Esports Entertainment Group has released its financial results for the fiscal second quarter of 2021 showing that the business generated $2.36m (£1.70m/€1.96m) in revenue for the three months ended 31 December 2020.
Revenue was up more than tenfold from $222,392 for the first quarter of its 2021 financial year, ended 30 September, which was the first quarter for which the group reported revenue following its acquisition of online operator Argyll Entertainment in July 2020.
Turnover, net revenue and gross gaming revenue (GGR) returned to pre-Covid levels in October, the business said, with total handle above $16m for the month and GGR above $700,000.
Total handle for December was $20m, with revenue over $850,000.
Operating expenses for the three-month period came to $8.1m, up from just $700,000 for the same period in 2019. The increase was primarily attributable to the increased payroll, stock compensation, marketing, legal and professional service fees related to increase business activity, the group said.
Net loss for the period came to $7.3m, up 137.6% from 2019’s loss. This loss was driven principally by reduced revenues related to measures taken after the British Gambling Commission’s audit of Argyll Entertainment.
The group has raised its 2020/2021 revenue guidance to $18m from $13m, reflecting its more recent acquisitions of online casino operator Lucky Dino, B2B software provider ggCircuit and esports centre operator Helix eSports.
Including the acquisitions of Helix Esports and ggCircuit, the business said it expects to report $70 million in revenue in the fiscal year 2022.
The business also completed its acquisition of Esports Gaming League (EGL) in January, and the tournament organiser went on to announce several partnership deals with sports teams including the Philadelphia Eagles, LA Kings and LA Galaxy, to become the organisations’ official esports tournament provider.
The group yesterday completed a capital raise of $30m, in order to build resource for the continuation of its long-term business strategy.
“The foundation we have built is primed to generate rapid growth in the quarters ahead,” Grant Johnson, chief executive of Esports Entertainment Group, said.
“Revenue growth, driven by our Argyll Entertainment acquisition, accelerated throughout the fiscal second quarter. With the acquisitions of Lucky Dino, Helix Esports and ggCircuit, we have raised our revenue guidance from $13 million to $18 million for fiscal 2021.”
“Additional key milestone achievements subsequent to quarter end, including completing our acquisition of EGL and greatly expanding the eligible operating jurisdictions for our VIE and SportNation brands, provide further growth opportunities.”
Johnson went on to describe how the novel coronavirus (Covid-19) pandemic had accelerated the growth of the esports vertical, with increased exposure on mainstream television and more interest from professional sports franchises.
“Looking ahead, we are building on our momentum, and with today’s capital raise of $30 million, we have the resources to further accelerate the monetization of our robust three pillar strategy,” concluded Johnson.
