Esports and poker operator Allied Gaming & Entertainment talked up the potential of further growth after an increase in revenue in Q2, following a major restructure of the business late last year.
Details of the initiative were revealed in December 2022, including restructuring the existing esports business. Allied also widened its focus to include a broader array of entertainment and gaming products and services.
In addition, the business rebranded from Allied Esports Entertainment to reflect its new direction.
Q2 was the second full quarter since the restructure, with Allied reporting both a rise in revenue and a decline in net loss. President and CEO Yinghua Chen said this was partly due to the changes rolled out as part of the restructure.
New subsidiaries, new markets
These included the establishment of new subsidiaries Allied Mobile Entertainment (AME) and Allied Experiential Entertainment (AEE). AME is focused on the mobile games market, while AEE operates within entertainment live events, experiential entertainment venue operation, management and consultation.
According to Chen these two subsidiaries have allowed, and will continue to allow, Allied to pursue a wide range of strategic opportunities.
“We expect that AME and AEE Entertainment will enable us to break into new markets, creating additional revenue streams and enhancing our financial performance within the next 12 months,” Chen said.
“This restructuring aims to optimise our resources and provide investors with greater clarity on our business outlook and direction.”
Multiplatform content drives revenue growth at Allied
Looking at Allied’s Q2, revenue in the three months to 30 June was $3.3m (£2.6m/€3.0m), up 182.3% from $1.2m in the previous year.
Of this total, $2.0m came from Allied’s multiplatform content operations. This was 6,927.8% higher than 2022’s figure, driven by the release of the second season of the “Elevated” content series.
In-person revenue also increased by 18.2% to $1.1m during the quarter, helped by a new naming rights agreement for one of Allied’s venues.
Net loss slashed in Q2
Operating costs were 2.1% lower at $4.7m in Q2 while increased interest led to an additional $704,013 in income. As such, quarterly pre-tax loss was $691,218, a significant improvement in $3.7m last year.
Allied did not pay tax, nor did it note any foreign currency translation adjustments. As such, net loss for the quarter was $691,218, in contrast to $3.8m in 2022.
In addition, Allied noted adjusted EBITDA for the quarter improved from a loss of $2.7m to a $1.1m loss.
Allied net loss more than halves in H1
Turning to the first half, revenue in the six months to 30 June hit $4.5m, up 25.0% year-on-year. This included $2.5m worth of in-person revenue and $2.0m multiplatform content revenue.
Operating costs were cut 22.0% to $8.5m and Allied noted a further $1.5m in additional income. This left a pre-tax loss of $2.6m, compared to $7.4m in 2022.
After accounting for minimal foreign currency translation adjustments, net loss remained at $2.6m. This was less than half the $7.5m loss posted in the previous year.
In addition, adjusted EBITDA improved from a loss of $5.3m to negative $3.2m.
“We’re very excited about the remarkable progress we have made and the opportunities that lie ahead,” Chen said.