GameSquare Announces Preliminary Q3 2024 Revenue Of $26.5M; Increases 2024 Annual Proforma Revenue Guidance To $105M-$110M; Provides Business Update

Preliminary Q3 revenue estimated to exceed $26.5 million

Expected adjusted EBITDA loss of approximately $2.4 million, representing a $3.0 million improvement from Q2 2024

As a result of strong Q3 and YTD performance, GameSquare has increased its 2024 annual proforma revenue guidance to $105 million to $110 million

FRISCO, TX / ACCESSWIRE / October 17, 2024 / GameSquare Holdings, Inc. (NASDAQ:GAME), ("GameSquare", or the "Company"), today announced preliminary financial results for the third quarter ended September 30, 2024, and provided a business update for the fourth quarter of 2024. The Company expects to report third quarter financial results and host a conference call with investors on November 14, 2024.

Justin Kenna, CEO of GameSquare stated, "2024 is shaping up to be a transformative year for GameSquare, as we benefit from the strategies underway to drive organic sales growth, complete the integration of our recent acquisitions, and build a profitable organization. Our performance during the third quarter of 2024 demonstrates the progress we are making and the positive momentum underway as we execute against these initiatives."

"Over the past nine months, we have increased the number of customers on retainer, grown our average contract value by 46%, more than tripled the number of UEFN world building campaigns deployed, and achieved record monthly contract wins in August 2024. These trends contributed to strong third quarter revenue, higher gross margin, and a significant improvement in profitability as compared to the second quarter of 2024. We expect to show further improvements in revenue and profitability going forward as our business scales and approaches breakeven," Mr. Kenna continued.

"With the strong performance during the third quarter and year-to-date, we are increasing our annual revenue guidance and now expect annual proforma revenue of $105 million to $110 million for 2024, compared to our prior guidance of $100 million. The progress we are making is encouraging, and I want to thank everyone at GameSquare for their hard work and dedication," concluded Mr. Kenna.

Preliminary 2024 Third Quarter Financial Results

		Q3 2024 (preliminary)
Revenue
Owned and Operated IP		$	9.4 million
Agency + Media		$	15.5 million
SaaS		$	1.6 million
Revenue		$	26.5 million

The Company currently estimates that 2024 third quarter gross margin was approximately 18%, compared to 14.8% for the second quarter of 2024. Third quarter gross margin benefitted from revenue mix, which was partially offset by start-up costs associated with new programs and relationships that are expected to benefit both revenue and profitability in the fourth quarter of 2024. Overall profitability for the third quarter of 2024 benefited from revenue growth and the Company's cost-cutting initiatives. As a result, GameSquare expects adjusted EBITDA to be a loss of approximately $2.4 million, a $3.0 million improvement from an adjusted EBITDA loss of $5.4 million for the second quarter of 2024.

GameSquare Increases 2024 Annual Proforma Guidance

		2024 Nine Months Proforma* Results (preliminary)				2024 Full Year Guidance (proforma*)
Revenue		$	78.6 million			$	105 million - 110 million

*2024's annual guidance is based on a proforma basis and includes a full 12 months of contribution from FaZe Clan, which was acquired on March 7, 2024. Guidance also assumes GameSquare continues to fully consolidate the financial results of FaZe Media, Inc.

Additional 2024 Guidance Includes

$18+ million of cost savings associated with the FaZe Clan acquisition are expected for the 12 months ended December 31, 2024, compared to 12 months ended December 31, 2023

Management anticipates sequential quarterly improvements to profitability throughout 2024, supported by sales growth, gross margin improvement, and the benefit of cost saving initiatives

GameSquare's financial closing procedures for the third quarter ended September 30, 2024, are not yet complete. It is possible that the final results may differ from the preliminary results, and that the Company's fourth quarter and annual 2024 outlook may change from the initial outlook discussed above between now and when results are finalized.