EEG's Q1 revenue sees 71.9% drop, but company remains hopeful on long-term growth

iGaming company and B2B esports solutions provider Esports Entertainment Group has disclosed its results for the fiscal first quarter concluding on September 30, posting a revenue drop of 71.9% to $2.7 million. The figure was down from $9.6 million delivered in the corresponding period of the previous year.

The revenue drop follows the group's decision to sell the Bethard online casino and sportsbook business in February for €9.5 million ($10.4 million). In its report, EEG algo noted the winding down and liquidation of Argyll entities, as revenue-producing operations ceased in December, having an impact on year-on-year comparisons.

Despite the revenue drop, CEO Alex Igelman said he remains optimistic about long-term prospects at the company, emphasizing a thorough review of the business conducted in recent months and underlining EEG's commitment to adapt to the evolving trends within the esports and iGaming industries.

"This review involved a detailed analysis of every aspect of our business, identifying unprofitable operations and contracts. We have taken firm actions, setting the stage for a bright future," Igelman explained.

"While this restructuring incurred one-time expenses, the long-term benefits will far outweigh these costs as we continue to expect a yearly reduction in operating expenses of more than $4 million. This is a transformative time for the company, marking a fresh start and forging a path towards maximizing our success potential."

The company's strategic alliances during the quarter are also aimed at solidifying its position in the online gaming arena. This includes the integration of a sportsbook supplied by Delasport to its customers on Vie.bet; and a partnership with esports betting solutions provider Oddin.gg to incorporate their iFrame solution for EEG bettors.

After the end of Q1, the company announced an agreement to acquire a 30% minority interest in esports content producer Drafted.gg, which Igelman said will support EEG's long-term ambitions by integrating wagerable content into their expanding gaming offerings.

Examining the financials in detail, the company showcased a reduction in operating expenses and cost of revenue and the adjusted EBITDA loss improved to $354,870 from $1.0 million in Q1 of 2022. However, the net loss for the quarter widened to $4.8 million from $4.2 million in the corresponding period of the previous year. 

CEO Igelman concluded his Q1 assessment on a positive note: "We are excited about the future prospects of Esports Entertainment, fueled by the potential of our strategic investments, and are confident that the future is bright."