Enthusiast Gaming Holdings Inc.

Good afternoon, and welcome to the Enthusiast Gaming Holdings Incorporated Fiscal Third Quarter 2021 Financial Results Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Eric Bernofsky, Chief Corporate Officer. Please go ahead.

Thank you, Operator. Good afternoon, everyone. Thank you for joining Enthusiast Gaming's third quarter 2021 financial results call. My name is Eric Bernofsky, the Chief Corporate Officer of Enthusiast Gaming. With me today is our Chief Executive Officer, Adrian Montgomery. our Chief Financial Officer, Alex McDonald, and our Chief Operating Officer, Samba Sarmalingam. We'll begin with commentary on the quarter from Adrian and Alex before opening the floor to your questions. Before we begin, I'd like to remind everyone that today's presentation contains forward-looking information that involves known and unknown risks and 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 and analysis. The three-month period ended September 30, 2021, which are available under the company's profiles on CDAR and EDGAR, as well as on the company's website, EnthusiastGaming.com. You are cautioned not to place under 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 at 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 third quarter 2021 financial results conference call. It is my pleasure to once again report on the financial and operational accomplishments in the quarter and year to date, and to reiterate why we believe our plan to dominate the video game and esports fan experience is on the right track. I'd also, off the top, like to thank all the hardworking enthusiasts who show up and give it their all every day. The outstanding results of this quarter are all because of you, and we appreciate you very, very much. At the beginning of the year, we told shareholders, one, that revenue and gross profit would trend up throughout the year in terms of both dollars and percentages. Two, that direct sales would increase in each subsequent quarter of the year. Three, and that paid subscriptions would increase in each subsequent quarter. I'm extremely pleased to update shareholders today and to tell you that we are delivering on these commitments. Revenue in the quarter grew 165% to $43.3 million from $16.3 million a year ago. Pro forma the acquisition of Omnia Media, revenue grew 37% from $31.7 million in Q3 last year. Gross profit grew to $10.1 million, marking the first time in the company's history that quarterly gross profit passed $10 million, up from $4.1 million just one year ago. Gross margin improved to 23.4% in Q3, up nearly 700 basis points from the same quarter last year and up 180 basis points from Q2 this year and 360 points from Q1. Our buy and build strategy continues to underpin our revenue growth and margin expansion. Again, we communicated to shareholders in the middle of 2020 that we would dedicate the necessary resources and focus towards shifting our revenue model from a media aggregator to an integrated media, content, and entertainment model, and in doing so, meaningfully improve the margin profile as well. In the last four quarters, I'm very pleased to report that we have made incredible strides in this area. Direct sales revenue grew to $6.8 million in Q3, up from just $1 million in Q3 last year, and up 55% from just one quarter ago. Direct sales this quarter accounted for 16% of total revenue, compared with just 3% in Q3 last year. And with the premium rates this type of revenue commands, it has contributed a meaningful portion of the nearly 700 basis point margin improvement in the same period. This is part of the secret sauce of our buy and build strategy. we have consistently proven that we can increase the monetization of the assets we acquire through our unique flywheel. By combining more touchpoints to our Gen Z and millennial consumers, we are increasingly recognized as a partner of choice and a one-stop shop for large brands and advertisers. Some of the partners we worked with in the quarter include America's Navy, with whom we collaborated on an integrated media and esports activation. Icy Hot, where we work with them and the Shaquille O'Neal Foundation on an activation that saw top esports players team up to compete against Shaq in NBA 2K. We also began new relationships with DoorDash, Puma, Elevation Pictures, Bacardi, and Paramount Pictures, to name a few. As you can see, we are working with a diverse group of brands across government, food and beverage, apparel, entertainment, and gaming. One activation I am extremely proud of and everyone at Enthusiast is proud of is the work we are doing with Lego. And I would be remiss if I didn't recognize the incredible creativity and execution of our content, talent, and sales teams for bringing this project to life. In July, the Luminosity Academy was launched to push the boundaries of creativity, and guide the development of young gamers across North America. After several weeks of auditions and filming in Los Angeles, Episode 1 of the Luminosity Academy LEGO Technic First Class was released this past weekend, with 30 competitors competing for a spot in the Luminosity Academy. As of this morning, there are almost 500,000 views on YouTube in just a few days, with four more episodes in the season to come. So why did Lego choose us? Well, again, it goes back to being able to offer brands more touch points and more integrated packages than the competition, all while offering the highest level of brand safety, which is a paramount concern to Lego. The success of the Lego campaign follows several other integrated media content, talent, and esports deals. including the first season of Gamer's Greatest Talent, which aired in Q2 of this year and was sponsored by TikTok and Elf Cosmetics, as well as our work with Universal Pictures and Walt Disney Studios to promote theatrical releases. I would also note that not only are our integrated offerings winning in the marketplace with brands, others have taken notice, as evidenced by the recent news that Gamer's Greatest Talent has been nominated for a 2021 Digiday Award for best gaming or esports campaigns. While we are monitoring global trends, including supply chain challenges, the direct sales pipeline remains strong into the first part of Q4 and Q1, and we continue to expect sequential growth this quarter. Turning to paid subscribers, another area of high growth for the company. The number of paid subscribers at the end of the quarter was 207,000, compared to 112,000 at the end of Q3 last year, an increase of 84%. This quarter, we added 52,000 subscribers, aided in part by the acquisitions of GameNaut and Addicting Games. As I have said on previous conference calls, the strong growth we are seeing is a direct result of the investment we made in Q4 last year to establish a team dedicated to growing our subscription business. From a revenue perspective, the growth areas of direct sales and subscriptions totaled $9.3 million in Q3, or about 21% of total revenue, compared to just $2.6 million, or 8%, in Q3 last year. This nearly threefold improvement in the mix of higher margin revenue is something we are particularly proud of. We believe there is still more margin growth to come in these two areas. Late in the quarter, we announced the alpha release of Project GG, a cross-platform, pan-enthusiast gaming social network uniting gaming and esports fans on desktop and mobile. Project GG will enhance the company's ability to deliver a more complete fan experience with a targeted, engaged, and personalized product for gamers and customers alike. It represents a significant step towards the company's evolution to becoming a technology-powered media, esports and entertainment company. Project GG Alpha will serve as a test version of the Gaming Social Network while offering feedback to Enthusiast Gaming's design and user experience teams. That feedback and testing will assist our teams as they prepare for Project GG to transition to a beta version in 2022. As you can see, we have executed on many fronts in the quarter. We successfully closed the GameNaut and Addicting Games acquisitions in the quarter, and they are integrating well into our fan and monetization flywheels. Some have asked why these deals make sense for Enthusiast Gaming, and in particular, how Addicting Games fits in with our overall strategy. Well, it's all about the flywheel, which is about owning more content that can be integrated across Enthusiast and Luminosity properties. content, and talent. Let me give you an example. Shortly after the acquisition closed, we began integrating Addicting Games. Last week, we tested an internal cross-promotional campaign bringing together Addicting Games content and Luminosity creators. We created dedicated Luminosity art called Skins or Virtual Goods inside the popular casual desktop and mobile game Little Big Snake. For the past week, different Luminosity streamers have been playing LittleBigSnake Live during their streams on Twitch and promoting the game to their fans. Collectively, LittleBigSnake was promoted to millions of new potential users while also creating content at the same time. And while today, the virtual goods being purchased within LittleBigSnake have no inherent value outside of the game, we now have a platform to begin developing NFTs for some of our own intellectual property as our research demonstrates there is a marketplace for these items. While this was just a first test, we are excited about the potential cross-promotional opportunities in our sites, not to mention some of the sponsorship opportunities we are already working on with Addicting Games Properties. We are extremely well-funded to continue to execute on additional accretive acquisitions that will expand our audience reach and provide a deeper, more enriched fan experience. We're just getting started and believe very much in our buy and build growth strategy constructed around our proprietary flywheel. We have accomplished a lot through the first nine months of 2021, and we are confident in our team's ability to execute in Q4 as we continue to execute on this strategy and we will continue to deliver results. I will now turn the call over to our CFO, Alex McDonald, for further commentary on our financial results. Alex.