Engine Gaming and Media, Inc. (NASDAQ:GAME) Q1 2023 Results Earnings Conference Call January 17, 2023 8:45 AM ET

Company Participants

Lou Schwartz - Chief Executive Officer

Tom Rogers - Executive Chairman

Conference Call Participants

Jason Tilchen - Canaccord Genuity Capital Markets

Michael Kupinski - Noble Financial Capital Markets

Operator

Greetings. And welcome to the Engine Gaming and Media Fiscal First Quarter 2023 Conference Call. Please note this conference call is being recorded.

Before we begin, I would like to caution listeners that comments made by management during this call may include forward-looking statements within the meaning of applicable securities laws. These statements involve material risks and uncertainties, and actual results could differ from those projected in any forward-looking statement due to numerous factors. For a description of these risks and uncertainties, please see Engine's fiscal financial statements and MD&A for the fiscal first quarter 2023 ended November 30, 2022 available on SEDAR and EDGAR.

Important qualifications regarding forward-looking statements are also contained in Engine’s earnings release distributed early this afternoon and also available on SEDAR and in EDGAR. Furthermore, the content of this conference call contains time-sensitive information accurate only as of today, January 17, 2023. Engine undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call.

I would now like to turn the conference over to Mr. Lou Schwartz, Chief Executive Officer, and Tom Rogers, Executive Chairman of Engine Gaming and Media. Please go ahead.

Lou Schwartz

Thank you, operator. And thanks to everyone for joining us on our fiscal first quarter 2023 earnings call.

To begin, total revenue for the fiscal first quarter of 2023 was $10.3 million compared to $11.5 million in the fiscal fourth quarter of 2022. The decrease in total revenue was largely due to short-term headwinds impacting our advertising segment of the business driven by Google algorithm changes, which affected traffic to our largest legacy media client and was not a function of overall advertiser demand. We anticipate these headwinds to be short term and expect to gradually improve in the coming quarters.

Despite these short term advertising headwinds, we continue to see heightened demand for our influencer marketing platform and data insights offerings for game publishers, agencies, and brands looking to drive revenue through targeted audiences, while managing influencer relationships at scale.

For the fiscal first quarter of 2023, SaaS revenue remained relatively flat at $2.4 million due to the declines in legacy content management related SaaS revenues. Importantly, revenues from our influencer and data technology SaaS businesses are up 35% year-over-year, driven by the demand I just mentioned. This is a welcoming trend, heading into our merger with GameSquare, further supporting our merger transaction thesis of driving expanded revenue for game publishers and brands looking to reach youth audiences with a comprehensive set of creative capabilities that leverage our software platforms.