Enthusiast Gaming Holdings Inc.

Greetings and welcome to the Enthusiast Gaming Holdings Incorporated first quarter fiscal 2021 financial results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Eric Bernofsky, Chief Corporate Officer. Thank you, Eric. You may begin.

Thank you, Operator. Good afternoon, everyone, and welcome to Enthusiast Gaming's first quarter 2021 earnings call. I'm joined by Adrian Montgomery, our Chief Executive Officer, Alex McDonald, our Chief Financial Officer, and Thumba Tharmalingam, our Chief Operating Officer. We'll begin with commentary on the quarter before opening the floor to questions from analysts. Before we begin, I'd like to remind everyone that today's presentation contains forward-looking information that involves known and unknown risks, uncertainties, and other factors that could cause actual events to differ materially from current expectations. These statements should not be read as assurances of future performance or results. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. A more complete discussion of the risks and uncertainties facing the company appear in the company's management discussion analysis for the three-month period ending March 31, 2021, which are available under the company's profiles on CDAR and EDGAR, as well as on the company's website. Your caution not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. The company disclaims any intention or obligation, except to the extent required by law, to update and revise any forward-looking statements as a result of new information, future events, or for any other reason. Now I will turn the call over to Adrian Montgomery, CEO of Enthusiast Gaming. Adrian.

Thank you, Eric. Good afternoon and welcome to our first quarter 2021 financial earnings call and the first such call since the completion of our NASDAQ listing last month. Before we begin, I would just like to publicly recognize the outstanding contributions of our hardworking enthusiast gaming staff all over the world that wake up every day and give it their all in making our company better, despite the still very difficult challenges of COVID and the impact that that has and has continued to have on their individual lives. To each and every one of you out there in enthusiast land, I say thank you. I am pleased to report that Q1 revenue grew by more than 320% to $30 million from $7 million in Q1 last year, fueled both by our focused acquisition strategy as well as gains in direct sales, which grew to $2.2 million in the quarter from just $60,000 at this time last year, and subscription revenue led by growth in the number of paid subscribers by 49%. Alex will share more details about our financial performance later in the call. Our proprietary flywheel strategy that underpins our organic growth is working. The strategy that we deployed in the market in 2020 and discussed in detail on the 2020 year-end financial results conference is gaining traction in the market every single day. This flywheel that consists of a more diversified set of revenue streams including more direct-to-brand advertising and sponsorship sales, more paid subscriptions, more content licensing and distribution, are all performing within or ahead of our expectations. On direct sales, we continue to see a very active pipeline and we are winning deals at an increasing rate as the business scales. On our last conference call in March, I mentioned that we had nearly passed direct sales bookings in less than three months of 2021 compared to all of 2020. In the first quarter, we recognized $2.2 million in direct sales, while the overall mix of direct sales to programmatic remained relatively constant despite the seasonably weaker periods. One of the deals we highlighted back in March was our integrated content and sponsorship deal that we signed with TikTok to help them drive adoption and bridge the integration of TikTok within the gaming and esports industry. Let me take a moment to explain why this deal is so transformational. Last November, we incubated a concept, Gamers' Greatest Talent, at our EGLX event online. Our creative teams took that proof of concept and developed the idea into a six-episode series and went to market looking for partners. TikTok signed on, and later, so did e.l.f. Cosmetics. Two weeks ago, we sent out a call for auditions for Gamers' Greatest Talent with the hashtag TikTokGGT, which, as of today... has been seen almost 12 billion times on TikTok. Last Sunday, we premiered Gamer's Greatest Talent with Luminosity judges and our very own Corey Mandel as host of the program. We had incredible audience numbers and we're looking forward to episode two this coming Sunday. I should also point out that from that germination of an idea in November, to 12 billion impressions, to episode two, to partnerships with TikTok and Elf Cosmetics, we're already planning additional seasons for this new franchise, which we own. Another unique activation we did subsequent to the quarter was our coming out party in Hollywood. And it was for the launch of the Guy Ritchie movie, Wrath of Man, starring Jason Statham. We created an athletes versus gamers content activation, featuring NFL stars Richard Sherman and Darius Slay, along with new Luminosity member and NBA star Carl Anthony Towns, taking on some of Luminosity's pro gamers in Call of Duty Warzone. This is a significant breakthrough for us in that we are bridging the gap between Hollywood Studios and the Gen Z audience, just like we did last year with the Biden presidential campaign. We are very excited about the entertainment category and in particular Hollywood films as being a growing direct advertiser as the movie industry gets back on track. It's for these examples above as well as others in the pipeline that we expect direct sales to continue to increase both in the aggregate and as a percentage of total media revenue in each subsequent quarter of 2021. One of our most exciting growth opportunities as a business is in the area of subscription. To that end, this morning, we announced plans for a unifying, pan-enthusiast social network with a premium subscription opportunity for our target Gen Z and millennial audiences, codenamed Project GG. As this audience continues to move away from traditional social networks and turns to gaming as an alternative, Project GG addresses these trends and will allow gamers to register their unique gaming profiles, compare stats, develop meaningful connections, and share content and ideas. To facilitate the development of Project GG, we also announced that we have entered into a definitive agreement to acquire Tabwire for $11 million USD in cash and stock. Tabwire marks an important milestone for Enthusiast Gaming as we look to bring Project GG to market later this year. Tabwire is a technology and data platform that enables gamers by way of a registered user profile to track their player and game stats. It has already registered more than 13 million gamer profiles, and it will provide us with essential data capabilities to deliver our customers a complete social offering with a more targeted, integrated, and personalized experience for today's gamer. This is a meaningful next step towards becoming a technology-powered, media, esports, and entertainment company. The acquisition is expected to close by the end of the second quarter of 2021. I want to reiterate that M&A has and will continue to be a very important part of our go-forward growth strategy. Do we need to acquire to grow? No. We're just getting started and believe very much in our organic growth strategy built around our proprietary monetization flywheel. And with 300 million gamers connecting with our content and influencers each month, we have the scale to deliver significant revenue and margin growth. However, we recognize the unique opportunity to continue to consolidate a very fragmented market of fan communities that are dedicated to Gen Z and millennial gamers, as evidenced by a recent acquisition of Icy Veins, one of the largest activism Blizzard fan communities in the world. Acquiring these communities is immediately accretive and unlocks the ability to start monetizing through our differentiated flywheel. With IC veins and other acquisition targets in our pipeline, we see a tremendous opportunity to bring them in and unlock more targeted direct sales and sponsorships, premium subscriptions, content licensing, and e-commerce opportunity. Turning to paid subscriptions, subscriptions grew by 49%. ending the quarter at $137,000. It would have been nice to get one or two more, so I could have said we grew at 50%, but I'll bring that up at another staff meeting. However, recent investments in late 2020 in the areas of including pricing and retention experts are already seeing results as we increase the lifetime value of each subscriber. We plan to continue to invest in this high-growth, high-margin, recurring revenue business and leverage our influencers and other assets to create new, unique premium subscription content. Again, today's announcement of Project GG and premium subscription offering is a testament to our commitment to this area of the business. On the content licensing and distribution side, we continue to ink new distribution partnerships, including with Glued TV, Distro TV, and Video Elephant, And subsequent to the quarter, we announced a partnership with eSpat TV to produce premium gaming and esports content, especially in streaming and social video. Turning to Luminosity Gaming, our esports organization has never been more popular. In March, Luminosity Gaming was the most popular esports organization in the world on Twitch, with 40 million hours watched, nearly 60% more than the second place team. We continue to innovate on the content side and are excited about our growth prospects in this area. As you can see, we've accomplished a lot in the first quarter of 2021, but we're just getting started and we remain highly optimistic about our growth objectives for the year. There are a lot of exciting opportunities ahead and we are focused on staying on strategy to achieve our goals in 2021 and beyond. I am excited as ever for our future and believe that we have the team and the diversified mix of assets to deliver long-term shareholder value. I will now turn the call over to our CFO, Alex McDonald, for further commentary on our financial results.