Enthusiast Gaming Holdings Inc.

Good afternoon, ladies and gentlemen, and welcome to the NCCS Gaming Holdings, Inc. Second Quarter 2024 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, August 14, 2024. I would now like to turn the conference over to Mr. J.B. Elliott, Chief Strategy Officer and General Counsel. Please go ahead, sir.

Thank you, Operator. Good afternoon, everyone, and welcome to the Enthusiast Gaming Second Quarter 2024 Results Conference Call. I'm J.B. Elliott, Chief Strategy Officer and General Counsel. With me today is Interim CEO Adrian Montgomery and our Chief Financial Officer Felicia De La Fortuna. We'll begin with some prepared remarks and then open the floor to 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 appears in the company's management discussion and analysis for the three-month period ending June 30, 2024, which are available under the company's profile on CDAR+, as well as on the company's website at enthusiastgaming.com. You are cautioned 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 statement as a result of new information, future events, or for any other reason. Now, I'd like to turn the call over to Adrian Montgomery. Adrian, the call is yours.

Thank you, J.B., and a warm welcome to everyone joining our second quarter earnings call. It has taken significant effort across the entire organization to deliver on the commitments we made for the first half of this year, and I'm proud to say that these efforts have paid off. Today, I'm pleased to present results that confirm that our company is not just stable and well-funded, but has also effectively reached a break even and has some promising quarters ahead. While reaching this point has required significant work, it comes as no surprise to me that we've gotten here. I know firsthand the strength of our core assets and the vibrant communities that underlie this business. The enthusiasm within these communities remains strong and demand for our product innovations continues to grow. The resilience of the business demonstrated through challenging times is nothing short of commendable. And we have emerged from this period on our strongest footing ever. And now, with renewed confidence, we are back to business. with bright days ahead. Much of this success can be attributed to the significant advancements we saw in Q2. During this quarter, we experienced rapid optimization of our new ad tech setup, propelling many of our properties to new heights in June. Our cost efficiency initiatives are also bearing fruit, with a full quarter's results now reflecting their impact. We expanded several product lines, forged a strategic partnership with the National Hockey League and renewed our existing partnership with the NFL for a third season. Additionally, we undertook a complete overhaul of our direct sales efforts. Confident it is back on track, we have once again started adding sellers, with seven direct sellers added since Q2. As a result, we've seen renewed interest and activity around our direct sales offerings, which we are confident will translate into increased bookings as the year progresses. I note that we have recently won significant new business from some of the most sought-after brands in all of advertising, including both Coca-Cola and McDonald's. These collective efforts culminated in a record-breaking quarter. Our adjusted EBITDA loss narrowed to just $400,000 a remarkable $1.4 million improvement from Q1, and an impressive $3 million gain year over year. Indeed, we have reached a milestone, being effectively breakeven in Q2. I could not be more proud of what we have achieved in Q2, particularly considering we had no seasonal advantages. The first half of the year is typically a slow period for businesses like ours, Plus, NFL TNG was in its off-season, and unlike Q2 when we host Pocket Gamer Connects London, there were no major live events in Q2. Moreover, we completely transitioned our ad tech stack, underwent several leadership changes, and operated with a significantly reduced headcount due to our strategic repositioning. Indeed, Q2 was a baseline, a quarter with no advantages. Despite these challenges, we delivered our best ever adjusted EBITDA result in a period when such an outcome might not have been expected. This achievement is a testament to the strength and dedication across all areas of our business, particularly within products, which continue to grow and thrive. Our owned and operated properties are taking on an increasingly prominent role in our P&L, reducing our reliance on network revenue and giving us greater flexibility to scale at higher margins. These properties are key drivers behind our gross margin expansion, which reached an impressive 66% in Q2, up from 35% in the prior year. U.GG, one of our flagship communities, continues to expand empowering millions of players to enhance their gameplay across a growing number of game titles. In Q2 alone, U.GG launched support for two new titles, Teamfight Tactics in April and Helldivers 2 in June. And the momentum does not stop there. Following Q2, U.GG also rolled out support for Swarm, the latest game mode in League of Legends. We have exciting product advancements on the horizon, including the launch of a Valorant standalone app in the second half of this year and the launch of support for 2x KO slated for release next year. Moreover, there are several key catalysts in the second half that we expect will drive increased traffic to U.GG, including the much-anticipated release of Arcane Season 2 in November and the League of Legends World Championships taking place in November and December. Icy Veins has continued its expansion, adding coverage for Zenless Zone Zero in July, with Honkai Star Rail soon to follow. The migration to our new ad tech stack has given Icy Veins a significant boost, leading to an all-time high in RPM performance. The second half of the year brings even more excitement for Icy Veins, with major catalysts on the horizon. including the highly anticipated World of Warcraft expansion, The War Within, set for release on August 26th, and the Diablo 4 expansion, Vessel of Hatred, slated for October 8th. These major game releases and flagship titles supported by Icy Veins are expected to drive substantial traffic to the site at a time when its ad monetization will be at its peak. TSR, the SIMS resource, had a standout quarter, marked by the launch of several innovative product advancements, including curated bundles for paid subscribers and the introduction of free trials for our VIP service. These free trials have driven a significant increase in conversions from new customers to paid subscribers, and they have shifted our activation metrics, with premium annual packages now making up the majority of all signups. The success of the VIP bundles, coupled with the rollout of a fresh content strategy, is further cementing TSR's position as the go-to platform for Sims fans worldwide. As a result, both June and July set new records for subscriber additions this year. NFL Tuesday Night Gaming Season 3 is designed to bring fans even closer to the gaming creators and the NFL stars they love. This season will feature a 26-episode series with a lifestyle-focused format that invites fans to explore the lives and personalities behind the helmets and headsets. Along with compelling gameplay segments that deepen the connection between viewers and the players, Season 3 will take NFL TNG on the road, visiting key hubs across the United States where gaming and football fans intersect. These format changes will deliver fresh content and new engagement opportunities. They will expand our sponsorship reach and reduce production costs. The new season kicks off in September, featuring partnerships including Toyota, Sargento, and Frigo. Our multi-year partnership with the NHL is progressing well as we prepare for its launch in the 2024-2025 season. The details of this collaboration will be announced jointly by the NHL and ourselves in the coming weeks, and we're excited to bring this product to market. We've identified several synergies between our NFL and NHL programs, including cost efficiencies, production synergies, and complementary sales markets. This partnership will be a flagship component of our direct sales offerings, and it will open doors to a roster of major existing NHL sponsors. Pocket Gamer has had an exceptional first half of the year, with B2B events and media bookings reaching all-time highs. Despite Q2 being a traditionally slow quarter for PGC, our Dubai Game Expo Summit in May, held in partnership with the Dubai government, was the largest event we've ever hosted in the region, attracting over 1,350 delegates, from 650 companies across 60 countries. Looking ahead, the Mobile Games Awards at Gamescom in August, now in its seventh year, is set to be our biggest yet, surpassing expectations with ticket sales still going strong. PGC Helsinki in October and PGC Jordan in November are also on track to set new records and will contribute strongly to our Q4 performance. Additionally, we are actively planning more events for the end of the year and expanding our PGC conferences into 2025. Fantasy Football Scout has also been exceptionally active, recently announcing a partnership with the English Football League for our upcoming fantasy game, the Fantasy EFL. This new collaboration complements our existing relationships with the Premier League and UEFA, significantly expanding our target market. Collectively, these leagues have engaged over 16 million fantasy football players in the past year. Additionally, our premium subscription revenue saw a notable increase from April to June, largely driven by the Euro 24 campaign, even during the traditionally slower period. FFS has also launched a new app on iOS and Android, and it is enhancing its premium members area with upgraded features, including stats bomb data for the Premier League and UEFA Champions League games. Looking ahead to the 24-25 season, we're excited to announce new marketing partnerships with Sleeper and Fan Team, which will further enhance FFS's offerings and reach. And of course, the busiest time of the year for FFS is just around the corner, with the Premier League season kicking off on August 17th. These advancements across key products were instrumental in achieving the record-adjusted EBITDA numbers we reported for Q2. The journey to this milestone was challenging. When I returned in January, we were facing significant obstacles, declining subscriber numbers, rising costs, and struggling programmatic and direct sales efforts. The company was also grappling with limited cash flows. with only $1.9 million remaining at the end of Q1. Despite these difficulties, our management team remained confident and focused. We knew our communities were strong and engaged, and that Enthusiast Gaming is firmly rooted in an exciting industry with a unique value proposition. Gen Z and Gen Alpha spent substantial time with us actively interacting with the content and experiences we provide, and this is a tremendous and rare asset. So now we find ourselves here in August, not only having effectively reached breakeven, providing a solid foundation for future growth, but also having strengthened our balance sheet. In April, we completed the sale of a subset of non-core, non-profitable casual gaming assets for $4 million. This move not only trimmed our adjusted EBITDA loss, but also enhanced our liquidity. And of course, in July, we successfully secured $20 million in debt financing. This was a strategic investment from a supportive partner that has significantly strengthened our financial position and enhanced our liquidity. This crucial boost combined with our stabilized P&L ensure that we are well-funded and ready for future growth. With our financial footing firmly established, Enthusiast Gaming is excellently positioned to capitalize on the numerous opportunities and catalysts ahead, of which there are many. It is these upcoming catalysts that renew my confidence in our future. If we were able to establish a baseline of near break-even in Q2, despite the quarter's disadvantages, Imagine the possibilities as we build on this foundation. What happens when the second half seasonality boosts our programmatic and direct sales? What happens when season three of NFL TNG and our NHL program both return to the air, bringing along their associated direct sales partners? What happens when our major pocket gamer events in Helsinki in Q3 and London in Q1 returns? How significantly can these contribute to profits? With our enhanced liquidity now giving us greater operational flexibility, the potential is huge. Consider the impact of our management team's renewed focus, the ramp up of our seven new direct sellers added in Q2, the continued optimization of our new ad tech stack, and the coming major game releases, which will further boost our key properties. I'll tell you what happens. Each of these elements will build on our solid Q2 baseline, setting us up for a series of increasingly strong quarters. With this baseline in place and this pipeline of catalysts, I once again feel like we are just getting started. Thank you, and I will now turn the call over to Felicia to provide further commentary and details on the financial results. Felicia.