Esports Entertainment Group (EEG) Inc has published its financial results for the fourth quarter and the 2021 fiscal year, ending June 30, announcing Q4 net revenue is up by 63% over Q3, and $16.8m revenue generated for the fiscal year.
EEG declared a Q4 net revenue of $8.8m, up $8.8m on Q4 2020 and a 63% improvement compared to Q3 ($5.4m). Its gross profit came in at $5.2m, up $5.2m over the same period last year and up 69% over the previous quarter ($3.1m).
The operator’s gross margin as a percentage of net sales was 59% (Q3 2021: 57%), reporting sales and marketing expenses of $5.1m (Q4 2020: $0.3m, Q3 2021: $2.4m), and general and administrative expenses of $10.5m (Q4 2020: $1.8m, Q3 2021: $6.3m).
EEG reported an operating loss of $10.5m during the quarter (Q4 2020: $2.1m loss, Q3 2021: $5.6m loss) a GAAP net loss of $4.8m or ($2.80) per basic common share (Q4 2020: net gain of $1.9m or $2.09 per basic common share, Q3 2021: net loss of $12.4m or ($0.73) per share), and a Non-GAAP adjusted EBITDA of ($5.5m) (Q4 2020: ($0.9m), Q3 2021: adjusted EBITDA of $2.1m).
For FY2021, EEG published a net revenue of $16.8m, up $16.8m over FY2020, and a gross profit of $8.9m, an $8.9m improvement over the previous fiscal year. Its gross margin as a percentage of net sales was 53%.
The operator’s sales and marketing expenses came in at $10m, up $9.7m over FY2020, while general and administrative expenses were $24.6m, $3.7m higher than the previous year.
EEG reported an operating loss of $25.7m for FY2021, $21.7m higher than FY2020, a GAAP net loss of $26.4m or $1.68 per basic common share (FY2020: net loss of $10.4m or $1.50 per share), and a Non-GAAP adjusted EBITDA of ($14m) (FY2020: adjusted EBITDA of ($2.3m)). Its stockholders’ equity increased $63.4m to $74.8m at the end of the fiscal year, up from $11.4m at the end of the previous year.
EEG expects its net revenue to increase by at least 490% to $100m-$105m in FY22 thanks to the multiple acquisitions completed in 2021.
CEO Grant Johnson commented: “The formidable foundation we built since our 2020 IPO drove strong performance in the fourth quarter and sets the stage for achieving significant growth in FY22. Based on a new record single-day performance of our igaming division in late September, I am extremely confident in our ability to hit our guidance target.”
Throughout the year, EEG has sealed many partnerships with professional sports teams, becoming the official tournament sponsor for the Cleveland Cavaliers, New York Rangers, Indianapolis Colts, Tampa Bay Buccaneers, Los Angeles Chargers, and LAFC.
The operator also signed a partnership agreement with Game Fund Partners LLC to become a part of its venture capital arm and a new planned $300m game fund.
Johnson added: “The partnerships we have formed, from top professional sports teams to industry-leading esports and gaming companies, clearly demonstrate the strength of our expansive product and service portfolio, and I believe our future is very bright as we continue to execute on our rapid expansion strategy driven by the solidification of our market position and the ongoing growth of our unique assets.”