Net loss down at Allied Gaming despite revenue drop in Q1
Q1 was the first full quarter since the group set out plans to restructure its existing esports business operations and expand its focus into a wider range of markets, after it completed a strategic review in December last year.
At the time, Allied said focusing on a broader array of entertainment and gaming products and services, as opposed to seeking a single business combination transaction, would be in the interest of shareholders.
Allied’s chief executive Yinghua Chen said the group advanced on its strategic objectives in Q1 and that this will help it to continue to gain momentum in Q2.
“It has been a strong start to the year so far at Allied and we are continuing to gain momentum in the second quarter as we advance on our strategic objectives,” Chen said. “We are also excited to have recently announced our continued relationship with HyperX/HP on the Arena branding side and renewal of sponsorship from Progressive Insurance on our original content programmes.
“These growing relationships are further evidence that Allied is recognised as an established name in the gaming entertainment community and that we offer an inroad to this crucial and fast-growing multi-billion-dollar gaming marketplace.”
Revenue for the three months to 31 March was $1.2m (£953,613/€1.1m), down from $2.2m in the corresponding period last year.
This decline, Allied said, was mainly due to the timing of its original “Elevated” content series, which recognised revenue for season one in Q1 of last year and is expected to recognise revenue for season two in the second quarter of 2023.
The business also noted that revenue was relatively flat on a quarter-on-quarter basis from Q4.
In terms of spending, costs and expenses were 38.7% lower at $3.8m, helped by a reduction in general and administrative expenses, principally cash, severance and stock-based compensation, as well as the timing and related expense recognition of the Elevated series.
The decline in expenses meant operating loss was cut from $3.7m to $2.7m while, after also including $761,904 in other income, including $734,449 in interest income, it resulted in a net loss of $1.9m compared to $3.8m in 2022.
Allied also noted a positive impact of $1,880 in foreign currency translation adjustments, which meant total net loss was $1.9m, in contrast to $3.7m last year.