Enthusiast Gaming Holdings Inc.

Good afternoon and welcome to the Enthusiast Gaming Fiscal First Quarter 2023 Financial Results Conference Call. All participants will be in a 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 must 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'll now like to turn the conference over to Mr. Matt Chesler, Investor Relations. Please go ahead.

Thank you, Darcy. Good afternoon, everyone, and welcome to the Enthusiast Gaming first quarter 2023 conference results call. My name is Matt Chesler of FNKIR, and we've recently been retained by Enthusiast Gaming to serve as Investor Relations Counsel. With me today is our Chief Executive Officer, Nick Bryan, and our Chief Financial Officer, Alex McDonald. We'll begin with some prepared remarks from Nick and Alex, and then open the floor to questions. But 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 for the three-month period ending March 31, 2023, which are available under the company's profiles on Cedar and Edgar. as well as on the company's website, enthusiastgaming.com. You're cautioned not to place undue reliance on these forward-looking statements, which speak only as 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. And now, I'd like to turn the call over to Nick Bryan, CEO of Enthusiast Gaming. Take it away, Nick.

Thanks, Matt. Thank you very much. I joined Enthusiast Gaming as the Chief Executive Officer, or as I like to say, the Chief Enthusiast Officer, on March the 1st. Very shortly thereafter, I conducted my first earnings call, and now, just several weeks later, I have a great deal to share with you. My excitement to join Enthusiast Gaming at this critical point in its evolution has only grown in the two and a half months since I joined the company. We have a remarkable business with many outstanding assets operating across every aspect of the gaming media and entertainment ecosystem. We have a highly engaged and scaled audience of nearly 50 million monthly average users. According to Comscore, the largest audience of gamers ahead of Twitch and Roblox. as well as a talented management team with deep gaming expertise and a truly massive opportunity to lead in one of the most exciting yet underdeveloped sectors of marketing today. Even as brands and advertisers continue to deal with certain economic uncertainty that are increasingly shifting more of their campaign dollars to innovative marketing environments that offer them opportunities to reach the elusive Gen Z and millennial audiences with higher creative impact, and proven ROI. With all these strengths and catalysts, it's now about driving the rapid transformation of enthusiast gaming from a collection of entrepreneurial assets to an enterprise-scale platform company that is tech-enabled, data-driven, and content-led. We are implementing a strategic growth plan that puts all of these pieces together, position enthusiast gaming as the leading independent gaming, media, and entertainment company. Our goal is to create a more profitable revenue flywheel that better leverages our highly engaged communities across our diversified gaming assets, from casual games to esports, to game community sites, to creator channels, to talent management, to Web 3.0 games built on blockchain technology. With that in mind, I'd like to focus my prepared comments on five key areas. First, platform consolidation for greater leverage. Second, ad tech excellence for yield optimization. Third, AI and automation for operational efficiency. Fourth, brand solutions and strategic partnerships for accelerated growth. Fifth, diversified revenue streams for higher margin performance. So first, a reminder that this company was created through rapid M&A, so the tech and engineering needs vary tremendously according to the particular area of gaming activity. We are now building a unified technology platform to ensure that we're as agile and efficient as possible across all aspects of product development, data management, and systems integration. This R&D initiative isn't only for our internal operating units, but also for our key external tech partners who are critical to ensure that we're meeting the very high expectations of our demanding gaming communities. This platform innovation becomes even more important as we embrace the future opportunities of Web3, as well as bringing maximum value and ROI to our brands and agency partners. Secondly, I'd like to discuss our commitment to ad tech excellence to ensure that our digital media flywheel is selling our valuable inventory programmatically at the highest possible yield. To ensure that we become the biggest independent gaming publisher network of owned and operated and external publisher sites, we need to be working with the best ad tech partners possible. This begins with our partnership with Permisys, Permitiz is a leading data management platform who will be helping us to activate our first-party data across all of our audience cohorts in the bid stream today. We're selling today through over 25 sell-side platforms, and we're now finalizing our marquee SSP partner with whom we can create and sell unique gaming audience segments in HireFly's direct deals versus the open exchange. We've also consolidated our ad-serving partners to only Equatiff and Google Scan 360, thus streamlining our display and video ad delivery with minimum delay and maximum creative impact. There is no doubt in my mind that with our commitment to programmatic excellence, we will soon be selling omnichannel campaigns fueled by unique gaming inventory, powered by first-party data and custom content. All of these developments will enable us to significantly improve the revenue growth and profit margins for the advertising line of business in the near future, while ensuring that we help our advertisers maximize the ROI of every campaign dollar their spending models. Next, I'd like to talk about AI and our focus on automation. I really like what the CEO of Coca-Cola said publicly about AI after their recent earnings call. I quote, much has been said about AI, and it's certainly going to abate the maxim. Profound transformative technology is often overestimated in its impact in the short term and underestimated in the long term. This is going to have a profound impact, profound internally for the way our business operates, but also how we engage with consumers. He then added, I think AI is going to make a huge impact in marketing. Well, we're very excited about our position as the largest independent player in the gaming, media, and entertainment industry, not owned by a tech giant operating a walled garden. This allows us to focus on the power of AI for the benefit of our enthusiastic communities, as well as the marketeers who are partnering with us to create winning brand activations and engaging ad campaigns. We will be testing every relevant AI tool at our disposal to improve ad sales, ROI metrics, and user acquisition, as well as the emerging creative talent identification challenge. The fourth area to discuss is the repositioning of direct sales to brand solutions, as well as the creation of a strategic partnership division. We renamed our leading growth engine Brand Solutions to reflect the true value of our customized content, media, and sponsorship integrations that our teams imagine and deliver. After four years of tremendous service for Enthusiast Gaming, we're promoting Amanda Rubin to EVP Brand Solutions, and she will be responsible for both Brand Solutions and programmatic media sales. We have also more closely aligned customer success with Brand Solutions with the goal of ensuring the seamless integration of creating, pricing, and packaging our brand solutions in as resource-efficient way as possible. In addition, we established a strategic partnership division to accelerate the pace with which we explore alliance opportunities with the key strategic partners involved in the gaming industry and popular culture today. The partnership with the NFL Tuesday Night Gaming was a great case study for the types of events, promotions, and partnerships we can deliver. We expect to establish meaningful partnerships with the leading game publishers, sports associations, entertainment companies, and music industry leaders. And to lead this important function, we have promoted Matt Goodman to EVP Strategic Partnerships in addition to his current responsibility for customer success. Our content division remains a driving force for enthusiast gaming, so we must continue to attract the best creators, writers, producers, and directors. We have developed in-house production capabilities, and with the NFL Tuesday night gaming preseason content in the pipeline and Luminosity's efforts to attract new talent throughout 2023, we are well positioned for growth. Our content team is working closely with the brand solution team to create multiple content tentpoles throughout the year with successful collaborations such as Nintendo Juniors already under our belt. Dottie Tidwell has been promoted to the role of EVP content and creators, reflecting his strong contribution to build critical strength in this important creative area of our business. Our Q1 achievements include $311 million owned and operated views and custom content activations for major brands like Xbox, Power Patch Kids, Carnival Cruises, and many popular films. Additionally, our Story Talent Agency has expanded its network, adding a vast array of content creators, athletes, and gamers to our offerings. This has increased visibility and diversified content while enabling new revenue streams. Finally, I'd like to discuss our strategic focus on developing alternative revenue streams to better diversify our business model and lessen our reliance on the highly competitive advertising revenue. We currently enjoy our highest profit margins in subscription revenues, and we see further opportunities to charge subscriptions to access our high-value content and create a community site. We're testing different subscription models across a number of our properties today, expect these to create preferable user engagement models to the existing ad-supported content experiences. As evidenced by the strong demand for travel and entertainment, we believe that live events and gaming experiences offer similar high-margin revenue growth as we experience today with Pocket Gamer, our global B2B events business. We're investigating different live consumer events for the gaming enthusiasts to play, compete, and connect across North America, especially as the highly popular and annual E3 Gaming Expo in LA has been canceled for 2023. Luminosity, our esports division, is in talks with strategic partners for those multiple upcoming live game events in Toronto, New York, Miami, and Mexico. Community commerce is an area of strategic focus for many digital publishers and content creators. So we, too, are testing different products and service offerings that we believe will extend our monetization opportunities in addition to our ad-supported and paid subscription business models in place today. As part of this transformation, we will continue to invest in our people and grow our culture. I passionately believe that talent and teamwork are the key building blocks of success. My first step was to create a revised management structure so we can invest in the best people. We recently welcomed Tara Fournier as our chief people officer. Tara's proven experience at Zillow, Vizio, Disney, and most recently at Amobi, where we worked closely together for the past 10 months. Tara will ensure that every aspect of the people management function, including compensation and benefits, training and development, career management, culture building, and diversity and inclusion will all be managed to the highest professional standards. Our biggest investment is in our people, and it is also our greatest strength. To better manage the complex operations of our business, we've established a broader strategic leadership team to help our talented management execute flawlessly against the most important strategic initiatives that I've discussed with you today. For brands, gaming is a massive opportunity that can no longer be ignored. It is arguably the best media sector for brands to connect with their current consumers whilst engaging the younger audience that they are desperate to recruit. Gaming has the scale of mass media combined with the personal engagement of social media. As more people play, compete, and socialize, gaming environments will become the most prized marketing spaces. However, advertising is only the tip of the iceberg. As commerce, esports sponsorships, creator partnerships, real life and virtual merchandising, in-platform branded experiences, they all represent innovative brand activation possibilities. Enthusiast Gaming is uniquely able to operate across every level, of the gaming ecosystem, enabling brands to not just tap into popular culture, but to become part of it. I believe that we are capable of making Enthusiast Gaming the most dynamic, innovative, and profitable independent gaming, media, and entertainment company on the planet. I'd now like to hand over to Alex to discuss the financial performance for quarter one.