Engine’s revenue in the third quarter increased by 14.6% to $9.6 million up from $8.4 million in the previous quarter, and increased 29% from $7.5 million in the first quarter of current fiscal year. Net income from continuing operations for the third quarter of 2021 was $6.2 million compared to a net loss of $27.4 million in the second quarter of 2021, and a net loss of $10.4 million in the third quarter last year. The increase in net income was primarily due to a non-cash expense for the change in the fair value of Engine’s warrant liability and convertible debt in the third quarter.
Engine’s operational and corporate highlights from the third quarter include:
- Engine Media announced trading on the Nasdaq Global Market on June 17th under the ticker symbol “GAME.” The company made it official with a closing bell ceremony on July 8th.
- Engine Media announced the appointment of two new board members in July. The new members are Lori Conkling, the Global Head of TV & Film Partnerships at YouTube, and Rudolph “Rudy” Cline-Thomas, Founder and Managing Partner of MASTRY. The Engine Media Board of Directors is led by Tom Rogers, Executive Chairman, and includes Hank Ratner, Bryan Reyhani, Larry Rutkowski, Lou Schwartz and the two new board members.
- Engine Media acquires Sideqik, the Atlanta-based influencer marketing platform, to enhance Engine’s data and media solutions business. Sideqik will integrate with Stream Hatchet, a leader in live streaming analytics and audience engagement, to create a single point of contact into the expanding world of influencer marketing.
- Engine Media, on behalf of WinView, announced the filing of two patent infringement lawsuits filed against DraftKings and FanDuel to enforce the extensive portfolio of patents related to mobile sports betting and online gaming technologies.
- UMG Gaming renewed its partnership with Microsoft’s The Coalition, to continue to serve as the principal Esports Partner for Gears Esports after a successful season. UMG will continue to manage the entire Gears Esports program including tournament operations, league operations, events and broadcast operations.
- Frankly Media announced a partnership with Esports Media. Frankly’s team will provide expert guidance and day-to-day management to monetize Esports Media’s digital properties, including the news outlet Esports.gg, through direct and programmatic advertising.
The Company reports earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA, which are not financial measures calculated and presented in accordance with International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures presented by other issuers. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute to net income (loss) or any other financial measures of performance or liquidity calculated and presented in accordance with IFRS. The Company defines Adjusted EBITDA as EBITDA, adjusted to exclude certain non-cash charges and other items that we do not believe are reflective of our ongoing operating results. The Company utilizes Adjusted EBITDA internally for purposes of forecasting, determining compensation, and assessing the performance of our business, therefore, we believe this measure provides useful supplemental information that may assist investors in assessing an investment in the Company.
The following unaudited table presents the reconciliation of net loss to Adjusted EBITDA for the three and nine months ended May 31, 2021 and 2020, respectively. The comparison between the three and nine months ended May 31, 2021 and 2020, is impacted significantly by the acquisitions of UMG on December 31, 2019, and Frankly and WinView on May 8, 2020. Frankly and Winview are included for one month and UMG for five months in the nine month period ending May 31, 2020, and Frankly and Winview for one month in the three month period ending May 31, 2020. The complete inclusion of Frankly and Winview in the three and nine month comparable periods would have resulted in increased losses in the prior periods.
This earnings release should be read in conjunction with the Company’s Interim Condensed Consolidated Financial Statements and accompanying notes that are available on Engine’s investor relations page which can be found at https://ir.enginemediainc.com/.