East Side Games Group Inc.

Hello, I'm Jason Bailey, founder and CEO of Eastside Games Group. Today we're going to go over our Q3 2024 results. I want to remind you that this is a forward-looking statement and the disclosure is available here. I'm sure every single one of you have read it, agreed to it, and understand it. But today we'd like to get into some of the exciting things that have been happening in Q3 and talk about the future of Eastside Games Group and some of the things that have happened over the last quarter and over the last year. I'll be joined by various people from the company to explain and go deeply into those things. Firstly, we'll introduce our CFO, Jason Chan, who will give us all the financial highlights, as well as Jim Wagner, our Chief Product Officer, Lisa Schack, our Chief Operating Officer, and a few other people from within our organization.

Hello, everyone. I'm Jason Chan, Chief Financial Officer of Eastside Games. We built on the momentum of Q2 of the launch of Power Rangers Mighty Force back in August, and I'm happy to report that we're going to post our first growth quarter of the year, ending at a top line revenue of $21.4 million, which is a 3% growth year-over-year and a 4% growth quarter-over-quarter. We've also ended the quarter with $2.56 million in adjusted EBITDA, which is a 12% margin, and our eighth consecutive quarter posting a profit of $2.5 million and over. The metrics of the core portfolio in the business continue to be healthy and strong going into Q3. We have an average daily active user count of 236,000 players, a stickiness rate of 24%, and an ARPDAU, an average revenue per daily active user, of $0.99. The goal here is to continue to focus on profitability within the existing portfolio and to make sound investments in our user acquisition with aggressive payback windows to ensure that the growth we do get is both profitable and sustainable. We continue our efforts to accumulate cash and end at Q3 with a balance of $8.3 million in the till. This is the highest balance we've had since Q2 of 2022 and represents an 11% increase versus Q2's cash balance. We also have zero debt on top of that. We see this as a significant amount of dry powder that we can use to invest in our future games as well as ourselves as a company. We're going to start deploying this capital in the coming quarters as we launch new games down the pipeline in 2025. and to also bolster our share buyback program. And on that note, I'm gonna pass it back to Jason.

Over the last two years, Eastside Games Group has invested heavily in repurchasing our own chairs through our NCIB. We think we're severely undervalued, that the market doesn't understand what we are and what we're doing and what an incredible opportunity this is. And granted, it is our responsibility to educate the market and get that message out to people. But that being said, there is a tremendous opportunity for those who do understand the strength of what we're doing and the opportunity that we have here. And at the current quote in the market, we think it's ridiculously undervalued and that the best thing we can do with our cash is buy ourselves back. By buying our shares back at this price, it's been a sacrifice to our cash balance, but we think that is a safe bet as we know the strength of ourselves. By taking available shares out of the market, it reduces our float and hopefully over time will increase the value of this company and increase its market cap. But most importantly, it allows us to have even more strength and autonomy over what we do and to capitalize for ourselves the strength of the company and arbitrage that against the stock price, which is not where it should be. In 2024, using our NCIB, we've been able to buy over 2 million of our shares back. We bought them at an average price of 66 cents. The cost of that is to our cash balance. So since we started our NCIB two years ago, we spent just over $2 million repurchasing shares. So with our current cash to date, plus our NCIB costs, our cash balance would be well over $10 million. Our goal is cash production to increase our dry powder to have that treasury as high as possible so that as new opportunities come along, we're able to jump on them. one of our biggest opportunities for 2025 is rupaul's drag race match queen so having approximately 10 million dollars available to us to market and grow and and take advantage of the launch of that game is very very important to us so we continue to grow that cash balance at the same time we're always going to buy back our shares at the best possible price i'm jim wagner chief product officer