Engine Gaming And Media (GAME) Stock: Why The Price Surged Today

By Amit Chowdhry ● Nov 24, 2021
  • The stock price of Engine Gaming and Media Inc (NASDAQ: GAME) increased by over 50% pre-market today. This is why it happened.

The stock price of Engine Gaming and Media Inc (NASDAQ: GAME) – an esports/sports social gaming, commerce, and next-generation media solutions company – increased by over 50% pre-market today. Investors are responding positively to the company’s fourth quarter and fiscal year 2021 financial results.

These are the highlights:

— For the year ended August 31, 2021, total revenue was $37.2 million, up from $10.5 million in FY 2020, an increase of 253% YoY. Total revenue for FY Q4’2021 was $11.8 million, up from $7.0 million in FY Q4’2020, an increase of 67% YoY, and 22% higher than sequential FY Q3’2021 of $9.6 million.

— For the year ended August 31, 2021, net loss was $40.7 million, an increase in net loss of $8.4 million from FY 2020 net loss of $32.3 million. Net loss for FY Q4’2021 was $13.5 million, an increase in net loss of $3.4 million from $10.1 million in FY Q4’2020. For the year ending August 31, 2021, net loss included $18.5 million in non-cash expense (income), and $8.1 million in FY Q4’2021. Refer to the table below for itemized listing of these expenses.

— The company had cash of $15.3 million and $8.6 million in receivables as of August 31, 2021. In addition, the Company had working capital surplus of $10.4 million after excluding non-cash warrant liability and legal proceedings provision.

Key segment revenue growth that contributed to the strong revenue performance:

— SaaS revenue for FY 2021 was $6.4 million, up from $2.6 million in FY 2020, an increase of 147% YoY. Revenue for FY Q4’2021 was $2.0 million, 28% higher than sequential FY Q3’2021 of $1.5 million.

— Advertising revenue for FY 2021 was $26.7 million. Advertising revenues grew 37% quarter-over-quarter, with FY Q4’2021 revenues of $8.8 million, compared to FY Q3’2021 revenues of $6.4 million.

— Games development revenue for FY 2021 was $3.4 million, excluding $1.3 million of deferred revenue as of August 31, 2021, which has been billed and collected, and is being deferred due to a client acceptance provision. Adjusting FY 2021 and FY 2020 revenue to include deferred revenue outstanding at each year end, adjusted game development revenue for FY 2021 was $4.7 million, a 72% growth over FY 2020 revenue of $2.7 million.

KEY QUOTES:

“Engine has made strong progress in building a uniquely differentiated company at the intersection of gaming and media which enables us to participate in a series of macro growth trends that touch social gaming, social commerce, data analytics, and monetization of media. Our unique competitive advantage is fully realized when we leverage our assets to surface targeted audiences that can be monetized through business to business or direct to consumer social experiences. Key product and client developments have been strong catalysts for the company’s progress.”

— Lou Schwartz, Chief Executive Officer

“As younger demographics increasingly desert traditional media in favor of seeking social experiences in the gaming space – whether participating as a player or as a viewer of competitions – and are increasingly influenced in their marketing decisions by social content creators – we are investing to make our social experiences more robust and more unique for our users, while making our ability to execute social marketing and ad campaigns more effective and efficient for our industry clients.”

— Tom Rogers, Executive Chairman of Engine

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.