hitting its guidance target.

“The partnerships we have formed, from top professional sports teams to industry-leading esports and gaming companies, clearly demonstrate the strength of our expansive product and service portfolio, and I believe our future is very bright as we continue to execute on our rapid expansion strategy driven by the solidification of our market position and the ongoing growth of our unique assets.”

Grant Johnson, CEO, Esports Entertainment Group

By the end of the fiscal year, EEG teamed with the New York Rangers to become the official esports tournament provider of the NHL franchise. Other professional sports partners include the Cleveland Cavaliers, Indianapolis Colts, LA Chargers, and Tampa Bay Buccaneers, which named EEG its official esports tournament platform provider after the fiscal year close.