In a recent strategic update, Esports Entertainment Group (EEG) revealed its activities and financial highlights for the fiscal year, offering insight into the company’s journey towards stability and growth.
The financial year ending on June 30th was a challenging one for EEG, following a tumultuous 2021. By October 2022, the company’s future appeared uncertain as it grappled with defaulting on $35.0 million in convertible notes issued in the previous year. December brought further uncertainty as EEG contemplated exiting the iGaming industry and saw the departure of former CEO Grant Johnson. The same month, EEG narrowly avoided delisting from the Nasdaq stock exchange.
January 2023 witnessed more significant changes, with Daniel Mathews resigning from his positions as CFO and COO. In that same month, former CEO Johnson initiated a legal action against EEG, alleging that his dismissal had violated his employment contract.
EEG made headlines in February when it announced the sale of its Bethard online casino and sportsbook business for €9.5 million. April saw a new CEO, Alex Igelman, step in to lead EEG. Under his leadership, the company outlined plans for B2C expansion, confirmed divestment strategies, and agreed to convert a substantial portion of its debt into company stock.
In terms of financial performance, EEG’s fiscal year 2023 brought both challenges and promising developments. Total revenue for the year amounted to $23.0 million, a decrease from the previous year’s $58.4 million. However, the cost of revenue saw a significant decline, falling by 63.6% to $8.8 million.
Notably, sales and marketing expenses were reduced by 77.0% to $5.9 million. General and administrative expenses also saw a decline, totaling $28.9 million, a 43.6% reduction. The net loss for the year was $32.2 million, marking a substantial improvement compared to the $102.2 million loss recorded in EEG’s 2022 financial year.
Alex Igelman, EEG’s CEO, emphasized that the company had undertaken a series of strategic decisions aimed at bolstering its position in the market. He stated, “Over recent months, the company has undertaken a comprehensive examination of our organization, focusing on the anticipated trajectory of the esports and iGaming sectors. Through this process, we conducted a deep dive into our business from top to bottom, identifying operations and contracts that weren’t profitable. This led to decisive actions that have positioned us for a promising future.”
Igelman acknowledged that the restructuring had incurred one-time expenses but expressed confidence that the long-term benefits would far outweigh these costs. He anticipates a $4 million reduction in annual operating expenses going forward and noted that the company has reduced total liabilities by an estimated $51.8 million since January.
Strategic Focus on the Future
Igelman also detailed EEG’s renewed focus on initiatives related to esports and iGaming offerings, expressing optimism for the company’s future. “Overall, we believe the company-wide initiatives we have undertaken this year will place us in a stronger financial position and at the forefront of the rapidly growing esports wagering market, which is poised to grow significantly by 2025,” he said. “As a result, I could not be more excited by the outlook for our business.”
Esports Entertainment Group’s strategic repositioning and financial turnaround signal a hopeful future for the company, as it continues to navigate the dynamic esports and iGaming landscape.
Last Updated on October 29, 2023