GameSquare Q3 results show FaZe acquisition fills funding gap

venturebeat.com:

Esports and gaming media conglomerate GameSquare holdings announced its financial results for the third quarter of 2023. The company’s revenue for the first three quarters totaled $35.2 million, up 38% from the same period in 2022.

While revenue is up, the holding company’s cost of sales and expenses have also gone up significantly. Its cost of sales climbed 83% to $24.8 million, leaving $10.4 million in gross profit. GameSquare’s expenses totaled nearly $24.3 million, up 28% from the same period last year. The majority of the increase was a result of salaries, consulting and management fees growing 81% year-on-year.

The company showcased these results in a Twitch stream on Tyler “Ninja” Blevins channel instead of a typical conference call. Ninja joined GameSquare as its chief innovation officer in February 2023.

Notably, GameSquare’s adjusted EBITDA loss is trending away from profitability. In the first three quarters of 2023, the company’s adjusted EBITDA loss totaled $10 million. This is up 37% from a loss of $7.3 million in the same period in 2022.

GamesBeat Next On-Demand 2023

Did you miss out on GamesBeat Next? Head to our on-demand library to hear from the brightest minds within the gaming industry on latest developments and their take on the future of gaming.

Critically, GameSquare’s results revealed one of the underlying reasons why it acquired ailing esports and lifestyle organization FaZe Clan in October 2023. In its going concerns, GameSquare disclosed it needed about $16 million before the end of 2023 as its current assets could not cover its current liabilities.

GameSquare’s all-stock acquisition of FaZe Clan helps to solve this immediate problem. FaZe’s final financial report shows that the company lost about