Allied Esports Entertainment posts $62.9m in net income in 2021
End of pandemic restrictions brings return to live events.
Allied Esports Entertainment (AESE), a global esports entertainment company, unveiled its financial results for the fourth quarter and fiscal year ended December 31, 2021.
The company distinguished between “continuing” and “discontinued” operations due to the sale of the AESE’s subsidiaries owning and operating its poker-related business, the World Poker Tour, on July 12, 2021.
In the fourth quarter of 2021, the company posted total revenue of $1.9m, an increase of 108% compared to the fourth quarter of 2020.
AESE attributed the rise in revenue to increased foot traffic at the company’s HyperX Arena Las Vegas due to the increased number of events, as well as what it termed “encouraging” results from its Multiplatform Content pillar.
Total costs and expenses for Q4 2021 were $5.7m, a decrease of 64% compared to the fourth quarter of 2020.
Officials said costs and expenses decreased primarily due to the impairment of investments and property and equipment that were charged to operations in the prior year period. The decrease was somewhat offset by an increase in in-person expenses due to the recovery of live in-person events, they noted.
In the fourth quarter of 2021 the company posted a net loss of $6.3m, compared to a net loss of $18.9m in the prior year period.
Adjusted EBITDA loss was $2.1m for the fourth quarter of 2021, compared to a loss of $7.8m in Q4 2020.
Full year 2021 financial results
Total revenue for 2021 was $5.0m, an increase of 54% compared to $3.2m in 2020.
As with the Q4 revenue increase, the company said full year revenue improvement was driven by the increased foot traffic at HyperX Arena Las Vegas due to the increased number of events and the end of capacity COVID-19 pandemic-related restrictions and social distancing measures, as well as “encouraging” results from the Multiplatform Content pillar of the business.
Total costs and expenses in 2021 were $20.7m, a decrease of 41% compared to 2020.
Costs and expenses decreased primarily due to the aforementioned impairment of investments and property and equipment that were charged to operations in the prior year period.
Net income was $62.9m in 2021, compared to a net loss of $45.1m in 2020.
The improvement was primarily driven by the gain on the sale of the WPT during the third quarter of 2021, officials said.
Adjusted EBITDA loss was $11.1m in 2021, compared to a loss of $21.7m in 2020.
“As our Esports operations continue to recover from the effects of the COVID-19 pandemic, our process to explore strategic alternatives for the business is gaining traction and we are in active discussions with several interested parties,” Lyle Berman, AESE’s Interim CEO, said in a statement. “We ended the year with a cash position of nearly $98m, including restricted cash, and we are continuing to identify opportunities to invest this cash to acquire or merge with an existing business, along with any cash from any sale of the Esports business.”
Berman said over the past several months, the company has reviewed the merits of “a number” of potential target investment opportunities with its financial and legal advisors.
“Our due diligence and the continued sourcing of other opportunities remains ongoing,” he declared. “We continue to work with a sense of urgency in these efforts and we are very focused on finding the absolute best opportunity available to maximize value for our shareholders.”
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