EEG(US:GMBL)2021-11-16 04:07Financial Data and Key Metrics Changes - Revenues for Q1 2022 were $16.4 million, an increase of 86% from Q4 2021 and significantly up from $220,000 in the prior year period [4][18] - Gross profit for the quarter was $10.0 million, a 92% rise from $5.2 million in Q4 2021, with a gross margin of 61% [19] - Adjusted EBITDA was negative $2.7 million, an improvement from negative $5.5 million in Q4 2021 [22][24] - Total net loss for the period was $0.6 million, compared to a net loss of $1.8 million in Q1 2021 and $4.8 million in Q4 2021 [24] Business Line Data and Key Metrics Changes - iGaming revenues were $14.7 million, with over 71,000 active players, representing a 45% growth quarter-over-quarter [5] - EEG games revenue was $1.8 million, marking significant growth from the prior year, with ggCircuit being the largest contributor [10] Market Data and Key Metrics Changes - The company completed the acquisition of Bethard, contributing more than $30 million in annualized revenues and valuable sports betting licenses in Sweden and Spain [5][27] - The launch of the new Pay-and-Play casino brand in Finland, Fiksukasino, is forecasted to generate €10 million in fiscal 2022 [6][7] Company Strategy and Development Direction - The strategy focuses on creating a global multi-brand sportsbook and casino on a fully owned technology platform [5] - The company aims to exceed $100 million in revenue for fiscal 2022, with a split of approximately 85/15 between iGaming and EEG games [32] - Plans to open approximately one Helix center per quarter for the next two years, enhancing physical presence in the gaming market [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth and momentum of the iGaming business, particularly following the acquisition of Bethard [27] - The company anticipates launching its esports betting platform in New Jersey soon, with potential expansions into other states like Ohio and Ontario [42][43] - Management expects to achieve positive adjusted EBITDA by the end of calendar 2022 [33] Other Important Information - The company raised $8 million in gross proceeds from a convertible stock offering to support its growth strategy [17][25] - The Helix centers are expected to attract significant attention from professional sports teams, enhancing marketing opportunities [14][66] Q&A Session Summary Question: Can you provide insights on gross margins and future expectations? - Management indicated that the addition of Bethard contributed positively to gross margins, which are expected to remain in the high 50s to 60% range going forward [38] Question: What is the expected revenue contribution from Bethard? - Management did not provide a specific figure during the call but indicated they would follow up [39] Question: What is the expected capital expenditure for new Helix centers? - The estimated capital expenditure ranges from $500,000 to $1.5 million per campus, with an expected ROI of about 18 months [40] Question: When can revenues from New Jersey be expected? - Management is optimistic about launching in New Jersey before the end of the calendar year, despite initial delays [42] Question: What is the current cash burn rate? - The current cash burn rate is just under $1 million per month [45] Question: How does the company plan to approach customer acquisition for the esports betting platform? - The strategy includes advertising through existing Helix centers and leveraging relationships with professional sports teams and influencers [51] Question: What revenue level is expected to achieve positive EBITDA in Q4? - Management expects revenue in the low to mid-$30 million range for Q4 to achieve positive EBITDA [55] Question: What is the projected revenue from New Jersey for fiscal 2022? - A very prudent estimate of around $1 million has been factored into the revenue guidance for New Jersey [70]