Allied Gaming & Entertainment Inc. (NASDAQ:AGAE) Q3 2023 Earnings Call Transcript

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Roy Anderson: Thank you, Yinghua Chen. From a profitability 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. Total cost and expenses for 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. 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. 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 include approximately $716,000 of interest income earned on short-term investments. 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 costs, stock-based compensation and interest income.

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. 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 the $2.7 million in aggregate repurchases of our common stock since the commencement of the plan. Moving forward, the manner, 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.

Yinghua Chen: 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 2020 results in March. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation, and you may now disconnect.

End of Q&A:

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