Esports Entertainment Group FY23 paves path to growth
Esports Entertainment Group (EEG) has achieved a significant turnaround in its financial performance for the fiscal year 2023. In a recently released business update, EEG reported a remarkable narrowing of its net loss, reducing it to US$32.3 million, which represents a substantial improvement from the previous fiscal year.
Net loss reduction
One of the most striking changes in EEG’s financials was the reduction in its net loss. In the fiscal year 2022 (12 months ending on June 30, 2022), the company had reported a net loss of US$102.2 million. In FY23, this figure was significantly reduced to US$32.3 million. This remarkable reduction can be attributed to several strategic measures undertaken by the company.
New business direction
EEG has restructured its operations, leading to a shift in its revenue sources. The company has strategically offloaded many of its previously owned assets, allowing it to concentrate more effectively on the burgeoning esports sector. While this shift resulted in a drop in revenue from US$58.4 million in FY22 to $23 million in FY23, it also allowed EEG to reduce its costs dramatically.
The cost of revenue fell from US$24.2 million in FY22 to just US$8.8 million in FY23. Sales and marketing expenses were trimmed from US$25.7 million to US$5.9 million over the same period. General and administrative expenses also saw a significant reduction, dropping from US$51.3 million to US$28.9 million. These cost-cutting measures played a crucial role in the substantial reduction of EEG’s net loss for FY23.
EEG reported $23m in FY23 compared to $58.4m year-on-year, The cost of revenue reduced this year to $8 million from $24.2m for the same period last year. Expenses for marketing reduced from $25.7m in 2022 to $5.9m year-on-year. Admin expenses reduced to $28.9m in 2023 from $51.3 in 2022. The company’s net loss reported for FY23 is $32.3m, compared to $102.2m year-on-year. (Source: SiGMA)
Esports and iGaming initiatives
EEG’s latest business update also underscores the company’s renewed focus on the esports industry. EEG is actively developing initiatives to expand its esports and iGaming offerings, aiming to create a comprehensive, end-to-end online betting platform for its customers.
CEO Alex Igelman stated that these efforts align with their vision of positioning the company at the forefront of the rapidly growing esports wagering market, which is projected to expand significantly by 2025.
To further solidify its presence in the esports and iGaming sectors, EEG has expanded its partnership with esports betting solution provider Oddin.gg. This partnership involves the integration of Oddin.gg’s iFrame solution into EEG’s iGaming platform, set to be completed in Q1 2024. This integration will enable EEG to offer a wider range of esports betting markets to its customers, including traditional esports events, seasonal tournaments, and short-cycle wagerable events.
In addition to this partnership, EEG subsidiary ggCircuit has joined forces with Ghost Gaming and Skillshot Media to establish a unique Scholastic Esports Innovation Centre within the Ghost Gaming HQ lab. This center is dedicated to pioneering research and developing cutting-edge technology tailored to the evolving needs of school esports programs.
Igelman concluded by expressing his confidence in EEG’s financial position and global expansion strategies, stating that he couldn’t be more excited about the company’s future. With these bold initiatives and a focus on the growing esports wagering market, Esports Entertainment Group is poised for a promising journey ahead.
Esports Entertainment Group, Inc. (GMBLP) is currently trading at $4.75, reflecting a stable market position.
