Allied Gaming & Entertainment Inc (AGAE) 2023 Q3 法說會逐字稿

Good afternoon. And welcome to the Allied Gaming & Entertainment Inc. third quarter 2023 earnings conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Tyler Drew of ADDO Investor Relations. Please go ahead.

午安.歡迎參加 Allied Gaming & Entertainment Inc. 2023 年第三季財報電話會議。 （操作員說明）請注意此事件正在被記錄。我現在想將會議轉交給 ADDO 投資者關係部的泰勒德魯 (Tyler Drew)。請繼續。

Thank you, operator. Good afternoon. And welcome to the Allied Gaming & Entertainment 2023 third quarter earnings conference call. Speaking on the call today are Allied Gaming & Entertainment's Chief Executive Officer, Yinghua Chen, and Chief Financial Officer, Roy Anderson.

謝謝你，接線生。午安.歡迎參加 Allied Gaming & Entertainment 2023 年第三季財報電話會議。今天在電話會議上發言的是 Allied Gaming & Entertainment 執行長陳英華和財務長羅伊安德森。

Before I turn the call over to management, please note that our prepared remarks may contain forward-looking statements. Words such as may, will, expect, intend, plan, believe, seek, could, estimate, judgment, targeting, should, anticipate, goal, and variations of these words and similar expressions are intended to identify as forward-looking statements. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors discussed in the company's public filings, including the risk factors discussed in documents filed with the Securities and Exchange Commission.

在我將電話轉交給管理階層之前，請注意，我們準備的言論可能包含前瞻性陳述。諸如「可能」、「將」、「期望」、「打算」、「計畫」、「相信」、「尋求」、「能夠」、「估計」、「判斷」、「目標」、「應該」、「預期」、「目標」等詞語以及這些詞語的變體和類似表達方式旨在識別為前瞻性陳述。由於公司公開文件中討論的各種因素，包括向美國證券交易委員會提交的文件中討論的風險因素，實際結果可能與此類前瞻性陳述所暗示的結果有重大差異。

Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that expectations will be attained. The company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.

儘管該公司認為此類前瞻性陳述中反映的預期是基於合理的假設，但它不能保證預期能夠實現。本公司不承擔因新資訊、未來事件或其他原因而更新任何前瞻性陳述的義務。

In addition, certain of the financial information presented in this call represents non-GAAP financial measures. The company's earnings release, which was issued this afternoon and is available on the company's website, presents definitions of such non-GAAP financial measures, reconciliations to the appropriate GAAP measures, and an explanation of why the company believes such non-GAAP financial measures are useful to investors. And with that, it is now my pleasure to turn the call over to Allied Gaming & Entertainment CEO, Yinghua Chen.

此外，本次電話會議中提供的某些財務資訊代表非公認會計準則財務指標。該公司今天下午發布的收益報告可在公司網站上查閱，其中介紹了此類非 GAAP 財務指標的定義、與適當 GAAP 指標的調節，並解釋了為什麼該公司認為此類非 GAAP 財務指標是對投資者有用。現在，我很高興將電話轉給 Allied Gaming & Entertainment 執行長陳英華。

Thank you, Tyler. And thank you all for joining us this afternoon as we share our exciting developments from the past quarter. We're committed to executing our strategic plan to focus on our growth in the rounds of e-sports, gaming, and entertainment.

謝謝你，泰勒。感謝大家今天下午加入我們，與我們分享上個季度令人興奮的進展。我們致力於執行我們的策略計劃，專注於我們在電子競技、遊戲和娛樂領域的成長。

Beginning with our financial performance in Q3, we've achieved a significant milestone by reporting positive net income. This accomplishment reflects our relentless effort to enhance operational efficiency and reduce expenses in anticipation of robust revenue growth in 2024.

從第三季的財務表現開始，我們透過報告正淨利實現了一個重要的里程碑。這項成就反映了我們為提高營運效率和減少開支所做的不懈努力，以期實現 2024 年收入的強勁成長。

Our unwavering commitment to improving profitability remains steadfast despite the challenges we faced in Q3, particularly in the form of a 28% decrease in revenues, largely due to a decrease of live events, reflecting the impact of economic uncertainty. Our dedication to streamlining our general and administrative expenses resulted in a remarkable reduction of over 50% in Q3. This accomplishment not only improved our net income, but also bolstered our adjusted EBITDA results, setting us on a path to manage and grow our business at this lower expense level.

儘管我們在第三季度面臨挑戰，特別是收入下降 28%，這主要是由於現場活動的減少，反映了經濟不確定性的影響，但我們對提高盈利能力的堅定承諾仍然堅定不移。我們致力於精簡一般和行政費用，第三季大幅減少了 50% 以上。這項成就不僅提高了我們的淨利潤，還提高了我們調整後的 EBITDA 業績，使我們走上了以較低費用水平管理和發展業務的道路。

During the quarter, our subsidiary, Allied Esports International, AEI, provided its audiences with more world-class experiences at both its hybrid arena and home and mobile arena. We produced a total of 79 event days during Q3, comprising 44 proprietary even days and 35 third party event days.

本季度，我們的子公司 Allied Esports International (AEI) 在混合競技場以及家庭和移動競技場上為觀眾提供了更多世界級的體驗。第三季度，我們總共舉辦了 79 個活動日，其中包括 44 個專有偶數日和 35 個第三方活動日。

Notable events at HyperX Arena included Boxing Week and reception, a dynamic and fun gaming event honoring boxing legends such as Mike Tyson and Evander Holyfield; a Red Bull and Riot Games event showcasing brand new gameplay from Riot's upcoming title, Project L, for the first time during the most attended Evolution Championship Series 2023 tournament in the history; Hacker1, a five-day hackathon event and an industry event by Cox Communications to discuss their leading connectivity capabilities. In September, we also hosted the UNLV Hockey Annual Giving Day, a fundraising event in partnership with UNLV, utilizing our Omen Mobile Arena, forging a stronger connection with our local communities.

HyperX Arena 的著名活動包括拳擊週和招待會，這是一項充滿活力且有趣的遊戲活動，旨在紀念邁克泰森(Mike Tyson) 和伊万德霍利菲爾德(Evander Holyfield) 等拳擊傳奇人物； Red Bull 和 Riot Games 舉辦的活動在歷史上參與人數最多的 2023 年進化錦標賽系列賽中首次展示了 Riot 即將推出的遊戲 Project L 的全新遊戲玩法； Hacker1 是 Cox Communications 舉辦的為期五天的黑客馬拉鬆活動和行業活動，旨在討論其領先的連接功能。 9 月，我們還與 UNLV 合作舉辦了 UNLV 曲棍球年度捐贈日活動，利用我們的 Omen Mobile Arena 舉辦籌款活動，與當地社區建立更緊密的聯繫。

Our Omen Mobile arena was also active during the quarter with events including the NHL draft and three UNLV college football games at Allegiant Stadium in Paradise, Nevada. In recognition of our contribution, we're deeply honored that the Clark County Commission officially declared October 14 as Allied Esports Day in Clark County. We're excited about the awareness this brings and look forward to providing even more memorable experiences to our audiences.

我們的 Omen Mobile 體育場在本季度也很活躍，舉辦的活動包括 NHL 選秀以及在內華達州天堂​​ Allegiant 體育場舉行的三場 UNLV 大學橄欖球比賽。為了表彰我們的貢獻，克拉克縣委員會正式宣布 10 月 14 日為克拉克縣聯盟電競日，我們深感榮幸。我們對這帶來的意識感到興奮，並期待為我們的觀眾提供更難忘的體驗。

Turning to our partnership with HyperX, recently we rolled out a new set of HP OMEN PCs and monitors to retrofit and update the gaming zones within the hybrid arena. The arena, which is considered the world's most recognized venue and production facility for e-sports, is entirely outfitted with state-of-the-art equipment.

談到我們與 HyperX 的合作關係，最近我們推出了一套新的 HP OMEN 電腦和顯示器，以改造和更新混合競技場中的遊戲區域。該場館被認為是世界上最受認可的電子競技場館和製作設施，完全配備了最先進的設備。

In conjunction with in-person live events, we're currently in production on our original content series, WANNABE Season 2, which will be available on the YES App. After generating strong viewership numbers during Season 1, we expect to release Season 2 in the spring. We're focused on incorporating more of the most well-known New York Yankee players together with top ranking pro gamers into the show to increase its reach.

結合現場現場活動，我們目前正在製作原創內容系列《WANNABE 第 2 季》，該系列將在 YES 應用程式上提供。在第一季產生了強勁的收視率後，我們預計第二季將在春季上映。我們致力於將更多最著名的紐約洋基隊球員以及頂級職業玩家納入該節目，以擴大其影響力。

Furthermore, we're actively engaging with potential partners to create new and engaging content series for our viewers, similar to WANNABE and ELEVATED show. Stay tuned for more details of this partnership involved.

此外，我們正在積極與潛在合作夥伴合作，為觀眾創造新的、引人入勝的內容系列，類似於 WANNABE 和 ELEVATED 節目。請繼續關注此次合作的更多細節。

Let's turn to our Allied Mobile Entertainment subsidiary or AME, which is dedicated to exploring opportunities in the massive and growing mobile games market. Subsequent to the end of the quarter, on October 31, 2023, we closed on the previously announced strategic investment in Beijing Lianzhong Zhihe Technology Co. or Zhihe, a prominent mobile games developer and operator. We are delighted to finalize this strategic investment, establishing AGAE as the majority shareholder in Zhihe, while also assuming a controlling interest in the Board.

讓我們看看我們的 Allied Mobile Entertainment 子公司（AME），該公司致力於在龐大且不斷成長的手機遊戲市場中探索機會。本季末後，即 2023 年 10 月 31 日，我們完成了先前宣布的對北京聯眾智和科技有限公司（簡稱「智和」）的戰略投資，該公司是一家著名的手機遊戲開發商和營運商。我們很高興完成這項策略投資，使 AGAE 成為智和的大股東，同時也擁有董事會的控股權。

This move reinforces our presence in the highly lucrative mobile games market and strengthens our position to grow within the global games industry. Zhihe has demonstrated impressive results in just 18 months in operation. And we expect this investment will be immediately accretive to our top and bottom line while bringing valuable digital IP into the Allied ecosystem.

此舉鞏固了我們在利潤豐厚的手機遊戲市場的地位，並鞏固了我們在全球遊戲產業的發展地位。智和在短短18個月的營運中就取得了令人矚目的成績。我們預計這項投資將立即增加我們的營收和利潤，同時為 Allied 生態系統帶來有價值的數位智慧財產權。

We also continue to make progress within our Allied Experiential Entertainment subsidiary or AEE, which focuses on organizing general entertainment live events, experiential entertainment venue operation management and consultation. We're actively exploring opportunities to co-organize partner events in Macau.

我們的聯合體驗娛樂子公司（AEE）也不斷取得進展，該子公司專注於組織一般娛樂現場活動、體驗式娛樂場所營運管理和諮詢。我們正積極探索在澳門共同舉辦合作夥伴活動的機會。

Recently, Macau has made a substantive effort to diversify its economy and generate more non-gambling revenue in the area. As such, casino operators have pledged billions of dollars in investment over the next decade. We plan to use our events and content expertise to assist some of the casino operators in providing more non-gaming entertainment options to their customers and expanding the revenue stream in a similar manner to Las Vegas.

最近，澳門為實現經濟多元化並在該地區創造更多非博彩收入做出了實質努力。因此，賭場營運商已承諾在未來十年內投資數十億美元。我們計劃利用我們的活動和內容專業知識來協助一些賭場營運商為其客戶提供更多非遊戲娛樂選擇，並以與拉斯維加斯類似的方式擴大收入來源。

As discussions are finalized, we will update the market with additional details. We also continue to believe our stock is undervalued and have now repurchased approximately $2.7 million of AGE stock between the announcement of the plan in November 2022 and the end of Q3. And with that I'd like to turn the call now to our CFO, Roy Anderson, to provide updates on our Q3 financials.

討論結束後，我們將向市場通報更多細節。我們也仍然認為我們的股票被低估，目前在 2022 年 11 月宣布該計劃到第三季末期間回購了約 270 萬美元的 AGE 股票。現在，我想將電話轉給我們的財務長羅伊·安德森，以提供有關我們第三季財務狀況的最新資訊。

Thank you, Yinghua. And good afternoon, all. From a profit perspective, our third quarter revenues of $1.1 million were down 28% from the prior year period. As Yinghua alluded to, the year over year revenue decrease was primarily due to a decline in third party in-person events at our HyperX Arena in Las Vegas.

謝謝你，英華。大家下午好。從利潤角度來看，我們第三季的營收為 110 萬美元，比去年同期下降了 28%。正如英華所提到的，收入同​​比下降主要是由於拉斯維加斯 HyperX Arena 的第三方現場活動減少。

Total costs and expenses from the third quarter of 2023 were $1.8 million, a decrease of 46% compared to the third quarter of 2022. The decrease was driven by a strategic reduction in our G&A expenses of 63% and a 48% decrease in our in-person expenses relating to the decline in third party events held during the quarter, along with certain operating efficiencies we have implemented in our in-person events segment.

2023 年第三季的總成本和費用為180 萬美元，比2022 年第三季下降46%。這一下降是由於我們的G&A 費用策略性削減了63%，以及我們的業務支出下降了48% 。- 與本季舉辦的第三方活動減少相關的人員費用，以及我們在現場活動部門實施的某些營運效率。

The 63% reduction in G&A includes cash compensation, stock-based compensation, and the recognition of employee retention credit refunds under the 2020 CARES and subsequent acts. These decreases were partially offset by an increase in depreciation and amortization expenses, acquisition-related professional fees, and consulting fees incurred in connection with other strategic investment opportunities.

G&A 減少 63% 包括現金薪酬、股票薪酬以及根據 2020 年 CARES 及後續法案確認的員工保留信用退款。這些減少被折舊和攤銷費用、收購相關專業費用以及與其他策略投資機會相關的諮詢費用的增加部分抵消。

Net income for the third quarter of 2023 improved significantly to $0.1 million compared to a net loss of $1.6 million in the prior year period. Our results for Q3 2023 included approximately $716,000 of interest income earned on short-term investments.

2023 年第三季的淨利潤大幅改善至 10 萬美元，而去年同期淨虧損為 160 萬美元。我們 2023 年第三季的業績包括短期投資賺取的約 716,000 美元的利息收入。

Our adjusted EBITDA loss was $0.2 million in the third quarter of 2023, a considerable improvement from a loss of $1.8 million in Q3 2022. Our adjusted EBITDA includes adjustments for depreciation, amortization, business acquisition transaction cost, stock-based compensation, and interest income.

2023 年第三季度，我們調整後的EBITDA 虧損為20 萬美元，比2022 年第三季的180 萬美元虧損有了很大改善。我們調整後的EBITDA 包括折舊、攤提、業務收購交易成本、股票薪酬和利息收入的調整。

Now moving on to our balance sheet, as of September 30, 2023, our cash and short-term investments position totaled $77.4 million, including $5 million of restricted cash compared to $86.8 million at December 31, 2022, which also included $5 million of restricted cash. As of September 30, 2023, the company's working capital position was very strong at $73.9 million, including the current portion of an operating lease liability of $1.4 million that was recorded in connection with the implementation of the new leasing standard, ASC 842, on December 31, 2022.

現在轉到我們的資產負債表，截至2023 年9 月30 日，我們的現金和短期投資頭寸總計7,740 萬美元，其中包括500 萬美元的限制性現金，而截至2022 年12 月31 日為8,680 萬美元，其中還包括500 萬美元的限制性現金現金。截至 2023 年 9 月 30 日，該公司的營運資本狀況非常強勁，為 7,390 萬美元，其中包括與 12 月實施新租賃標準 ASC 842 相關的 140 萬美元經營租賃負債的流動部分2022 年 31 日。

Also during the quarter and under our stock repurchase program, we acquired 183,021 shares of our common stock in open market transactions at an average selling price of $0.98 for a total repurchase cost of $171,355, excluding broker fees. This brings us to $2.7 million in aggregate repurchases of our common stock since the commencement of the plan.

此外，在本季度，根據我們的股票回購計劃，我們在公開市場交易中以 0.98 美元的平均售價購買了 183,021 股普通股，總回購成本為 171,355 美元（不包括經紀人費用）。自該計劃開始以來，我們的普通股回購總額達到 270 萬美元。

Moving forward, the manner of timing and amount of any purchases will continue to be based on the evaluation of market conditions, stock price, and other factors. I will now turn the call back over to Yinghua for closing remarks.

展望未來，任何購買的時間和金額將繼續基於對市場狀況、股價和其他因素的評估。現在我將把電話轉回英華做總結發言。

Thank you, Roy. In summary, we remain excited about the growth prospects ahead of Allied Gaming & Entertainment. We have done significant work in the background, which we believe has built a strong foundation and, along with our recently closed investment in Zhihe, will soon become more evident in our financial results. We look forward to providing you with additional updates on our progress when we release our fourth quarter and full year 2023 results in March. Thank you.

謝謝你，羅伊。總之，我們對 Allied Gaming & Entertainment 的成長前景仍然感到興奮。我們在後台做了重要的工作，我們相信這些工作已經奠定了堅實的基礎，加上我們最近完成的對致合的投資，很快就會在我們的財務表現中體現得更加明顯。我們期待在 3 月發布第四季和 2023 年全年業績時向您提供有關我們進展的更多最新資訊。謝謝。

The conference has now concluded. Thank you for attending today's presentation. And you may now this correct.

會議現已結束。感謝您參加今天的演講。現在你可能這是正確的。