GameSquare Holdings Reports 2025 First Quarter Results ACCESSWIRE 2025-05-15
First quarter 2025 gross margin, excluding FaZe Media of 22.8%
Significant year-over-year improvement in first quarter 2025 adjusted EBITDA
Completed remaining divestiture of FaZe Media on April 1, 2025, which is expected to expand gross margin and eliminate approximately $2.5 million in quarterly cash burn going forward
Improved first quarter profitability in line with expectations and supports GameSquare's strategic focus on achieving positive cash flow and adjusted EBITDA in 2025
FRISCO, TEXAS / ACCESS Newswire / May 15, 2025 / GameSquare Holdings, Inc. (NASDAQ:GAME), ("GameSquare", or the "Company"), today announced financial results for the three-months ended March 31, 2025.
Justin Kenna, CEO of GameSquare, stated, "Our first quarter financial results were in line with expectations and reflect both the final quarter of FaZe Media's impact on profitability and typical seasonal trends within our agency and programmatic advertising businesses. With the April 1, 2025 divestiture of our remaining 25.5% stake in FaZe Media, we eliminated $10 million in convertible debt from our balance sheet and anticipate an improvement in gross margin and reduction of over $2 million in quarterly operating expenses beginning in the second quarter of 2025. We continue to own 100% of FaZe Clan Esports, which contributed to revenue and was accretive to gross margin in the first quarter of 2025. As one of the top global esports teams, we are excited to capitalize on FaZe Clan Esports success and leverage the brand to drive profitable revenue opportunities."
"Our SaaS business segment is well positioned for strong growth in 2025, driven by an expanded managed services offering and the integrated capabilities of the broader GameSquare platform. We are also seeing strong momentum in our creative agency business, particularly from successful world-building campaigns and in-person activations," Mr. Kenna continued.
"As we continue to optimize our operating structure, achieving profitability remains a core objective of our 2025 strategy. In the first quarter, we significantly improved proforma, adjusted EBITDA from the same period a year ago reflecting a significant reduction in operating expenses. We expect to benefit from higher gross margin and additional cost-saving measures throughout the year. Based on the progress made in the first quarter, we believe we are on track to organically grow sales, and improve profitability in 2025 and beyond," concluded Mr. Kenna.
Three months ended March 31, 2025, compared to March 31, 2024
Revenue of $21.1 million, compared to $17.7 million
Gross profit of $3.3 million, compared to $3.4 million
Net loss attributable to GameSquare of $5.2 million, compared to a net loss of $5.3 million
Adjusted EBITDA loss of $3.4 million, compared to a loss of $4.1 million
Adjusted EBITDA loss was 16.1% of revenue, versus 23.3% of revenue last year
Reported results for the three months ended March 31, 2025, compared to proforma* results for the three months ended March 31, 2024
Revenue of $21.1 million, compared to $23.5 million
Gross profit of $3.3 million, compared to $3.7 million
Operating expenses of $8.6 million, or 40.7% of revenue, compared to $11.6 million or 49.3% of revenue last year
Adjusted EBITDA loss of $3.4 million, compared to a loss of $7.9 million last year
Adjusted EBITDA loss was 16.1% of revenue, versus 33.7% of revenue last year
* Proforma financial results for the three months ended March 31, 2024, removes Complexity from GameSquare's financial statements and includes a full quarter contribution of FaZe Clan
2025 Annual Guidance
Annual proforma revenue in 2025 between $100 million to $105 million
Annual gross margin of approximately 20% to 25% benefiting from a more profitable mix of revenue and the April 1, 2025, FaZe Media divestiture
GameSquare expects annual cash operating expenses in 2025 to improve by approximately $15 million from cash operating expenses in 2024 of $35 million, as a result the FaZe Media divestiture and a continual focus on reducing operating expenses and driving efficiencies
EBITDA and cash flow to improve throughout 2025 with positive EBITDA and cash flow in the second half of 2025
Conference Call Details
Justin Kenna, CEO, Lou Schwartz, President, and Mike Munoz CFO are scheduled to host a conference call with the investment community. Analysts and interested investors can join the call via the details below:
Corporate Contact Lou Schwartz, President Phone: (216) 464-6400 Email: ir@gamesquare.com
Investor Relations Andrew Berger Phone: (216) 464-6400 Email: ir@gamesquare.com
Media Relations Chelsey Northern / The Untold Phone: (254) 855-4028 Email: pr@gamesquare.com
About GameSquare Holdings, Inc.
GameSquare's (NASDAQ:GAME) mission is to revolutionize the way brands and game publishers connect with hard-to-reach Gen Z, Gen Alpha, and Millennial audiences. Our next generation media, entertainment, and technology capabilities drive compelling outcomes for creators and maximize our brand partners' return on investment. Through our purpose-built platform, we provide award winning marketing and creative services, offer leading data and analytics solutions, and amplify awareness through FaZe Clan Esports, one of the most prominent and influential gaming organizations in the world. With one of the largest gaming media networks in North America, as verified by Comscore, we are reshaping the landscape of digital media and immersive entertainment. GameSquare's largest investors are Dallas Cowboys owner Jerry Jones and the Goff family.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the Company's and FaZe Media's future performance, revenue, growth and profitability; and the Company's and FaZe Media's ability to execute their business plans. These forward-looking statements are provided only to provide information currently available to us and are not intended to serve as and must not be relied on by any investor as, a guarantee, assurance or definitive statement of fact or probability. Forward-looking statements are necessarily based upon a number of estimates and assumptions which include, but are not limited to: the Company's and FaZe Media's ability to grow their business and being able to execute on their business plans, the Company being able to complete and successfully integrate acquisitions, the Company being able to recognize and capitalize on opportunities and the Company continuing to attract qualified personnel to supports its development requirements. These assumptions, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the Company's ability to achieve its objectives, the Company successfully executing its growth strategy, the ability of the Company to obtain future financings or complete offerings on acceptable terms, failure to leverage the Company's portfolio across entertainment and media platforms, dependence on the Company's key personnel and general business, economic, competitive, political and social uncertainties. These risk factors are not intended to represent a complete list of the factors that could affect the Company which are discussed in the Company's most recent MD&A. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
GameSquare Holdings, Inc. Consolidated Balance Sheets (Unaudited)
March 31 2025
December 31, 2024
Assets
Cash
$
4,675,226
$
12,094,950
Restricted cash
1,137,735
1,054,030
Accounts receivable, net
18,305,786
21,330,847
Government remittances
150,529
119,721
Promissory note receivable, current
475,994
379,405
Prepaid expenses and other current assets
1,060,982
1,493,619
Total current assets
25,806,252
36,472,572
Investment
2,199,909
2,199,909
Promissory note receivable
9,307,979
9,212,785
Property and equipment, net
266,548
303,950
Goodwill
12,704,979
12,704,979
Intangible assets, net
15,099,765
15,265,736
Right-of-use assets
2,394,432
2,570,516
Total assets
$
67,779,864
$
78,730,447
Liabilities and Shareholders' Equity
Accounts payable
$
23,559,503
$
27,349,372
Accrued expenses and other current liabilities
10,647,154
13,694,179
Players liability account
47,535
47,535
Deferred revenue
2,734,063
2,726,121
Current portion of operating lease liability
756,524
748,916
Line of credit
2,851,175
3,501,457
Promissory note payable, current
2,786,083
-
Convertible debt carried at fair value
1,641,954
6,481,704
Warrant liability
8,991
14,314
Arbitration reserve
143,791
199,374
Total current liabilities
45,176,773
54,762,972
Convertible debt carried at fair value
10,217,808
9,908,784
Operating lease liability
1,871,009
2,054,443
Total liabilities
57,265,590
66,726,199
Commitments and contingencies (Note 14)
Preferred stock (no par value, unlimited shares authorized, zero shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)
-
-
Common stock (no par value, unlimited shares authorized, 38,825,619 and 32,635,995 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)
-
-
Additional paid-in capital
124,962,870
119,441,634
Accumulated other comprehensive loss
(46,091
)
(208,617
)
Non-controlling interest
12,924,155
14,942,287
Accumulated deficit
(127,326,660
)
(122,171,056
)
Total shareholders' equity
10,514,274
12,004,248
Total liabilities and shareholders' equity
$
67,779,864
$
78,730,447
GameSquare Holdings, Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
Three months ended March 31,
2025
2024
Revenue
$
21,109,659
$
17,728,224
Cost of revenue
17,776,605
14,335,067
Gross profit
3,333,054
3,393,157
Operating expenses:
General and administrative
5,757,613
4,918,630
Selling and marketing
2,023,375
2,221,653
Research and development
768,966
685,153
Depreciation and amortization
581,795
755,449
Restructuring charges
577,871
-
Impairment expense
-
-
Other operating expenses
745,377
1,093,420
Total operating expenses
10,454,997
9,674,305
Loss from continuing operations
(7,121,943
)
(6,281,148
)
Other income (expense), net:
Interest expense
(49,558
)
(435,128
)
Loss on debt extinguishment
-
-
Change in fair value of convertible debt carried at fair value
333,477
(106,601
)
Change in fair value of investment
-
-
Change in fair value of warrant liability
5,347
37,257
Arbitration settlement reserve
55,583
95,125
Other income (expense), net
(73,780
)
(117,270
)
Total other income (expense), net
271,069
(526,617
)
Loss from continuing operations before income taxes
