Revenue for the three months to 30 September totalled $5.9m (€5.0m/£4.5m), down 2.7% from $6.0m in the corresponding period last year.
Allied Esports put this down primarily to a drop in in-person revenue, which fell 63.2% to $700,000. This was due to the cancellation or postponement of events at the HyperX Esports Arena Las Vegas flagship esports venue and WPT events due to safety measures related to novel coronavirus (Covid-19).
However, Allied Esports noted that this decline was nearly offset by growth in multiplatform content and interactive services revenue.
Interactive services were the operator’s primary source of income, with revenue here rising 62.5% year-on-year to $3.9m, driven by strong growth in ClubWPT subscriptions and the success of its new ClubWPT Diamond service.
Multiplatform content revenue was also up 22.3% to $1.3m, which Allied Esports said was the result of an increase in distribution revenue from two of its major customers.
“While strong results in the in-person pillar of our business was our primary growth driver for the company prior to the on-set of the pandemic, operational restrictions, including extremely limited social gatherings mandated globally, impacted this part of our business model for both Allied Esports and the WPT during the third quarter,” Allied Esports chief executive Frank Ng said.
“Nonetheless, we generated solid third quarter revenue growth from multiplatform content and interactive services that helped to nearly offset the impact of the pandemic on our business.”
Looking at spending in the quarter, total costs and expenses were down 7.1% to $9.2m, primarily due to lower in-person expenses, selling and marketing costs and general and administrative spend.
This was partially offset by higher costs related to multiplatform content and interactive services, online operating costs and stock-based compensation expenses.
This left an operating loss of $3.3m, compared to $3.8m last year. However, when accounting for $3.2m in additional costs, including $1.5m in interest expenses and an $1.7m extinguishment loss on the acceleration of debt redemptions, this led to a $6.5m net loss, wider than $4.3m in Q3 of 2019.
The operator did see a $45,358 benefit as a result of foreign currency translation adjustments, but it still ended the quarter with a comprehensive loss of $6.5m, compared to $4.3m last year.
In terms of its year-to-date performance, total revenue in the nine months to the end of September was $16.5m, down 15.8% on the same point in 2019.
Revenue from in-person activities was 58.8% lower at $3.7m and multiplatform content revenue fell 18.0% to $3.2m, but interactive services revenue was up 33.3% to $9.6m.
Costs and expenses were up by 9.0% to $32.7m, leaving an operating loss of $16.2m, compared to $10.4m last year. Allied Esports also noted $10.0m in other expenses, including a $5.2m conversion inducement expense, $3.0m in interest costs and the $1.7m extinguishment loss on the acceleration of debt redemptions from Q3.
As such, net loss was $26.2m, much wider than $10.9m at the same point last year, and after a $45,358 benefit from foreign currency translation adjustments, this resulted in a comprehensive loss of $26.2m, compared to $10.9m last year.
“As we look ahead, we believe that the strategic pivot we made to focus on our multiplatform content and interactive services pillars has accelerated our ability to monetise all three pillars of our strategy,” Ng said.
“Importantly, we believe this has put us in a great position to better serve our customers in the future and take full advantage of the significant growth opportunities as the economy continues to recover and the environment normalises.”