GameSquare Holdings, Inc.

Good afternoon, and thank you for joining us for the GameSquare Holdings 2024 fourth quarter conference call. On the call today, we have Justin Kenna, GameSquare CEO, Lou Schwartz, President, and Mike Munoz, CFO. During the call, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. Before management discusses the results, I'd like to remind everyone that certain statements in this call may be forward-looking in nature. These include statements involving known and unknown risks, uncertainty, and other factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. For information about forward-looking statements and risk factors, please see our 10Q for quarter ended December 31, 2024, which will be available on the company's website or with the Securities and Exchange Commission. I will now turn the call over to GameSquare CEO, Justin Kenna. Justin, please go ahead.

Thank you, and good afternoon to everyone joining us on today's call. Since our founding in August of 2020, we have followed a strategic plan focused on quickly building a diverse set of media, agency, technology and esports assets to help global brands engage with hard-to-reach esports and youth audiences at scale. Our 2024 financial results reflect the success of the first phase of our plan, driven by the differentiated platform we have created and the organic and M&A growth strategies we have pursued. In less than four years, Gamesquare has achieved $100 million in pro forma revenue through our team's efforts to develop next-generation solutions and drive connections between the world's largest video game publishers, top-tier brands, and global gaming and esports communities. As we have stated on prior calls, our operating plan for 24 was focused on three main components. First, to complete the integration of the phase acquisition and significantly reduced our cost structure. Second, to strengthen our balance sheet and divest non-core assets. And third, to leverage our platform of owned and operated IP, agency and media, and SaaS advertising assets to drive profitable growth. I believe our recent performance demonstrates the progress we've made throughout the year. With these efforts successfully behind us, we are excited to begin the next phase of our multi-year strategic plan and focus on reaching positive adjusted EBITDA and cash flow in 2025. Given the rapid pace of our growth over the past four plus years, we understand there have been a lot of moving parts to our business. I want to use the rest of my prepared remarks to outline the recent phase media divestiture and our go-forward platform projects. the strategies we pursued to optimize our model in 24, and why we believe we are positioned for a strong year of organic growth and profitability in 25. So let me start by providing an overview of our 2024 FaZe Clan acquisition and integration. As a reminder, in March, we completed the acquisition of FaZe Clan in an all-stock transaction valued at $14 million. Since completing the acquisition, we strategically split FaZe Clan into two assets, Phase Clan Esports, which is one of the world's best and most recognized esports organizations, and Phase Media, which we regard as one of the largest followed gaming brands in the world. As part of our strategy, we understood that for Phase Media to be successful, Phase's founders and creators had to be at the helm, have an ownership stake in the organization, and be empowered with creative direction. Since March 2024, we focused on rebooting the Phase brand reducing operating costs and positioning FaZe Media for success as a standalone creator-led business. The reboot of FaZe Media happened faster than expected and we successfully divested FaZe Media on April 1, 2025 versus our original expectation of December 31, 2025. The divestiture of just FaZe Media was valued at over $39 million compared to the original purchase price for both FaZe Esports and FaZe Media of $14 million in stock. FaZe Clan, in total, had pro forma revenue of nearly $45 million and pro forma adjusted EBITDA loss of $32 million in 2023. FaZe Clan had pro forma revenue of $38 million and pro forma adjusted EBITDA loss of $9.3 million in 2024. The majority of the revenue and EBITDA loss of FaZe Clan was due to FaZe Media, and with the April 1 divestiture Phase Media is no longer consolidated in GameSquare's financial statements. It is also important to note that with the April 1 divestiture of Phase Media, we have eliminated approximately $10 million of debt that was on our balance sheet as at December 31, 2024. In addition, since separating Phase Clan Esports and Phase Media in the second half of 2024, FaZe Clan Esports had revenue of $7.3 million and was EBITDA positive. We still own 100% of FaZe Clan Esports. Finally, GameSquare will remain the agency of record for FaZe Media, which we expect to contribute $500,000 to our agency business in 2025. Today, our platform consists of SaaS and managed services, agency and media, and owner-operated IP assets, as well as our esports team based on esports. It is important to note that from a financial reporting standpoint, we break out our segments by teams, agency, and SaaS and advertising. Going forward in 2025, we expect to adjust our segment reports to align with how we view our business. Overall, we believe we have created a differentiated platform at scale that supports relationships with the world's largest game publishers and brands. In addition, our platform is uniquely positioned to help our customers engage with hard-to-reach gaming youth audiences. As brands look to drive market share in the current economic environment, we believe we are well positioned to grow organically. Our confidence is supported by recently signed partnerships and a robust order book and pipeline that we expect to really start to accelerate revenue in the second quarter. With the successful divestiture of Phase Media, we are focused on executing the next phase of our strategic plan and profitably growing our business. For 2025, we believe we can grow sales organically by 20% to 25% from annual pro forma sales in 2024 as a result of new and existing customer relationships and cross-sell opportunities. Our growth strategy for 2025 is focused on pursuing managed service opportunities within our SaaS and advertising business, leveraging the growing success of our agency, media, and experiences business, and accelerating the growth of base cloud esports. Our core SaaS business delivered strong performance in 2024, with gross margins exceeding 70%. Stream Hatcher continues to lead with cutting edge analytics and business intelligence solutions tailored to the live streaming and gaming industries. Longstanding client relationships, including multi-year agreements with Riot Games, Epic Games, Tencent, TikTok, and many others, underscore the platform's strategic value. In 2024, StreamHatchet launched a proprietary AI-powered influencer discovery tool, which leverages data from more than 50 million creators to match brands with optimal partners for campaign success. The tool was initially soft-launched in partnership with Scopely, the publisher of Monopoly Go, and StumbleGuide to validate its performance. Following a successful pilot, we plan to roll out the solution to our global customer base throughout 2025. A key growth initiative in this segment is focused on expanding our managed services offering, which is a high-touch solution designed for customers looking to outsource their entire influencer marketing lifecycle. From discovery and vetting of creators to full campaign activation, our managed services cater to the complex needs of game publishers and Tier 1 brands. This model combines our proprietary technology with hands-on execution, allowing us to deliver turnkey programs with measurable impact. Providing managed services also has the potential to drive cross-selling opportunities across GameSquare's ecosystem. In early 2025, Stream Hatchet signed the largest contract in its history with Capcom to support the launch of monster hunter wilds. This engagement demonstrates the value of our managed services model and the strength of our integrated platform. By adding managed services to our portfolio, we have unlocked multiple seven-figure opportunities in our pipeline and expect to see significant growth in this area through 2025 and beyond. We also see accelerating momentum at Sidekiq, our influencer marketing and creator relationship management platform. Sidekiq has quickly become the platform of choice for the world's largest game publishers and Tier 1 brands. With over 50% of game publisher revenue now attributed to influencers and creators, managing these relationships with the same rigor as enterprise customer data has become a strategic imperative. Sidekiq is now finely tuned to meet the highly specialized needs of game publishers, including capabilities for key software distribution for pre-release titles, integrated Discord channels for creative communications, and DocuSign-enabled contract workflows. This focused product positions Sidekick as a critical system of record for managing influencer programs at scale. In addition to signing a multi-year partnership with eFuse in 2024 to support expanded marketing efforts in gaming and esports, Sidekick has developed a strong sales pipeline and expects to see above-average growth in 2025 and beyond as demand for scalable creator relationship tools accelerate. To further enhance customer value, we are actively integrating StreamHatch and Sidekick into a unified platform. Single sign-on is now available across both systems, and all product roadmap planning is centered on delivering a seamlessly integrated experience. By combining analytics reporting and influencer relationship management into one platform, we are creating a powerful data-driven solution for brands and publishers, to manage every aspect of their creative strategy from a single interface. Moving to our agency and media business, we experienced strong growth across our agency and media assets, led by a year-over-year revenue increase of 115% at Zoned. Zoned is our creative agency that is experiencing success from in-game world-building campaigns and providing top-tier brands with strategic marketing and activation solutions. For 2024, we launched custom worlds inside metaverse-style games like Fortnite for brands including Topgolf, Dairy Max, ESPN, and SpongeBob SquarePants. Our world-building campaigns drove over 125 million minutes of gameplay and generated $3.9 million in revenue in 2024. We have a really strong pipeline and expect revenue from world-building projects to increase over 100% in 2025. In addition, for 2025, we are pursuing opportunities to license IP and build in-game worlds where we can capture more of the revenue we generate within these activations. We are finalizing an agreement with Paramount to license SpongeBob SquarePants to develop additional in-world games and expand on last year's success. We plan to launch several custom worlds of popular brands that we have licensed during the year. In addition to world-building campaigns, our agency and media assets are seeing demand for broader opportunities in the digital age. Our agencies continue to grow their capabilities outside of gaming and are quickly becoming the go-to experts for all things internet and youth culture. This includes new collaboration opportunities within mainstream cultural staples, new community-focused initiatives and crossover opportunities to leverage GameSquare's technology assets for brand clients. Cross-selling is an important growth initiative highlighting the end-to-end capabilities of GameSquare's next-generation platform. Nowhere is this more impactful than within our own and operated IP strategy as it touches all aspects of our business, including in-game world-building, experiences and technology assets. GameSquare Experiences combines all of this together by connecting our own and operated IP, content, live events, and consumer product assets under one team to highlight the connectivity of experiences. The growth strategy for games for experiences is aligned with emerging trends that we are seeing across our markets as interest is growing for immersive talent-led and brand-owned experiences that connect with audiences through compelling storytelling, digital engagement, and unforgettable in real life or IRL touchpoints. To support our efforts in customer demand, we added Paul Aopam as our GM of GameSquare Experiences in late 2023. Since then, we have created world-class events such as Ninja's New Year's Eve and the NFL for the Fans Live, creator-led events for Epic Games, as well as successful activations for Tesla, Interscope Records, the Dallas Cowboys, and ESPN. The 2024 GameSquare Experiences business was a multi-million dollar revenue division that and saw a 150% increase in revenue from Q3 24 to Q4 24. We expect annual revenue from our Experiences business to increase year over year by 5x in 2025 as a result of existing 10 new partners and achieve over 30% in gross margin. In 2025, we added proven lifestyle multicultural marketing, gaming and entertainment executives. Our Experiences team has the know-how to produce, manage, and organize large-scale activations supported by the capabilities of GameSquare's platform. Based on market interest and our sales pipeline, we recently announced the expansion of our experiences business. This includes delivering moments for fans and consumers by partnering with top-tier brands, gaming communities, and major festivals across the U.S. This includes the recently announced strategic partnership with GG Tech, to bring the premier global esports festival Gamergy to Dallas in March of 2026. Gamergy is one of the world's largest esports and gaming events, tailored for video game enthusiasts of all ages and backgrounds. Since its inception in 2016, Gamergy has successfully organized over 20 global editions, including festivals in Spain, Argentina, Egypt, Panama, El Salvador, and Mexico. GameSquare will leverage our full platform of capabilities to provide strategy, event design, talent recommendations, marketing and operations for Gamergy 2026. I'm excited to provide additional details on Gamergy 2026 as the event develops. In addition, Gamesquare is launching a new collegiate esports initiative aimed at building community and engagement across university campuses. As part of our strategic partnership with GG Tech, we will bring new experiences to students in the US through GG Tech's leading university esports IP. GG Tech's eSports new experiences. Sorry, excuse me. GG Tech has partnered with over 2,000 global universities, 9,000 teams, and 100,000 users to provide gaming experiences for students, scaling to meet the demands of global market, global gaming markets. As a result, University eSports has become one of the top collegiate eSports organizations in the world. Our expanding events and experiences division is a key pillar of the company's strategic vision. We believe events can drive cross-selling opportunities across GameSquare's business, and we look forward to additional announcements as these events are formalised. Turning to our FaithGland esports business. After a strong 2024, we are extremely excited by the potential of FaithGland esports in 2025. FaithGland esports had a strong showing in the 2024 Esports World Cup, receiving points in six games and two podium finishes. In total, FaZe Clan Esports won approximately 2 million prize winnings in the 2024 Esports World Cup, the largest ever tournament winnings. FaZe Clan Esports will return to Riyadh, Saudi Arabia for the 2025 Esports World Cup. This year's event will offer the largest prize pool in Esports history of over $60 million in total cash prizes and feature 24 of the most popular Esports titles across all major gaming genres. Not only will FaZe Clan Esports be participating at this marquee event, but other Games Square businesses will be supporting this massive activation, and I look forward to updating investors in future calls. I'm also pleased to announce that on February 16, 2025, FaZe Clan Esports won the sixth invitation of 2025 in Boston, taking home $1 million in prize money. This was FaZe Clan Esports' largest ever Rainbow Six winnings. As you can see, FaZe Clan Esports is one of the world's top-performing esports teams, and we believe we can significantly elevate and monetize the team in 2025. This year, we have plans to leverage our corporate headquarters at the Star in Frisco, Texas, by creating a performance hub and home to FaZe Clan Esports. This includes adding partners who see the value in the FaZe Clan brand and location at the headquarters of the Dallas Cowboys. We are following a proven strategy that saw Game Square increase sales of our prior Esports team by over 220% in just two years. As a result, we believe we have the right asset and formula to grow FaZe Clan Esports and to hit profitability in 2025 and beyond. We are currently finalising two seven-figure licensing deals within our FaZe Clan Esports business that, depending on the timing, may see the company get to profitability sooner. As you can see, 2024 was a transformative year for Gamesquare. Looking forward, we are excited to begin the next phase of our multi-year strategic plan and focus on reaching positive EBITDA and cash flow in 2025. Before I review our financial expectations in more detail, I'd like to turn the call over to Mike to review our 2024 financial results.

Thanks, Justin. As a reminder, 2024's financial results include multiple corporate actions. Most significantly, the March 7, 2024 acquisition of FaZe Clan and the March 1, 2024 sale of Complexity Gaming. which have been treated as a discontinued operation in our 2024 and 2023 results. We also further divested non-core assets during the year on May 31st, 2024. As a result, we believe it's best to look at our business on a pro forma basis, which includes a full year-to-date contribution of FACE plan for both 2024 and 2023. Comparing our 2024 pro forma results to the prior year, total revenue was 102.0 million. compared to 94.8 million. The 7.6 year-over-year increase in revenue was primarily driven due to growth across our agency segment. Gross margin on a pro forma basis for the 2024 full year was 15.6 million or 15.3% of sales compared to 13.9 million or 14.7% of sales for the same period last year. We expect gross margin to improve going forward supported by a more profitable revenue mix in 2025. and additional actions underway to improve gross margin. On a pro forma basis, adjusted EBITDA loss for the 2024 full year was 19.8 million compared to a loss of 46.1 million last year, an improvement of 26.3 million. We expect that EBITDA trend will continue to improve throughout 2025 with positive EBITDA and cash flow in the second half of 2025 as Justin will outline. So with this overview, I'll turn the call back over to Justin to review our guidance in more detail.

Thanks, Mike. We expect annual pro forma revenue in 2025 of $100 million to $105 million. Our revenue guidance for 2025 does not include $27 million of annual revenue from phased media that occurred in 2024. This implies year-over-year pro forma revenue growth of at least 33%. in 2025. As I mentioned earlier, we are seeing current deals in our pipeline close across our SaaS and managed services, agency and media, and owned and operated IP assets. Momentum is strong within our pipeline, and we expect to see additional high-margin seven-figure deals announced throughout the remainder of the year. In particular, the second quarter is shaping up ahead of schedule, as we expect to sign multiple seven-figure contracts over the next two months. First, we expect to announce a deal from a major endemic sponsor for the Faze Esports Performance Center, which is also home to GameSquare's headquarters. Second, we are finalizing a multi-million dollar licensing partnership with the next generation blockchain network. And finally, we are working to close a deal with a major game publisher. If all these deals are closed over the next two months, we believe we will achieve positive adjusted EBITDA within the second quarter. Potential winnings from phase game esports during the remainder of 2025 are not included in our upside expectations for 2025. We expect a natural lift to gross margin as a result of a more profitable mix of revenue, as well as overall improvements in margin and the divestiture of phase media. For 2025, we currently expect gross margin to grow to 20% to 25% of annual sales. We expect annual cash operating expenses in 2025 to improve by approximately $15 million from cash operating expenses in 2024 of $35 million. The estimated 40 plus percent reduction in annual cash operating expenses is a result of the phase media divestiture and recent actions to reduce full year operating expenses by approximately 10%. Organic revenue combined with higher gross margin and lower operating expenses are expected to improve profitability in 2025. As we have mentioned historically, seasonality will impact first quarter revenue and profitability, but we expect improving trends starting in the second quarter, which is shaping up to be ahead of schedule. In addition, we currently expect to achieve positive cash flow and adjusted EBITDA in the second half of 2025. These are really important milestones, and I look forward to reporting on our success during the year. So with this overview, Lou, Mike and I are happy to take your questions. Operator, please open the call to questions.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Greg Gibbous with Nordland Securities. Please go ahead.

Hey, good afternoon, Justin, Lou, and Mike. Thanks for taking the questions. I wanted to just follow up on kind of your growth expectations for 2025. Could you maybe kind of highlight the primary drivers there? I mean, it sounds like world building, looking strong, SaaS and managed services as well, and then the agency business. You mentioned some pretty big deals for, you know, licensing deals for FaZe Esports. So just wanted to get a little bit more color on what gives you confidence in that outlook. Is it pretty much well-rounded? And, you know, it did sound like even though Q1 is seasonally slower, it was off to a pretty solid start. And if you could touch on that as well, that'd be helpful.

Yeah, absolutely. I can kick off and then Lou might feel free to jump in. Yeah, great. It is a really healthy mix, I think, across the businesses. Since sort of acquiring Faze Clan earlier in 2024, we've seen really impressive growth from the Faze esports business. And as you mentioned, we have two to three sort of seven-figure deals there that are either LOI stage or sort of have the verbal there. So we're moving forward really well within the phase esports business, as you mentioned. And then we're seeing a lot of sort of really healthy organic growth from our staff and managed services business, as you mentioned, and then also, you know, within our agency and experiences business, continuing to grow their relationship with Epic Games and Paramount and so forth. I think to the second part of your question, what gives us great confidence is, you know, I think, You know, many people listening will understand sort of the challenges in the market. I think what has been really pleasing is, you know, some of these deals in Q4 that we were hoping would close, you know, have started to close. They've just been a little slower to get papered and finalised, but they've either, you know, closed within Q1 or are closing within Q2. So I'd say, you know, of our sort of ambitious, you know, sort of revenue growth targets... They're not as ambitious as it may seem because a lot of that revenue is already locked in and papered and or committed. So we feel really, really good about that number. We've talked about the importance of getting to break even, certainly EBITDA positivity and then generating cash flow. But this is the first time that we've actually given guidance to EBITDA positivity and generating cash. So we have great confidence here. You know, our ability to hit these numbers, we certainly believe the back half of the year will represent that. But certainly with a couple of these deals that we are finalising at the moment, you know, Q2 may be a little better than expected. You know, we may hit this a little earlier and we certainly believe it'll be a real inflection point for us. So really healthy growth across the business. I'd say, you know, the area that's... we're probably not investing in currently as much and probably not seeing as much growth is really our media programmatic business. We've talked to this before. It is still an area of business that generates top line for us, but it is lower in margins. So I think you'll see that mix of revenue and the margins increase, but yeah, really healthy growth from SaaS and managed services, our agency and experienced business, and certainly from Phase Esports. And I think the confidence really comes from you know, verbal commitments, alloys signed, recurring revenue locked in, longer-term relationships, and certainly think that you'll see that translating to our financials this year.

Great. That's helpful, Justin. And, you know, I wanted to follow up. You beat me a little bit to it, but some incremental color, I guess, on your expectations for profitability and cash flow improvement this year. You know, it sounds like in the back half you are expecting profitability. You mentioned possibly in Q2, depending on maybe the timing of some of those seven-figure deals. You know, one, I guess, could you maybe provide kind of a little bit clarity in terms of the level of costs or expenses that are removed from the business in relation or that are kind of tied to that phase media divestiture? Sure. And, you know, kind of based on your commentary, fair to assume, you know, EBITDA positivity expected for the full year 2025?

Yeah, so if you look at sort of operating systems, we touched on it a little bit in the script. We expect in 2025, you know, our OPEX to improve by around $15 million. So obviously a material amount there is, with the reduction. Obviously, the divestiture of phased media is a part of that with the burn that existed at phased media for the year. However, we've also undertaken a project within Q1 to reduce a further 10% of OPEX. So I think you'll start to see that increase throughout the year. And yes, we believe that we will be EBITDA positive for the year, but certainly the exit run rate from Q3 and Q4 will be substantial. We've touched on the fact Q1 does represent seasonality for us. It is generally a little wider on in terms of the sort of ad brand media spend. But certainly, as kind of touched on, we think that you know, Q2 is going to be a major inflection point for us. Q3 and 4, you know, certainly representing not only sort of the justity, but positivity, but cash flow. And certainly, you know, for the year, and our exit run rate will be quite substantial. So, yeah, and it's not just, I guess, the divestiture of phased media. In terms of the reduction of OPEX, we've also taken on, you know, we had a sort of project earlier in the year to find... you know, another sort of 10% of annualized OPEX, which, you know, we've been sort of executing and pulling out throughout Q1. And I think you'll start to see the results of that, you know, certainly in our Q1 results and as touched on in our Q2 financials.

Great. Well, hey, congrats on the momentum you're seeing so far this year. I'll pass it on. Thanks for the call.

The next question comes from Jack Renderard with Maxim Group. Please go ahead.

Okay, great. Thanks for the update, guys, and thanks for taking my questions. Justin, maybe just to follow up on that, to better understand the guidance, there's a lot of moving parts here, obviously. So really robust organic growth outlook and margin upside baked into that. Just so I'm clear, the 2025 revenue guidance of 100 plus million, 100 to 105, that's all organic revenue? And is that all from continued operations only, meaning it excludes first quarter 25 from phase media?

Yeah, so I think the easiest way to think about that, Jack, is that phase media contributed $27 million to the sort of pro forma number in 2024. And I think not only certainly from a revenue perspective, which we'll touch on, but I think the areas for us of lower margin really are media programmatic business that we talked about and certainly phase media that was kind of reflecting sort of some of the burn that existed. So I do think that the divestiture certainly helps, you know, that priority that we talked about around getting to, if it's our positivity and certainly generating cash. So the mix of the revenue, I think, is also really important. But that is to represent, you know, that we believe this year that we can certainly meet or exceed the number that we hit in 2024. Obviously, the pro forma number for 2024 was $102 million, you know, of full year revenue. And certainly for 2025, we've given guys up to $100 million to $105 million in revenue without FaZe Media. So obviously you're removing the burn, but you are removing some top line, which is around $27 million in revenue for the year, which in terms of where that is coming from, we certainly expect substantial growth from FaZe Esports. I think the reality is that FaZe Media and Esports prior to us acquiring FaZe Clan, was really one P&L. And Faze Esports really didn't have a dedicated commercial team that was sort of selling specifically against the esports business. We've done that. We're doing that in terms of, you know, we've moved the esports business to the headquarters in Dallas. We're selling a sort of seven-figure naming rights deal currently. We have a number of sponsorship opportunities, licensing opportunities. We're about to launch Phase Esports' own merchandise line, and the list goes on. So we see really substantial growth from Phase Esports and certainly expecting real profitability from that part of the business. Kind of touched on it, our SaaS managed services business starting to close some major deals. I think Capcom was what we announced earlier in the year. We've made some hires in this part of the business. And we're really focusing on sort of tailored, customizable, managed services project solutions for big brands. And so I think you're going to see a number of seven-figure deals come into this part of the business, which is great, right? I think you've seen this part of the business is obviously really high margin, great recurring revenue. But it's probably been harder to scale in prior years, and that's certainly a focus for us. I think you'll see a number of really large seven-figure deals come in there that are sort of being, you know, finalized at the moment. There's a really strong pipeline there. And then, you know, lastly, I sort of touched on it a little bit, but our agency and events business, they're working hand-in-hand. we've never had, you know, more locked in revenue there. These are multi-year deals. We're continuing to grow and scale. So, you know, we certainly think that we will, you know, more than make up for that delta from the phase media business. You know, certainly, obviously, you know, $27 million, the top line is nothing to be sneezed at. But we have a lot of that already accounted for in terms you know, early wins in the year, locked in revenue, and certainly see a lot more upside, not only in accounting for that top line that we mentioned to get to the $100 million and $105 million this year without phased media, but certainly what is most important, you know, is increasing our gross margin and certainly seeing that reflect in the bottom line. So, again, it's just to reiterate, you know, guidance is $100 million to $105 million in revenue without phased media. you know, a lot of that revenue is locked in for the year. There's certainly additional upside in deals that we're working on, but, you know, we're expecting to hit profitability in the back half of the year, but certainly with a couple of these deals where we're finalizing here currently, you know, it could be sooner. We think Q2 is going to be a major inflection point for us.

Okay, great. I appreciate all that extra color, and that's definitely encouraging to hear. In terms of maybe the order book as well, I'd be curious to know, just because there's so many distinct segments here, and with phase media being removed now, what is the – do you have an order book and a pipeline kind of metrics and just sort of philosophy built out for each of your segments? So for Kings Agency and then the SaaS and advertising lines, Which of those do you have the most visibility into? And do you actually have a pipeline that goes out that extends multi-year for all three segments? Or are some of those more events-driven and, you know, as we go? Just help me understand the order book between the segments.

Yeah, for sure. So we have an enterprise sales team that is going to market as GameSquare, which is Yeah, it's really been a focus of ours over the last 12 months, and I think we're starting to really see the results. So we have, obviously, specialists within that team, but we are seeing a lot more opportunities come into the group, and I think what it does is it's taking maybe smaller, six-figure transactional-type opportunities into longer-term, seven-figure-plus opportunities that provide cross-sell across the business, right, because we're going – to brands as game square with a complete end-to-end solution and helping them solve whatever problem that might be. And whether that's data and analytics, whether it's a media need, whether it's a live campaign event and so forth, we're finding that that is really resonating. We do have specialists within the three areas and we certainly have a really robust pipeline, I would say, across those three businesses. You know, the easiest way to probably think about that, I think, as I kind of touched on within the SaaS business, you know, we've seen really healthy kind of growth year on year, nice margin business. The challenge there is how do you get to scale? I think we're solving for that. I think you'll see that this year. You know, with deals like Capcom, there's a couple of others I think you'll see sort of announced to market over the coming months that are going to, you know, really sort of pour gasoline on that part of the business. That pipeline is really strong. And we've brought in a couple of guys, Rick and Bobby and our managed services team are doing a fantastic job. We actually have a couple of other hires that we're looking at just really bolster our commercial team and continue growing there. But you'll certainly see a lot of growth there. I think our agency and events business has really worked hand in hand. So our experiences team that we touched on has really benefited from our agency team and their, you know, sort of... in-depth relationship with Epic Games, with ESPN, and what we're doing now, instead of just creating sort of strategy and content and campaigns for these brands, we're now also developing and building and producing live events. So we're seeing the combination of those business units as being really fruitful, and we expect that to continue. And then finally, Phase Esports, I think the... The secret sauce there has really just been focusing on the value that that esports business brings. I touched on it a little bit before, but prior, Faze Esports was a bit of a secondary thought within the Faze ecosystem, right? Because it was one business and a lot of the focus was really around the talent rather than the esports business. We've had a lot of success and we had a lot of growth Our commercial team really focusing on the growth of Complexity, which is a much smaller brand than FaZe Clan. We achieved 220% of revenue growth over the three years that we owned Complexity. We took it from quite a large burn to break even in that time. And we're already seeing the success of that within FaZe Clan. That is our commercial team really going out and focusing on that segment. and bringing in large opportunities. And I certainly think that our headquarters in Dallas bring a lot of commercial opportunities as well, right? We've got a lot of brands that are interested in certain programming opportunities. I mentioned the naming rights deal. We're building out a podcast studio and really a hub for innovation and content creation and there's a lot of opportunities to really monetize there as well. So overall, GameSquare, we have a really robust pipeline. I think the pleasing part of it is it's not all pipeline, right? We have more locked-in revenue than ever. And as I mentioned, I feel really confident, as we talked about, that Q2 is going to be really outsized at a major inflection point for us because of the deals that are, you know, LOI or beyond that I think we'll be able to announce the market here really soon.

Excellent. And maybe just one more. I'd like to get your thoughts. This is a big year for the gaming industry as a whole. Just any color, anything you can touch on that you see opportunities or catalysts with some of these kind of flagship launches that are coming out. We just saw Nintendo Switch come out, the latest one, and GTA is on track. Just any of these big announcements or anything in the industry that you're looking at and saying, hey, that that's an opportunity for upside or that gets you excited or that's not baked into your plan or things that are just, you know, that you're just thinking about. I'd be great to know. Thanks.

Yeah, it's a great question. I think there's been a little bit of a lull, right, in terms of, you know, new game launches. And certainly I think that this year is going to be an exciting one with GTA, as you mentioned. I think for us, the way that we're looking at it is, Opportunity, I think, is around a lot of the IP pieces. So we're continuing to provide, you know, great services to publishers and brands when they want to connect with the audience. But something that we've seen really develop for us is the opportunity to co-own IP that we can really generate, you know, incremental revenue from. And some examples of that is, NFL for the fans, right? Like a piece of IP that we own with the NFL. I think the other one is SpongeBob SquarePants is a piece of IP that we're working on with Paramount to take over the license there. From a gaming perspective, I think for us the opportunity is you know, to continue to grow that part of our business, to take advantage of things like GTA and like these metaverse-style opportunities to build out games that we can directly monetise and drive audience to rather than just providing services. I think the gaming space more broadly is probably crying out for some of these big launches, so I think it is a really exciting year, to your point there. We're continuing to see, you know... just a lot more sort of indie publishers come into the space, which I think, again, provides more opportunity, continued growth within blockchain gaming. And really, I think a major comeback for esports, right? I think there's been a lot of negative press around esports because of some of the large valuations that existed coming out of COVID. But, you know, we're seeing audience numbers continue to rise. We're seeing continued investment in, Certainly with eSports World Cup, we touched on the amount of prize money that exists, but even just more broadly and globally. So we see a big opportunity there as well. I think it's going to be a major year for the space. The numbers all indicate that. I think we're really well positioned to sort of take advantage of a lot of dollars that are floating into the ecosystem.

Excellent. Well, I appreciate the color. I guess we'll talk again in May when you report the first quarter. Thank you.

This concludes the question and answer session. I would like to turn the conference back over to Justin Kenna for any closing remarks. Please go ahead.

Thank you again. Thanks everyone for joining today's call. I think it's been a challenging period in the markets and certainly from our perspective, we're very appreciative of our shareholders and the patience that they have and have shown and And we're certainly extremely bullish that 2025 is a major inflection point for our business. You know, we touched on the fact that, you know, we've really cleaned up our balance sheet, you know, and that we are really knocking on the door here of profitability, which, you know, I think we haven't sort of shied away from the fact that we know that that is, you know, extremely important and, again, sort of a major inflection point for us as a business. So we're certainly looking forward to getting a few of these announcements out to the market. We're certainly looking forward to continuing to sort of get some runs on the board here and certainly share with you our progress throughout 2025 and provide, you know, a lot of value to shareholders. So just want to really genuinely thank everybody for their support and, again, Yeah, we're really excited for 2025 and what's ahead for GameSquare. So thanks, everybody.

This concludes GameSquare's 2024 fourth quarter financial results conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.