Esports and poker operator Allied Gaming and Entertainment slashed net loss by more than half during its 2023 financial year following a reduction in spending across several areas.
Revenue in the 12 months to 31 December 2023 was 15.6% higher at $7.4m (£5.9m/€6.9m). This, coupled with lower costs, allowed net loss at Allied to fall significantly.
The group operates three core divisions in Allied Esports International (AEI), Allied Mobile Entertainment (AME) and Allied Experiential Entertainment (AEE), with a core focus on the esports market.
Allied owns a series of global properties, runs live events and offers production services across the esports sector. It counts HyperX Esports Arena Las Vegas as its flagship venue, while also running the Allied Esports Trucks 18-wheel mobile gaming arenas.
CEO Yinghua Chen praised the “substantial” progress Allied made during 2023. This includes the acquisition of a majority stake in mobile games developer Beijing Lianzhong Zhihe Technology, which completed in August.
This, Chen said, places Allied in a strong position for further growth in 2024 and beyond.
“We made substantial progress during fiscal year 2023 and have entered fiscal year 2024 in a position of strength,” Chen said. “AEI, AME and AEE are all poised for growth as we execute on our strategic objectives this year.
“With Beijing Lianzhong Zhihe Technology now integrated into our business, AEE finalising events and expanding its presence in Asia and the continued demand we have for our AEI properties and content, we are extremely excited for the year ahead and very confident in our path forward.”
Allied net loss down to $3.6m
Taking a closer look at the 2023 results, in-person activities remained the primary source of revenue at $5.0m. This was level with the previous year.
Revenue growth was driven by other operations within the business. Multiplatform content revenue hiked 42.9% to $2.0m, while casual mobile gaming generated $698,522, whereas in the previous year this was not part of the Allied business.
As for spending, total costs and expenses across the business were 21.0% lower at $14.3m. This was helped by a 29.6% drop in general and administrative expenses – Allied’s main outgoing – to $7.6m.
Lower spending resulted in a lower operating loss of $6.6m, compared to $11.8m in 2022. However, bottom line was improved by other income helping reduce overall loss.
Expense income reached $46,684, while interest income amounted to $3.0m. As such, this left Allied with a net loss of $3.6m, in contrast to the $10.8m loss posted in the previous year.
In addition, adjusted EBITDA loss improved from $8.6m in 2022 to $4.6m.
Positive end to 2023
Full-year growth was helped by a strong finish to 2023, with Q4 proving successful for Allied.
Revenue in Q4 was some 75.0% higher at $2.1m. Again, this was driven by the impact of the Beijing Lianzhong Zhihe Technology acquisition, with this generating an additional $698,522 in casual mobile gaming revenue.
Total costs and expenses were marginally higher year-on-year at $4.0m. However, revenue growth meant operating loss was reduced from $2.7m to $1.9m.
Other income totalled $30,730 and interest income $792,103. This resulted in a bottom-line net loss of $1.1m, an improvement on $1.7m in 2022.
As for adjusted EBITDA loss, this was reduced from $1.7m in the previous year to $1.2m.
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