Overactive Media (OAM) Q2 2024 earnings summary

Executive summary

• Achieved a 71% year-over-year revenue increase in Q2 2024, with only a 31% rise in operating expenses, resulting in a 52% improvement in adjusted EBITDA loss compared to Q2 2023.

• Net income turned positive at $6.4 million in Q2 2024, up from a $3.4 million loss, due to a $9.8 million gain from the Call of Duty League franchise obligation termination.

• Strategic acquisitions and expanded digital storefront access in major esports titles drove growth and operational leverage.

• Eliminated over CAD 35 million in outstanding entry fees through a new long-term Call of Duty League agreement, realizing a CAD 2.7 million tax termination gain.

• Net working capital increased to $10.9 million, and $35.2 million in cash obligations were eliminated, strengthening the balance sheet.

Financial highlights

• Q2 2024 revenue reached $6.6 million, up 71% year-over-year; H1 2024 revenue totaled $10.3 million, up 88% from H1 2023.

• Q2 operating costs rose 31% to $8.6 million, mainly due to integration and payroll costs from acquisitions.

• Adjusted EBITDA loss improved to $1.2 million in Q2 2024 from $2.5 million in Q2 2023.

• Net income for six months was $2.0 million, up from a $9.2 million loss, mainly due to the one-time gain from the franchise obligation termination.

• Cash and equivalents stood at $9.2 million as of June 30, 2024.

Outlook and guidance

• Expects continued positive impact from recent acquisitions and digital merchandise sales, with a stronger second half of the year anticipated.

• Ongoing discussions with Riot Games to finalize a new League of Legends esports model, expected to conclude by year-end.

• Strategic focus remains on expanding influence in esports, leveraging partnerships, and driving digital item sales.