East Side Games Group Inc.

Ladies and gentlemen, thank you for standing by. And welcome to the Eastside GAINS Group third quarter 2025 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 to the speaker today, Jason Bailey, Board Chair, CEO, and founder of Eastside Games Group. Thank you. Please go ahead.

Hello and welcome everyone to the Eastside Games Group Q3 2025 earnings call. I'm Jason Bailey, Board Chair and CEO of Eastside Games Group. Today we will share highlights from the third quarter ended September 30th, 2025. I'd like to remind you that certain statements made on this call are forward-looking within the means of applicable securities laws. This call contains references to non-GAAP measures and please refer to our fourth quarter press release and 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 and must otherwise notice. Additional materials can be found on the investor section of our website at www.eastsidegamesgroup.com under the financial information section. Q3 was another solid quarter with another consecutive queue of revenue growth. We launched two new match titles that are driving strong engagement and laying a solid foundation for continued growth in this new genre for us. As of the end of Q3, Matt is accounting for 22% of our total revenue. The team will now provide further insights and details. First up is Mr. Chan. Thank you, Jason.

Hi, everyone. I'm Jason Chan, interim CFO of Eastside Games. Today, we report our results for the company's third quarter and year-to-date periods ending September 30, 2025. As a reminder, all amounts provided are in Canadian dollars. Our total revenues for the three nine-month periods ended September 30th was $20 million and $57.8 million, respectively. Revenue for the third quarter decreased by $1.3 million, or 6%, compared to Q3 of last year, and increased by $800,000, or 4% sequentially, compared to Q2. Excluding one-time publisher payments, revenue growth would have been 12% sequentially quarter over quarter. As a reminder, this quarter reflects our first quarter of the newly launched RuPaul Match and only one month of Squishmallows Match, where we've invested heavily into scaling the player base for these two games, as we have seen strong payback windows and retention numbers. This quarter represents peak spend, where we are aggressively acquiring users and spending on marketing within disciplined return criteria to grow these games. We have confidence that this spend will return in the next two to three quarters, and then we'll generate sustained cash flow thereafter as we start to harvest and fully monetize these retained users for years to come. These top line results also reflect stability in our core game portfolio and growth in our new game launches in the second half of 2025. We continue to see stability in our core game portfolio with mixed performances across titles and good investment opportunities in BFIT, Milk, and Cheech Kush. We finished the quarter with a daily active user count of 227,000 players, which represents an increase of 12% quarter over quarter. ARPDAU was $0.97 over the same period, which represents a decrease of 6% as a result of the influx of new users from the new game launches. Our priority remains to efficiently scale our two new game titles for the remainder of 2025 and beyond. Adjusted EBITDA for the three 9-month periods ended September 30, 2025 were $-$3 million and $600,000 respectively, compared to $2.5 million and $9 million respectively for the same period ended 2024. This represents a decline of $5.5 million in the comparable period in 2024. This decline can primarily be attributed to the development, launch, and marketing spend associated with the launch of RuPaul Match and the Squishmallows Match titles. As mentioned previously, we made a significant and strategic investment in our Match portfolio this quarter, allocating roughly 60% of our total marketing spend to support its future growth, including new supplemental marketing initiatives like TV ad placements, where we have seen the strongest returns on our investment. We expect to see these investments return in the next two to three quarters, And it is our belief that at the current time, this quarter represents a trough in our adjusted EBITDA margins with the existing portfolio of games as we look into Q4 and 2026 and realize the returns on these acquired users. Future spend on these titles could remain elevated if we continue to see attractive returns. As a reminder, our core studio portfolio profitability remains consistent and stable. The company had $3.2 million in cash and $2 million in debt as of the end of the third quarter 2025 for a net cash position of $1.2 million. The company continues to generate cash flow from its core portfolio that is being used to support the launch and future growth of the new game titles as previously mentioned. Accordingly, with the company's strong cash generation from operations in the core portfolio and available financing, the company continues to be well positioned to execute on further growth opportunities to provide further value for our shareholders. We will continue to repurchase our shares through the NSIB program, adhering to the exchange restrictions. In Q3, we bought back 147,000 shares and cancelled 168,000 shares. And to date, we have acquired and cancelled a total of 4.5 million shares and it cost us $3 million dollars. We're going to continue to balance investing in the future growth of the company. We're returning capital to the shareholders via the share buybacks, as we believe the market is currently undervaluing our shares. I will now pass things off to our chief product officer, Jim Wagner.