Allied Esports Entertainment, Inc., on Tuesday unveiled its financial results for the third quarter, a three-month period ending September 30.
The California-based company noted it completed the sale of its subsidiaries comprising the World Poker Tour to Element Partners, LLC on July 12 for $105m. Therefore, its Q3 results exclude the World Poker Tour, which is classified as discontinued operations.
Allied Esports generated total revenue of $1.7m in the third quarter of 2021, an increase of 182% compared to Q3 2020. The company said the rise was driven by increased foot traffic at the Company’s HyperX Esports Arena Las Vegas due to the increased number of events and loosened restrictions of operating hours and social distancing measures.
In addition, officials said revenue was driven by what they termed “continued encouraging results” from the company’s push into its Multiplatform Content pillar of the business.
Total costs and expenses for the recently concluded quarter were $5.6m, an increase of 27% compared to the same quarter last year. The increase was attributed primarily to higher expenses in the In-person pillar and selling and marketing expenses due to the recovery of live in-person events.
General and administrative expenses also increased primarily due to severance accrual for the company’s former CEO, along with additional compensation, including the normalization of salaries in 2021 as compared to the temporary salary reductions in the third quarter of 2020 in response to the COVID pandemic.
Net income for the quarter was $74.3m, compared to a net loss of $6.5m in the prior year period. The improvement was primarily driven by the gain on the sale of WPT.
Adjusted EBITDA loss was $3m for Q3 2021, compared to a loss of $2.4m in the third quarter of 2020.
“The third quarter was a very productive period for AESE, highlighted by a strong quarter of growth from our Esports business,” CEO Libing (Claire) Wu said in a statement. “During the quarter, total revenue more than doubled from the prior quarter and increased more than 182% compared to the third quarter last year. This growth was driven by a sharp recovery of the In-person pillar of our Esports business with the US economy almost fully re-opened, coupled with a steady climb in Las Vegas foot traffic and the return of live entertainment events.”
According to Wu, game publishers, who were the company’s largest customers prior to the pandemic, have not yet resumed In-person events. She said they could provide an additional boost to AESE’s In-person pillar when they resume normal activities.
During the third quarter Allied Esports also generated “solid” revenue contributions from its Multiplatform Content pillar, Wu noted, adding the company continues to “make strides” toward monetizing its growing content library with key streaming partners as well as building out its production services capabilities through AE Studios.
“Importantly, during the quarter, we significantly improved our liquidity position with the sale of WPT to Element Partners in an all-cash transaction for $105 million,” Wu added. “Since the completion of the WPT transaction this summer, we have made good headway in evaluating opportunities to invest our cash and exploring strategic alternatives for our Esports business as we look to maximize value for AESE shareholders.”