Allied Gaming & Entertainment (AGAE) - 2025 Q2 - Quarterly Results

Company Overview Company Introduction Allied Gaming & Entertainment, Inc. (AGAE) is a global experiential entertainment company focused on providing unique experiences to gamers and concertgoers through its assets, products, and services - Allied Gaming & Entertainment, Inc. (NASDAQ: AGAE) is a global experiential entertainment company[1][9] - The company is dedicated to providing unique experiences to a growing audience of gamers and concertgoers through its renowned assets, products, and services[9] CEO Statement and Strategic Outlook New CEO Yangyang Li stated that despite Q2 performance being impacted by dissident shareholder interference, the company made significant progress on key strategic initiatives, including strategic investments in iconic IPs like Angry Birds 3, with these efforts expected to reflect in financial results in coming quarters - New CEO Yangyang Li stated that second-quarter performance was impacted by interference related to dissident shareholders[2] - The company made progress on key strategic initiatives, including participating in strategic investments in iconic intellectual properties such as Angry Birds 3[2] - These efforts are expected to increasingly reflect in the company's financial results in the coming quarters[2] Second Quarter 2025 Financial Results Revenues Total revenue for Q2 2025 was $1.9 million, a 27% year-over-year decrease, primarily due to a $1.0 million reduction in mobile gaming revenue, partially offset by a $0.2 million increase in live event revenue | Metric | Q2 2025 | Q2 2024 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Revenue ($) | $1.9 million | $2.6 million | -$0.7 million | -27% | | Mobile Gaming Revenue ($) | - | -$1.0 million | - | - | | Live Event Revenue ($) | - | +$0.2 million | - | - | - Total revenue decreased by 27% year-over-year, primarily due to a $1.0 million reduction in mobile gaming revenue, partially offset by a $0.2 million increase in live event revenue[3] Costs and Expenses Total costs and expenses for Q2 2025 slightly increased to $8.0 million from $7.9 million in the prior year, with a decrease in casual mobile gaming expenses offset by a $0.5 million rise in general and administrative expenses, mainly due to dissident shareholder-related legal and professional fees | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Costs & Expenses ($) | $8.0 million | $7.9 million | +$0.1 million | | General & Administrative Expenses ($) | - | +$0.5 million | - | - General and administrative expenses increased primarily due to $0.5 million in legal and professional fees related to dissident shareholder complaints and proxy contests[4] Net Loss and Adjusted EBITDA Net loss widened to $4.8 million and Adjusted EBITDA loss increased to $2.1 million in Q2 2025, both deteriorating compared to the prior year | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Loss ($) | $4.8 million | $3.9 million | Loss widened by $0.9 million | | Adjusted EBITDA Loss ($) | $2.1 million | $1.7 million | Loss widened by $0.4 million | Balance Sheet Highlights Key Financial Position Metrics As of June 30, 2025, the company's cash and short-term investment position and working capital both decreased compared to December 31, 2024 | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Cash & Short-term Investments ($) | $60.0 million | $71.5 million | -$11.5 million | | Working Capital ($) | $44.9 million | $64.3 million | -$19.4 million | | Common Shares Outstanding (shares) | 38.0 million shares | - | - | Operational Update Event Activities In Q2 2025, the company hosted 75 events, comprising 36 owned events and 39 third-party event days, spanning gaming, street culture, esports, and brand licensing - The company hosted 75 events in Q2 2025, including 36 owned events and 39 third-party event days[8] - Third-party events included SNEAKS Showdown, Power Esports Conference, EVE Offsite, Licensing International 2025 Awards, and multiple World Poker Tour events[8] Non-GAAP Financial Measures Explanation GAAP vs. Non-GAAP Definitions and Rationale The company provides EBITDA and Adjusted EBITDA as supplements to GAAP financial measures to help investors evaluate operating performance more effectively by excluding certain non-cash, non-recurring, or unusual items that may not represent core business, while emphasizing these non-GAAP metrics are not GAAP substitutes and may differ from other companies' calculations - The company provides EBITDA and Adjusted EBITDA as supplements to GAAP financial measures to help external users evaluate operating performance and facilitate period-to-period and peer comparisons[10][24] - EBITDA is defined as earnings before interest, income taxes, depreciation, and amortization; Adjusted EBITDA further excludes non-cash, non-recurring, and unusual items such as stock-based compensation, non-recurring legal fees, restricted cash repayments, and unrealized foreign currency transactions[11][24] - The company acknowledges the limitations of non-GAAP measures, as they do not reflect all GAAP items and different companies may use varying calculation methods, thus lacking standardized meaning[10][14][24] Forward-Looking Statements Disclaimer and Risk Factors This communication contains forward-looking statements under federal securities laws, involving potential growth opportunities, future financial conditions, and operating plans, which are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations, with readers advised to consult the 'Risk Factors' section in its 10-K annual report and subsequent SEC filings - Forward-looking statements include potential growth opportunities, objectives, beliefs, strategies, plans, product and service development, future financial condition, results, or projections[16] - These statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from forward-looking statements[16] - Readers should consult the 'Risk Factors' section in the company's Annual Report on Form 10-K filed on December 31, 2024, and subsequent SEC reports for more information on factors that could potentially impact business and results[17] Investor Contact Contact Information Investors can contact Addo Investor Relations for further information - Investor contact information is Addo Investor Relations, email: agae@addo.com[18] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets The condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, present the company's assets, liabilities, and stockholders' equity | | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and Cash Equivalents ($) | $23,075,975 | $59,242,802 | | Short-term Investments ($) | $33,894,921 | $8,800,000 | | Total Current Assets ($) | $87,528,937 | $94,745,632 | | Total Assets ($) | $108,576,901 | $112,687,259 | | Liabilities and Stockholders' Equity | | | | Total Current Liabilities ($) | $42,653,904 | $30,478,161 | | Total Liabilities ($) | $46,502,777 | $35,157,377 | | Total Stockholders' Equity ($) | $62,074,124 | $77,529,882 | | Total Liabilities and Stockholders' Equity ($) | $108,576,901 | $112,687,259 | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations for the three and six months ended June 30, 2025, and June 30, 2024, detail revenues, costs and expenses, and net loss | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | Revenues: | | | | | | Live ($) | $1,160,995 | $917,362 | $2,817,750 | $2,172,560 | | Multi-platform Content ($) | $80 | $52 | $137 | $111 | | Casual Mobile Gaming ($) | $758,408 | $1,722,454 | $1,376,731 | $2,846,258 | | Total Revenues ($) | $1,919,483 | $2,639,868 | $4,194,618 | $5,018,929 | | Costs and Expenses: | | | | | | Total Costs & Expenses ($) | $8,011,461 | $7,930,120 | $15,538,219 | $12,984,679 | | Operating Loss ($) | ($6,091,978) | ($5,290,252) | ($11,343,601) | ($7,965,750) | | Loss Before Income Taxes ($) | ($4,833,967) | ($3,882,951) | ($9,733,854) | ($5,712,402) | | Net Loss ($) | ($4,833,967) | ($3,882,951) | ($9,733,854) | ($5,712,402) | | Net Loss Attributable to Common Stockholders ($) | ($4,811,134) | ($3,803,258) | ($9,647,618) | ($5,502,368) | | Basic and Diluted Net Loss Per Share ($) | ($0.11) | ($0.09) | ($0.22) | ($0.13) | Non-GAAP Financial Measures Reconciliation A reconciliation of GAAP net loss to EBITDA and Adjusted EBITDA is provided, with footnotes explaining adjustments for non-recurring legal fees and proxy contest costs | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | Net Loss ($) | ($4,833,967) | ($3,882,951) | ($9,733,854) | ($5,712,402) | | Interest Income, Net ($) | ($1,015,094) | ($1,041,468) | ($1,879,399) | ($1,900,673) | | Depreciation and Amortization ($) | $389,712 | $402,968 | $772,150 | $780,168 | | EBITDA ($) | ($5,459,349) | ($4,521,451) | ($10,841,103) | ($6,832,907) | | Non-recurring Legal Fees (1) ($) | $2,403,541 | $2,938,034 | $4,027,488 | $3,138,034 | | Non-recurring Proxy Contest Costs (2) ($) | $1,074,533 | - | $1,077,851 | - | | Marketable Securities Investment (Gain) ($) | ($787,869) | - | ($512,593) | - | | Money Market Fund Investment (Gain) ($) | ($19,588) | - | ($386,109) | - | | Foreign Currency Transaction (Loss) Gain, Net ($) | $535,745 | ($351,434) | $1,101,041 | ($351,434) | | Stock-based Compensation ($) | $190,762 | $202,308 | $379,198 | $673,908 | | Adjusted EBITDA ($) | ($2,062,225) | ($1,732,543) | ($5,154,227) | ($3,372,399) | - Footnotes explain non-recurring legal fees relate to shareholder complaints, and non-recurring proxy contest costs relate to proxy litigation between the company and dissident shareholders[27]