The group announced details of the restructure towards the end of Q4 following a strategic review, with the aim of expanding its focus into a wider range of markets.
The review concluded that shareholders’ interests would be best served by restructuring the existing esports business and widening focus to include a broader array of entertainment and gaming products and services, as opposed to seeking a single business combination transaction.
In addition, the business rebranded as Allied Gaming & Entertainment, with group taking on the new name from 1 December.
While the initiative came too late in the quarter to have any impact on Allied’s performance in Q4 or the full year, chief executive Yinghua Chen said the restructure would support its growth plans in 2023 and beyond.
“Moving forward, we are confident that building upon Allied’s original focus of live events and multi-platform content, while also adding new revenue drivers such as live virtual entertainment events and online gaming tournaments, will result in future positive financial results,” Chen said.
Fourth quarter
Looking first at Allied’s performance in the fourth quarter, revenue for the three months to 31 December was $1.2m, a 36.8% drop from $1.9m in the previous year.
Allied put the drop in revenue down to the non-recurring nature of its 2021 live streaming partnership with Trovo. Almost all revenue came from in-person operations, with just $428 attributed to multi-platform content.
However, despite the fall in revenue, Allied was able to reduce its operating costs by 33.3% to $3.8m, leaving an operating loss of $2.6m, an improvement on $3.8m in 2021.
Allied noted $954,077 in other income, including $755,209 in interest income, which meant a pre-tax loss of $1.7m, compared to a $3.8m loss in the previous year.
The group did not pay any tax during Q4, meaning net loss also stood at $1.7m, in contrast to the $6.3m loss posted last year, though the 2021 figures were impacted by a $2.6m loss on the sale of assets in the World Poker Tour (WPT) in July 2021. Allied sold its poker assets, including the WPT, to Element Partners for $105.0m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter reached a loss of $1.7m, though this was an improvement on the $2.1m loss in 2021.
Full year
Turning to the full year and revenue was 28.0% higher year-on-year at $6.4m, helped by an increase in sponsorship revenue and revenue from live-events that took place at its HyperX Arena and within its Allied Esports Truck operations.
Of this revenue total, $6.1m came from in-person activities and $251,558 multi-platform content.
Operating costs and expenses were 12.6% down at $18.1m, which meant operating loss shortened from $15.8m in 2021 to $11.8m. After including $942,311 in other income, pre-tax loss was $10.8m, compared to $15.1m in the previous year.
Again, Allied did not pay any tax, meaning net loss also stood at $10.8m. This was in contrast to the $62.9m net profit posted at the end of 2021, though the previous year’s figures were impacted by the WPT sale, with this having resulted in a gain of $77.9m.
Allied also noted that adjusted EBITDA for the year reached a loss of $8.6m, though this was an improvement from $10.5m in 2021.
“We experienced positive momentum in 2022, with revenues up 28% over 2021, primarily driven by an increase in live events at our HyperX Arena in Las Vegas and our Allied Esports Truck along with sponsorship revenue from Season One of our original content series, Elevated,” Chen said.
“In addition, during the fourth quarter we rebranded as Allied Gaming & Entertainment to better reflect our positioning as a global experiential entertainment company and also concluded our strategic review process.”