Allied Gaming & Entertainment Eyes Expansion after Q2 Growth

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Allied Gaming & Entertainment recently expressed optimism over potential expansion, driven by its Q2 revenue growth, which follows a significant restructuring of the company towards the end of last year.

Details of the restructuring became public in December 2022 and it included a thorough overhaul of the company’s eSports segment. The company also broadened its offering to include a wider range of gaming and entertainment products. As part of this, the company also rebranded from Allied Esports Entertainment.

2023 Q2 was the second complete quarter since the restructuring and Allied announced an increase in revenue and a fall in net losses. According to president and CEO Yinghua Chen, this was in part due to changes introduced at the end of last year.

New Subsidiaries Created to Aid Growth

The changes include the creation of two new subsidiaries, Allied Mobile Entertainment (AME) and Allied Experiential Entertainment (AEE). AME was created to focus on mobile gambling while AEE focuses on live events, experiential venues, management, and consultation.

We expect that AME and AEE Entertainment will enable us to break into new markets, creating additional revenue streams and enhancing our financial performance within the next 12 months. This restructuring aims to optimise our resources and provide investors with greater clarity on our business outlook and direction.

Yinghua ChenAllied Gaming & Entertainment President and CEO

Analyzing Allied’s Q2 Performance

For the period ending 30 June, Allied reported revenue of $3.3m, marking a 182.3% increase from the $1.2m of the previous year. The majority of this, $2.0m, was credited to their multiplatform content initiatives. This is an impressive 6,927.8% rise from 2022, largely credited to the launch of the second instalment of the ‘Elevated’ content series.

Furthermore, in-person revenue saw a growth of 18.2%, reaching $1.1m for the quarter. This was bolstered by the acquisition of new naming rights for one of Allied’s facilities.

A decrease in operating expenses by 2.1% brought them to $4.7m in Q2. Moreover, a spike in interest income contributed an extra $704,013. Therefore, the pre-tax loss was limited to $691,218, a remarkable turnaround from the previous year’s $3.7m.

The net loss for the quarter stood at $691,218, a sharp drop from 2022’s $3.8m. Additionally, the quarter witnessed an improvement in adjusted EBITDA, reducing the loss from $2.7m to $1.1m.

First Half of 2023 Reflects Allied’s Revival

The first half of the year saw revenue of $4.5m, a 25% increment year-on-year. In-person revenue stood at $2.5m and multiplatform content revenue at $2.0m. Operating expenses decreased by 22.0% to $8.5m.

After accommodating minor foreign currency adjustments, the net loss remained at $2.6m, a significant drop from the $7.5m loss the previous year. Adjusted EBITDA also witnessed a decline in loss, from $5.3m to a deficit of $3.2m.

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