East Side Games Group Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Eastside Games Group second quarter 2024 results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session for analysts only. I would now like to hand over the conference over To your speaker today, Jason Bailey, board chair, CEO, and founder of Eastside Games Group. Thank you. Please go ahead.

Thank you, operator, and welcome, everybody, to the Eastside Games Group Q2 2024 results call. On the call with me today is Mr. Jason Chan, our interim chief financial officer. We are also joined by our chief operating officer, Ms. Lisa Sheck, and our chief product officer, Mr. Jim Wagner. I am happy to share highlights from the second quarter ended June 30th, 2024. Mr. Chan will go into details on our financial results commentary for the period before turning it over to Mr. Wagner and Mrs. Check for some final remarks before we open it up to analyst questions. First, I'd like to remind you that certain statements made on this call are forward-looking within the meaning of applicable securities laws. This call includes references to non-GAAP measures. Please refer to our second quarter press release in MD&A for cautionary statements relating to the forward-looking information and reconciliations of non-GAAP measures to GAAP results. References to all figures are in Canadian dollars on an IFRS basis unless otherwise noted. Additional materials can be found in the investor section of our website at www.eastsidegamesgroup.com. under the Financial Information section, and an audio replay of this call will also be available on our website. I'll now pass it to Mr. Jason Chan, our Interim Chief Financial Officer, for comments.

Thank you, Jason. This quarter, we made strides in incrementally growing our new match titles while maintaining the profitability and stability of our existing live ops games. Q2 saw us end at a revenue of $20.5 million, flat from Q1 with an adjusted EBITDA of $2.5 million. which is at over 12% margin and represents our seventh consecutive quarter with an adjusted EBITDA of $2.5 million and over. Year-to-date, this puts us at $6.6 million adjusted EBITDA, which is a 16% margin and a 25% increase year-over-year. We've also increased our user acquisition spend by $900,000 from $4.8 million in Q1 to $5.7 million in Q2, with almost all of it going towards our Match 3 titles, including Cheech and Chong Cush Kingdom, which launched in May, and Budmatch. We will continue to sustainably increase the top line in all of our titles whenever opportunities arise. Our average daily active users for Q1 was 229,000, with a stickiness rate of 26%, which is consistent with last quarter. If we segment our users between idle and match games, idle users saw an increase of ARPDAL from $1.11 in Q1 to $1.16 in Q2, a 4.5% increase, while our match users have increased from $0.49 in Q1 to $0.56 in Q2, a 14% increase. On the idle side of the business, we continue to optimize our monetization and long-tail revenue. Notably, we achieved the highest single-day ARPDAU since the end of the pandemic lockdowns in 2022 for both Bud Farm Idle Tycoon and Trailer Park Boys Greasy Money. had a consistent uplift of about 20% to the ARPDAU for Cheech and Chong's bud farm across the quarter, and even set another lifetime record single-day ARPDAU for the office somehow we manage. In the match genre over the past year, we've also made strides and improvements in growing our ARPDAU from a previous average of $0.20 per day to more than $0.50. In addition, with the launch of our biweekly season passes, we have seen ARPDAUs in excess of $0.60 as well. The results show that we are successfully applying our past learnings to monetizing and developing best practices in the match genre. In Q2, as part of our renewed NCIB, we've also spent $137,000 purchasing 172,000 shares. To date, we hold 1.4 million shares cumulatively at a cost of $1.1 million from our cash. Despite spending $1 million more this quarter on user acquisition and $138,000 on our NCIB, Our cash on hand at June 30th ended at $7.6 million, a 4.8% increase from last quarter and 171% up year on year. We will continue our focus of not only growing sustainably, but also being a profitable cash-generating company as we march towards our goal of having $10 million accumulated in the war chest by end of the year. Thank you for your continued support. And with that, I will now pass it off to our Chief Product Officer, Mr. Wagner.