Esports Entertainment Group reported a huge year-on-year increase in revenue for the first quarter of its 2022 financial year, ended 30 September, while the operator was also able to more than halve its net loss.
Revenue for the three months to 30 September was $16.4m (£12.2m/€14.4m), which was more than a 70-fold increase from $222,392 in the opening quarter of the operator’s 2021 financial year.
This significant year-on-year growth meant Esports Entertainment generated almost as much revenue in Q1 as it did for its entire 2021 financial year, during which revenue hit $16.8m.
The operator said this increase reflected its expansion over the past 12 months, while the business in Q1 was able to grow its business further through the acquisition of Bethard, the B2C business of Gameday Group, adding Swedish and Spanish licences to the operator.
Other Q1 highlights included submitting a transactional waiver to the New Jersey Division of Gaming enforcement, which, pending final approval, would allow the operator to begin betting operations in that state.
Entertainment also struck new deals with National Football League teams the Indianapolis Colts, Tampa Bay Buccaneers and Los Angeles Chargers, while it partnered with Hall of Fame Resort and Entertainment Company to become the official esports provider for the Hall of Fame Village.
In addition, the operator established a content partnership with ESTV EsportsTV, a 24-7 live linear video channel dedicated to esports, as well as with NetEase to become official North American tournament and broadcast provider of Naraka: Bladepoint.
“Our first quarter revenue nearly matched our performance for the entirety of FY21 and reflects our recent platform building transactions,” Esports Entertainment Group chief executive Grant Johnson said.
“The powerful combination of marquee partnerships, expansive portfolio of products and services and strategic acquisitions is expected to drive double digit year-over-year and quarterly sequential financial growth throughout fiscal 2022.”
Looking at costs, spending was up across all areas with total operating expenses hiking 541.0% year-on-year to $25.0m. This led to an operating loss of $8.6m, compared to $3.9m last year.
The operator also noted $2.3m in interest expense and $1.4m in other non-operating loss, but was helped by $11.8m in income as a result of the change in fair value of warrant liability.
As such, pre-tax loss stood at $552,381, an improvement on $1.8m in the 2021 financial year. The operator did not pay any tax during the quarter, which meant net loss also stood at $552,381, compared to $1.8m last year.
Looking ahead to what the remainder of its 2022 financial year may hold, the operator said revenue is expected to increase by at least 490% to $100.0m in the full year, with this set to be driven mainly by platform-building and strategic diversification acquisitions from the 2021 calendar year.
“With the strong start to FY22 and continued momentum in our business, we are reiterating our expectation that Esports Entertainment will eclipse more than $100m in revenue this fiscal year,” Johnson said.
“We remain ideally positioned in igaming and esports, two of the fastest growing entertainment verticals, and our team is focused on executing our rapid expansion strategy, which we expect will further strengthen our market position and allow us to scale and achieve operating leverage from our portfolio of unique and powerful assets.”
