Esports Entertainment Group (EEG) revenue fell 60.6% for the full year 2023 ended June 30, although the company managed to significantly reduce its expenses and net loss.
EEG published a strategic update yesterday (October 16) detailing its activities over the course of the financial year. This also included a short financial update.
The 12 months to June 30 were difficult for EEG after a financially difficult 2021. In October 2022, the company’s future was in the hands of a creditor after EEG defaulted on the issuance of convertible bonds in 2021. These bonds had a face value of $35.0 million. In December, EEG considered abandoning iGaming altogether and also confirmed the exit of former CEO Grant Johnson. That same month, the company narrowly avoided delisting from the Nasdaq stock exchange.
There were further departures in January 2023, with Daniel Mathews stepping down from the positions of CFO and COO. Later that month, former CEO Johnson filed a lawsuit against EEG, claiming his firing from the company violated his employment contract.
EEG announced the sale of its Bethard online casino and sports betting business in February. The total sales value was 9.5 million euros. In April, newly appointed CEO Alex Igelman outlined EEG’s B2C expansion and confirmed divestment plans. EEG also entered into an agreement to convert much of its debt into company stock.
Total revenue for FY23 was $23.0m (£18.9m/€21.8m), compared to $58.4m in 2022. However, overall cost of sales declined and was $8.8 million, a decrease of 63.6%.
Sales and marketing costs were minimized the most, decreasing by 77.0% to $5.9 million. General and administrative expenses were $28.9 million for the year, a decrease of 43.6%. Net losses totaled $32.2 million, a stark contrast to the $102.2 million recorded in EEG’s fiscal year 2022.
Igelman said EEG has made a number of strategic decisions that he hopes will strengthen the company in the future.
“Over the past few months, the company has conducted a comprehensive review of our organization, focusing on the expected development of the esports and igaming sectors,” explained Igelman. “Through this process, we examined our business from the ground up and identified operations and contracts that were not profitable, leading to decisive actions that set us up for a promising future.
“Although the restructuring involved one-time costs, we are confident that the long-term benefits will significantly outweigh these costs.”
Continuous focus on initiatives
He added that EEG expects to reduce annual operating costs by $4 million going forward and said the company has reduced total liabilities by an estimated $51.8 million since January this year.
Igelman went on to explain EEG’s “recent focus” – developing initiatives related to its esports and igaming offerings.
“Overall, we believe the company-wide initiatives we have undertaken this year will place us in a stronger financial position and place us at the forefront of the rapidly growing esports betting market, which will grow significantly through 2025,” continued Igelman continued.
“That’s why I couldn’t be more excited about the prospects for our business.”