Allied Gaming & Entertainment (AGAE) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics - Total revenues for Q2 2024 were $2.6 million, up 11$2 million decrease in branded content production revenues, partially offset by a $1.7 million increase in casual mobile gaming revenues from Z-Tech [10] - Total costs and expenses for Q2 2024 were$7.9 million, up from $4.7 million in Q2 2023, with$3 million of the increase attributed to litigation costs related to Knighted Pastures' hostile takeover attempt [10] - Net loss for Q2 2024 was $3.9 million, compared to a loss of$1.8 million in Q1 2024 and $0.7 million in Q2 2023 [11] - Adjusted EBITDA loss for Q2 2024 was$1.4 million, compared to a loss of $1.7 million in Q1 2024 and$1.1 million in Q2 2023 [11] - Cash and short-term investments totaled $95.2 million as of June 30, 2024, up from$78.6 million at December 31, 2023, primarily due to low and non-interest-bearing loans from Morgan Stanley Bank Asia Limited [12] - Working capital surplus was $61.8 million as of June 30, 2024, compared to$66.4 million at December 31, 2023 [12] Business Line Performance - HyperX Arena hosted 65 event dates in Q2 2024, including 40 third-party events, with notable events such as the WPT Seminole Hard Rock Poker Showdown and the Mobile Legends Bang Bang 2024 North America Challenger Tournament Spring Grand Finale [6] - Z-Tech, the casual mobile gaming subsidiary, saw a 53% increase in Q2 in-game ad revenue compared to Q1 2024, driven by the release of the new game Balloon Pop Mania [8] - The company announced the launch of the World Mahjong Tour (WMT), modeled after the World Poker Tour, with regional tournaments leading to a final event at HyperX Arena in spring 2025 [7] Market and Strategic Initiatives - The World Mahjong Tour (WMT) is expected to leverage the company's expertise in mobile games, content production, and membership services, aiming to capitalize on the resurging popularity of mahjong, particularly among younger generations [7] - Allied Experiential Entertainment (AEE) is in negotiations to partner with a popular annual music festival in Macau, expanding its opportunities in Asia [7] - Z-Tech's momentum in casual mobile gaming is expected to drive sustained revenue growth in the second half of 2024 [8] Management Commentary - The CEO expressed optimism about the company's upward trajectory, particularly with the launch of the World Mahjong Tour and the strong performance of Z-Tech [5][13] - The CFO highlighted the impact of litigation costs on expenses but noted the company's strong cash position and working capital surplus [10][12] Other Important Information - The company emphasized its focus on non-GAAP financial measures, with reconciliations and explanations provided in the earnings release [4] - The CEO reiterated confidence in the management team's ability to lead the company forward, with all three subsidiaries expected to capitalize on revenue opportunities in the near future [13] Q&A Session - No questions or answers were provided in the transcript [14]