The initiative details were unveiled in December 2022, which included restructuring the current esports business. Allied also expanded its focus to encompass a wider range of entertainment and gaming products and services. Additionally, the business rebranded from Allied Esports Entertainment to reflect its new direction.
Q2 marked the second full quarter since the restructuring, with Allied reporting an increase in revenue and a decrease in net loss. President and CEO Yinghua Chen attributed this partially to the changes implemented during the restructure.
As part of the restructuring, new subsidiaries were established, namely Allied Mobile Entertainment (AME) and Allied Experiential Entertainment (AEE). AME focuses on the mobile games market while AEE operates in the realm of entertainment live events, experiential entertainment venue operation, management, and consultation. Chen stated that these two subsidiaries have opened doors for Allied to pursue various strategic opportunities, expecting that they will generate additional revenue streams and improve financial performance within the next 12 months.
In Q2, Allied witnessed a significant rise in revenue, with $3.3m generated in the three-month period ending on 30 June, marking a 182.3% increase compared to the previous year. The multiplatform content operations contributed $2.0m to this total, exhibiting a staggering 6,927.8% growth from the previous year, primarily driven by the release of the second season of the “Elevated” content series. In-person revenue also experienced growth, reaching $1.1m during the quarter, aided by a new naming rights agreement for one of Allied’s venues.
Operating costs in Q2 were 2.1% lower at $4.7m, while increased interest resulted in an additional $704,013 in income. Consequently, the pre-tax loss for the quarter was $691,218, a significant improvement compared to $3.7m in the previous year. Allied did not incur any tax expenses, nor were there any foreign currency translation adjustments. Hence, the net loss for the quarter amounted to $691,218, in contrast to $3.8m in 2022. Additionally, the adjusted EBITDA for the quarter improved from a loss of $2.7m to a $1.1m loss.
In the first half of the year, revenue reached $4.5m, indicating a 25.0% increase compared to the previous year’s six-month period. This included $2.5m worth of in-person revenue and $2.0m from multiplatform content. Operating costs were reduced by 22.0% to $8.5m, and Allied recorded an additional $1.5m in income. As a result, the pre-tax loss amounted to $2.6m, a decrease from $7.4m in 2022. After accounting for minimal foreign currency translation adjustments, the net loss remained at $2.6m, less than half of the $7.5m loss posted in the previous year. Furthermore, the adjusted EBITDA improved from a loss of $5.3m to negative $3.2m.
“We’re very excited about the remarkable progress we have made and the opportunities that lie ahead,” said Chen.
