GameSquare Holdings, Inc.

Good afternoon, and thank you for joining us for the GameSquare Holdings 2025 third 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 would like to remind everyone that certain statements in this call may be forward-looking in nature. These include statements involving known and unknown risks, uncertainties, 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 refer to our 10Q for the quarter ended September 30, 2025, 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. As we have mentioned on prior calls, 2025 is a defining year for GameSquare as we pursue a strategic transformation that we believe will mark the foundation of our next phase of long-term growth. While much of this progress has taken place behind the scenes, Our third quarter financial results demonstrate that Gamesquare has never been in a stronger strategic, operational or financial position. Over the past year, we have executed a deliberate strategy to optimise our business model, rationalise our portfolio and build a differentiated end-to-end platform that is both scalable and resilient. Significant actions during the year include divesting our remaining staking phase media, winding down frankly media, and acquiring click management. Taken together, these operational moves have sharpened our focus, improved efficiency, and created a more powerful and unified platform that is purpose-built to scale with multiple durable revenue streams working together. Simultaneously, we have fortified our financial foundation. With the launch of our digital asset treasury strategy in July of 2025, we've successfully raised approximately $18 million to invest in a yield-focused Ethereum model. This strategic initiative enhanced our balance sheet, unlocked scalable treasury yield, and accelerated our Web3 market growth. Our digital asset treasury strategy is a critical milestone that underscores our belief in deploying innovative financial approaches that drive long-term shareholder value. While our transformation is ongoing, we believe our third quarter results are an important inflection, showcasing the financial opportunity of GameSquare's model. I'm confident we are entering the next chapter of GameSquare's growth, supported by a stronger platform, sharper strategy, expanding our TAM, and a fortified balance sheet. So with this introduction, I want to review our operating performance, the click acquisition, and our treasury management strategy. Our priorities this year remain focused on achieving profitability, streamlining operations and driving higher margin revenue opportunities across our core media technology and esports businesses. During the third quarter, there were several important actions we took to execute against our 2025 operating plan. First, Gross margin for the third quarter expanded sequentially by 20 percentage points to 49.4%, and is up even more when compared to the second quarter gross margin of 15.3%, when including frankly. This supports our efforts to improve profitability in the back half of the year, and we reported a pro forma EBITDA loss of approximately 200,000, when including a full quarter of click, compared to a loss of 3.5 million in the second quarter. I'm pleased to report that GameSquare reported $5.9 million in net income from continuing operations in the third quarter of 2025. Improvements to profitability reflect the second quarter divestiture of FaveMedia the wind down of Franklin Media in the third quarter of 2025, and the recent launch of our DAP strategy. As we noted in September, we discontinued the operations of Franklin Media, a legacy programmatic advertising solutions provider. The closing of Franklin reflects our strategic shift towards optimising our business model by exiting non-core, lower-margin operations. This decision also aligns with our goal of eliminating operating losses and cash burn while concentrating on high-growth areas such as agency, media, and technology. In addition to divesting phased media and discontinuing, frankly, we also consolidated Sidekit, a technology-enabled CRM solutions provided to brands and marketers into Stream Hatchet, a business intelligence suite that offers game publishers, brands, and IP holders with unparalleled insights to navigate the complexities of the emerging content form. The consolidated business provides a comprehensive offering of technology and managed services to global brands, game publishers and marketers. The consolidation is expected to reduce annual operating expenses of $1.25 million. During the third quarter, we acquired Qlik Management, a leading talent management firm founded in Australia with a growing US presence. Regularly named as one of the top digital creator agencies by Business Insider, and recently awarded Best Talent Management Agency by industry body AIMCO, Click closed over 545 commercial deals globally in 2024 with an annual revenue of $12.4 million and has assembled one of the largest English-speaking gaming rosters with approximately 75 active talent. For the second half of 2025, Gamescore expects Click to contribute $14.5 million of annualised pro forma revenue and approximately $1.2 million of annualised pro forma EBITDA. In addition, the company expects revenue and cost synergies to materially increase Qlik's EBITDA contribution for the remainder of 2025 and 2026. Talent is at the core of today's creator economy, and bringing Qlik into the Gameswear family accelerates our long-term strategy. Together, Gameswear and Qlik will expand the company's reach into creator-led brand partnerships and activations, accelerate both opportunities within Gamesquare's media agency and experiences ecosystem, and drive immediate cost and revenue synergies by integrating Qlik through our Gamesquare's existing platform. Qlik is quickly contributing to our revenue growth and profitability, and I look forward to providing more updates on Qlik's success in future calls. Gamesquare has created a differentiated end-to-end platform with an ecosystem of assets that now includes data and analytics through Stream Manager, a talent network through Qlik, agency services through Zoned and Gamescore Experiences, and owned and operated IT through Faceplan Esports, as well as partnerships with Paramount, Barnes & Noble College, and The Boys. We believe this differentiated and end-to-end platform enables deep partnerships with top game publishers and global brands. Our reaching to gaming and Gen Z audiences is unmatched. And as brands compete to share in a challenging economic environment, we are confident in our ability to grow organically, supported by recent partnerships and a robust sales pipeline. Highlights during the third quarter include... Dream Hatchet was named the official data and insights partner for the 2025 Esports World Cup, and they signed a new managed services contract with Ubisoft. Gamesquare Experiences produced a 2025 100th year summer block party. Zone launched a Fortnite Got Milk with Dairy Max campaign. FatePay Esports expanded its record sponsorship deal with Rollbit. And Game Square was named the agency of record for the World of Dance and Anime Coin Foundation, as well as new partnerships with REC Brands and Barnes & Noble College. These wins, plus many more, demonstrate the growing value of our commercial relationships, audience reach, and product offerings. Partnerships with Rollbit, Anime Coin, and REC Brands also reflect the initial success of our web-free growth strategy, as crypto-native partners value our audience, access, and our creative capabilities. This quarter also marks the first period where our results reflect the digital asset treasury strategy launched on July 1, 2025. Our goal is straightforward, to build one of the most sophisticated yield-generating Ethereum treasuries of any public company, and to do so alongside a high-performing operating platform. Unlike pure crypto plays, our model is designed to compound value while buffering against volatility. We are pursuing a three-pronged crypto native growth strategy, which includes, one, an Ethereum-based treasury strategy through Dialectic's on-chain yield platform, in which we're generating above-market yields month on month. Two, a financialised art and culture strategy that looks to acquire culturally significant digital assets that we can also generate yield on. And three... And finally, a Web3 operating strategy leveraging GameSquare's creative agency and esports businesses to help crypto-native organizations grow global audiences while also adding high-potential digital assets and yield opportunities to our treasury. Our gap strategy is focused on driving above-market yields, and as the program matures, we continue to expect to reach high single-digit figures. The cash flow and appreciation from our yielding strategies are intended to fund additional e-purchases, return capital to shareholders through buybacks, and reinvest in our operating business, creating a self-reinforcing cycle of growth across both pillars of our company. We've built a dedicated on-chain platform supported by best-in-class infrastructure and guided by proven leaders in the crypto and DeFi space. This includes the team at Dialectic, who bring deep expertise in structuring, managing, and optimizing institutional-grade on-chain portfolios. Our strategy is also supported by seasoned advisors, such as Ryan Zura of Dialectic, Robert Leshner of Superstay, and Ryden Lee of Goff Capital, all of whom have been instrumental in refining our portfolio construction, risk management, and yield generation strategies. This platform allows us to actively manage our ETH holdings in real time, identify high conviction opportunities and move capital efficiently across strategies. Importantly, the systems we put in place are built to scale, enabling us to increase capital deployment as our treasury grows while maintaining robust oversight and compliance controls. Although still in its early days, our on-chain strategy has already begun to generate meaningful results with over $600,000 of yield in the last two months of the quarter. At the end of 2025, at the end of the 2025 third quarter, we held 15,618 ETH with an original cost basis of $55.5 million, almost all of which was in our on-chain yield strategy with Dialectic, with an unrealised gain of ETH of $9.3 million in the third quarter. We own eight crypto coins for a total value of $6.9 million, which we expect to start contributing to our yield strategy here in the fourth quarter. And we own $3.8 billion of altcoins, primarily in Animate and Retcoin. Recent efforts to support our digital asset treasury strategy have also helped improve our balance sheet. At September 30, 2025, we had approximately $82 million of cash in digital assets, no debt outstanding, and shareholders' equity of $79 million. Our balance sheet has never been stronger. And we also reduced our accounts payable to $18 million at September 30, 2025, compared to $27 million at December 31, 2024. We started allocating the proceeds of our yielding strategies to buying back our stock. On October 3, we announced the repurchase of 833,124 shares at an average price of approximately $0.72. Following this transaction, we have $4.4 million remaining under our current authorisation. Given the current stock price, we intend to continue to use funds generated by our Treasury strategy to opportunistically repurchase our common stock. As you can see, GameSquare has never been in a stronger financial position. This strength provides significant flexibility to pursue strategic initiatives, invest in our operating platform, and return capital to shareholders. Before I turn the call over to Mike, I want to review the progress of our annual meeting and shareholder vote. Since the July 2025 stock offerings, many of Gamesco's shareholders are new and include retail and foreign holders. This has created a difficult environment to get shareholders to vote. I want to stress to shareholders listening today that your vote is important, no matter how many shares you hold. In addition, it is important to note that our challenge is getting shareholders to vote. In fact, shareholders who have voted have currently voted in favour of our proposals by a wide margin. We just need more shareholders to vote in order to reach a quorum. Our third quarter performance demonstrates that our transformation is real and is gaining momentum. Every structural upgrade, every acquisition, every divestiture is calibrated to create real shareholder value. But the contingent success of our long-term strategic plan is contingent on governance that is modern, agile, and ready to guide a company. By voting for our director nominees and proposed resolutions, you are endorsing a bold future. You enable a streamlined corporate structure capable of faster decision-making. You validate the leadership team's vision. You ensure we have the flexibility to pursue capital raises, strategic partnerships, and growth initiatives without encumbrances. ISS, an industry-leading independent proxy advisory firm, has recommended that GameSquare shareholders vote for the company's four proposals. Insiders and major shareholders, including the Jones & Goff families, members of management and board, Ryan Zura and Robert Lesher, have all voted in favour of the company's proposals, demonstrating their continued confidence in the company's strategy and long-term potential. We are entering a new chapter of Game Square. The click acquisition accelerates our access to top-tier talent and brand relationships. Corporate simplification and governance modernization pave the way for smarter capital allocation and greater strategic optionality. Our cash and on-chain reserves gives us the strength and optionality in uncertain markets. Together, we will build a game square that is nimble, profitable, and positioned to dominate at the frontier of gaming, creators, media, and on-chain innovation. So with this overview, I'd like to turn the call over to Mike to review our 2025 third quarter financial results. Mike.

Thanks, Justin. Our reported results for the third quarter reflect the wind-down of Frankly, approximately three weeks of clicks results, and the contribution of our on-chain yielding strategy. Comparing our 2025 third quarter reported results to the prior year, total revenue was 11.3 million compared to 9.3 million. The 22% year-over-year increase in revenue was primarily driven due to growth across our technology, agency, and owned and operated IP segments. Reported gross margin for the 2025 third quarter was 5.6 million, or 49.4% of sales. compared to 4.2 million or 45.3 percent of sales for the same period last year. The 4.1 percentage point improvement in gross margin reflects ongoing efforts to improve profitability in the initial contribution of our debt strategy. In addition, reported gross margin was materially higher than the 15.3 percent we reported for the 2025 second quarter, which included, frankly, and demonstrates the powerful adjustments we have made to our financial model. Adjusted EBITDA loss for the 2025 third quarter was $0.6 million compared to a loss of $0.9 million for the same period last year, and a total loss of $3.2 million for the 2025 second quarter, or $3.5 million for the 2025 second quarter as historically reported, which included, frankly. Higher profitability and gains from our DAT produced $5.9 million in net income from continuing operations compared to a net loss of $3.9 million for the same period a year ago. On a pro forma basis, which includes a full quarter contribution from Qlik management, revenue was 15.5 million, and pro forma adjusted EBITDA loss was 0.2 million. We believe the pro forma improvements to sales and EBITDA demonstrate the progress we're making getting to scale and improving profitability. At September 30, 2025, we have cash and cash equivalents and debt assets of 81.5 million. During the third quarter, we used our robust liquidity to eliminate all outstanding debt. We have also reduced accounts payable by 8.9 million, or 33% from December 31, 2024, primarily due to elimination of legacy payables associated with prior acquisitions. We ended the quarter with 78.7 million of shareholders' equity compared to 12 million at the beginning of the year, which reflects the success of our July equity offerings. As you can see, GameScore has a strong financial position with excellent liquidity to pursue strategic initiatives, invest in our operating platform, and return capital to shareholders. So with this overview, I'll turn the call over back to Justin.