Enthusiast Gaming Holdings Inc.

and welcome to the Enthusiast Gaming Holdings, Inc. Third Quarter 2024 Financial Results Conference Call. All participants will be in 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 J.B. Elliott, Chief Strategy Officer and General Counsel. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to the Enthusiast Gaming Third Quarter 2024 Results Conference Call. I'm J.B. Elliott, Chief Strategy Officer and General Counsel. With me today is Interim Chief Executive Officer Adrian Montgomery and our Chief Financial Officer Felicia Della 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 September 30, 2024, which is available under the company's profile on CDAR+, as well as on the company's website at enthusiastgaming.com. The precaution not to place undue reliance on these forward-looking statements would 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'd like to turn the call over to Adrian Montgomery. Adrian, the call is yours.

Thank you, JB, and thank you, everyone, for joining us on today's third quarter earnings call. I am thrilled to share that Q3 marks a transformational milestone for Enthusiast Gaming. For the first time, we achieved profitability on an adjusted EBITDA basis, which has changed for Enthusiast Gaming. This result is more than a financial achievement. It is a powerful testament to the stability, resilience, and growth potential of our business. The shift to profitability is particularly significant as it reflects the success of our comprehensive strategic refocusing, which we have been undertaking since Q1 of this year. This quarter, We delivered $3.6 million in adjusted EBITDA improvement year over year, a trend we are determined to continue. By carefully optimizing our operations, streamlining costs, and focusing on high-margin areas, we have positioned Enthusiast Gaming for a future of sustainable growth on an efficient footing, driving forward as a higher-margin and, most importantly, consistently and increasingly profitable business. Our cost reduction efforts have been instrumental in this transformation. I'm pleased to announce that we have now achieved over $20 million in annual cost savings, doubling our original goal of $10 million. What makes this achievement even more impactful is that we realize these savings without sacrificing the growth of our communities or the quality of our content. In fact, Page views across our core web properties increased quarter over quarter in Q3, reaching 1.9 billion, up from 1.8 billion in Q2, underscoring our ability to expand our reach while maintaining disciplined cost control. With this stable foundation, we have laid the groundwork for a sustainable growth engine that enables us to scale efficiently with predictable expenses. Our direct sales team, a major focus this year has undergone significant change. We took essential steps to rebuild and refocus this team in 2024 with a sharpened emphasis on cultivating long-term relationships and high-value partnerships. Given the longer sales cycles that typically accompany direct sales, changes in this area naturally take time to fully reflect in our financial results. However, we are already seeing very promising indicators of growth. Amazon, our largest direct sales client year to date, increased its spend with us by 107% this quarter compared to Q2, and our early booked sales for 2025 are as strong as they've ever been at this point in the year. Our media mix has realigned with our core strength, a custom sponsorship heavy focus. In Q3, Custom sponsorships accounted for 56% of our direct sales, up from 28% in Q2. This shift towards high-value campaigns is delivering results across multiple offerings, including custom campaigns and sponsored streams for the Kamala Harris campaign, a project that even Elon Musk felt compelled to reference on his personal social channels. This momentum has placed us in an enviable position as we head into the final stretch of the year. We anticipate that seasonal trends will favorably impact our profitability, particularly in our programmatic advertising and direct sales channels. Seasonality drives higher CPMs and increased advertising demand as we enter the holiday period, creating a natural tailwind that will amplify our profit potential across our entire product lineup. From direct sales to programmatic channels, the seasonal boost builds on an already profitable base, positioning us for a robust close to the year. Our programmatic ad revenue structure continues to benefit from ongoing optimism, as well as our partnership with Playwire, which has equipped us with a robust monetization engine that allows us to target high-value audiences on our core properties while maintaining stable costs. This translates into more profitable revenue. This quarter's total revenue was $16.8 million, which is down from $45.5 million in Q3 2023, primarily due to divestments and our strategic refocus on high-quality assets. However, our revenue is now significantly more profitable. Our gross margin in Q3... 3%, up from 36.7% last year, underscoring the profitability of our core web properties and the stability of our cost structure, including our cost of goods sold. Every dollar of revenue now has a higher impact on our bottom line, thanks to those efficiency and market improvements. And in addition to these financial advancements, our core products continue to drive engagement and growth across multiple channels. The SIMS resource has seen tremendous progress of late, particularly with its premium subscriptions. This month will mark the sixth straight month of paid subscriber growth for TSR, following a previous four months of decline. Conversion rates on the SIMS are now as high as they've ever been, and the shift toward premium annual packages, driven by the launch of free trials and adjustments to our pricing models, has created a steady upward trajectory in revenue and customer lifetime value while simultaneously reducing churn. As our most financially successful property, TSR provides a model for how we can expand our high value offerings. And we are actively exploring additional ways to technology and expand its reach, including the potential for expansion into other game titles. Icy Veins continues to deliver impressive results, solidifying its position as the go-to destination for fans of Blizzard game titles. The recent War Within expansion for World of Warcraft drove significant traffic to the site in Q3, and with the Diablo 4 expansion, Vessel of Hatred, released in October, Icy Veins is on track for a record year. We're committed to maintaining this momentum and ensuring Icy Veins site for fans of Blizzard content, as its consistent growth rate reflects the depth of engagement within our communities. U.GG is another standout, experiencing steady growth as a trusted resource for League of Legends players. We were able to quickly expand U.GG's offering to include new features for the League of Legends swarm mode, capturing even more League players within our ecosystem. while advancing upcoming title expansions for 2xKO, the upcoming Riot fighting game, and Deadlock, Valve's highly anticipated MOBA title. This growth has been amplified by the recent League of Legends World Championship, which concluded in early November. We're riding a wave of heightened interest, and U.GG is in a prime position to continue capturing the attention community, as well as the broader gaming community, which it services through its expansion. With U.GG's reach expanding and its feature set becoming more robust, we're confident it will continue as a valuable resource that draws both dedicated players. In addition to our ongoing product success, our events business, including Pocket Gamer Connects, has shown impressive growth. PGC's Mobile Games Awards, the Oscars of Mobile Gaming, were held in Germany and saw record attendance. And although our PGC Helsinki event took place in early Q4 of this year, pre-sales and engagement were strong in Q3, with the event expected to positively impact Q4 results. We are also planning for 2025, including expansion in Asia and a new European event in Barcelona, among others. Pocketgamer.com has continued to see robust traffic, averaging over 2 million users per month and 9.6 million page views per month, a sign of the sustained engagement we're building across our properties. Fantasy Football Scout also had a strong quarter with the launch of the Fantasy Premier League 2024-25 season and its new app. Premium subscription revenue increased for the fifth consecutive year, successful partnerships with the English Football League, UEFA, and the Premier League, as well as team partnerships with Aston Villa, Chelsea, and Manchester City. This consistency in growth and engagement reflects the strength of our brands and their appeal to a loyal fan base. Our strategic partnerships with the NFL and NHL are also key pillars of enthusiasts' content and engagement strategy. In Q3, we aired six episodes of NFL Tuesday Night Gaming's third season, which features an all-new format that has successfully drawn even more interest. This year, we had a success of 93 million impressions in Q3, a 467% increase year-over-year compared to Q3 of last year. This incredible growth reflects the strong connection NFL Tuesday Night Gaming has forged with both sports and gaming audiences, showcasing our ability to bridge these two dynamic worlds in a way that captivates fans. Building on this success, we're excited for the launch of NHL Puck and Play in Q1 2025. This initiative with the NHL will allow us to tap into the energy and loyalty of hockey fans creating new high-engagement content and revenue opportunities that deepen our position at the intersection of gaming and professional sports. Looking ahead, we see a clear path to sustained and increasing profitability. As we move into Q4 and beyond, we are fully prepared to leverage both our stable foundation and targeted growth initiatives. With seasonal trends driving higher ad rates and increased engagement, we are poised to close the year on a strong note. For example, our revenue per thousand, or RPM, is up 139% compared to Q3 2023. And with our high-value partnerships performing well, including our NFL Tuesday night gaming property and our soon-to-launch NHL partnership, we are in an ideal position to capitalize on favorable industry tailwinds. Let's talk about the future. For Enthusiast Gaming, the future is a return to sustainable, high-quality growth built on a solid and efficient foundation. With streamlined operations and a robust monetization engine in place, we are now able to drive more dollars from our core audience while focused on growing that audience even further. Every page view is now worth more and every page view flows directly to the bottom line. This optimized structure means that as our reach expands, our profitability grows right alongside it, allowing us to turn each interaction into meaningful value. We're no longer just capturing attention, we're transforming it into tangible returns that fuel our long-term success. It is also essential to remember that we operate within an expanding market. According to a recent report by PWC, gaming remains one of the most growing large sectors in the entertainment and media universe, and we are better positioned than ever to capitalize on that growth. As the gaming audience widens, so does the potential for Enthusiast Gaming to capture and engage new users, drawing them into our ecosystem of platform content. In addition, according to Dentsu, digital remains the fastest growing area of advertising, and it is expected to capture 62% of all advertising spend in 2026. The growth of these two sectors have a compounding effect for enthusiast gaming. We also see significant opportunities to drive growth across several strategic areas. First, there's continued room to expand our existing platforms into additional game titles, with Icy Veins and U.GG both poised to capture even larger audiences, as evidenced by the success of Icy's expansion into Diablo 4. Additionally, the Sims resource provides a technological blueprint we can use to create new, scalable platforms across other game titles. We also see ample opportunity for growth in search engine optimization and in the social media space, where targeted efforts can extend our brand, reach, and attract more engaged users. Finally, as our profitability continues to rise each quarter, our capacity to reinvest now expands, positioning us to explore new markets, enhance our current offerings, and drive long-term value for our shareholders. In summary, EGLX's future is one of efficiency, high margins, and a commitment to profitable growth. Our path forward is measured, strategic, and built on creating sustained and scalable value. We are not only focused on once again gaining significant ground, but on making every gain count toward our bottom line. Thank you. all for your support as we move forward into this exciting next phase. I will now turn the call over to our CFO, Felicia, for more details on the financial results.