Allied Esports Entertainment achieved its best revenue and adjusted earnings performance since it sold its poker operations during the first quarter of 2022.
In a trading update to 31 March, Allied – which sold assets including World Poker Tour for $105m last July – said total revenues from continuing operations of $2.4m had increased by 381% for the first quarter of 2022, compared to the first quarter of 2021.
The group posted revenues of $6.2m in the first quarter of 2019, prior to the Covid-19 pandemic and the divestment of its poker segment.
Allied, which stages esports events and provides content to digital partners, said the improvement in continuing operations was driven by increased foot traffic at its HyperX Arena Las Vegas due to an increased number of events and sponsorship revenue from the launch of Allied’s first original branded content offering.
The company also attributed the revenue to first time non-fungible token (NFT) sales and other encouraging results from its multiplatform content pillar.
Revenue comprised $2.2m from in-person events, with $208,988 from its multiplatform content.
Total costs and expenses for the first quarter of 2022 were $6.2m, an increase of 15% compared to the first quarter of 2021. Costs and expenses increased primarily due to the increase in in-person expenses due to the recovery of live in-person events.
Net loss for the first quarter of 2022 was $3.8m compared to a net loss of $3.3m in the prior year period. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) loss was $2.5m for the first quarter of 2022 compared to a loss of $3.3m in the first quarter of 2021.
“I am very pleased with the operational performance of our esports business, which generated record revenue and adjusted EBITDA during the quarter and has continued to gain momentum as we emerge from the pandemic and move to a more normalized environment,” said Lyle Berman, Allied’s interim chief executive.
“This solid operational recovery is helping drive strong interest from outside parties as we move ahead with our previously stated objective to pursue strategic alternatives for the esports operations, including a potential sale of the business.”
Allied Esports completed the sale of its poker assets – including the World Poker Tour – to Element Partners last July following a lengthy bidding war.
The deal was worth $105m and included 100% of the outstanding capital stock of each of the legal entities connected to Allied’s poker-related assets. The Allied business now consists only of its core esports business and cash reserves from this transaction.
Berman added: “Concurrently, we continue to make progress in our ongoing efforts to invest the cash on our balance sheet to acquire or merge with an existing business. At the end of the first quarter, our cash balance totaled nearly $96m, including restricted cash.”
“We remain focused on finding the best opportunity available to maximize value for our shareholders. While we are limited in what we can currently disclose about the process, I look forward to providing the market with an update on our progress at the appropriate time.”