Good afternoon, and thank you for joining us for the GameSquare Holdings 2024 Third Quarter Conference Call. On the call today, we have Justin Kenna, GameSquare's CEO; Lou Schwartz, President; and Mike Munoz, CFO. During the call, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Before management discusses the results, I'd like to remind everyone that certain statements in this call may be forward-looking in nature. These include statements involving known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. For information about forward-looking statements and risk factors, please see our 10-Q for the quarter ended September 30, 2024, which will be available on the company's website or with the Securities and Exchange Commission. I will now turn the call over to GameSquare's CEO, Justin Kenna. Justin, you may proceed.

Thank you, and good afternoon to everyone joining us on today's call. I'm pleased to announce GameSquare delivered strong third quarter financial results that were in line with our preannouncement and reflect the strategies underway to drive organic sales growth, complete the integration of our recent acquisitions and build a profitable organization. On a pro forma basis, revenue increased 10% year-over-year to a third quarter record of $26.4 million. Revenue growth during the third quarter reflects the continued success of the growth strategies we are pursuing and improving market dynamics compared to the same period last year. I'm also encouraged by the significant improvements we are making to profitability, with adjusted EBITDA for the third quarter exceeding our initial expectations. Our quarterly adjusted EBITDA was a loss of $2.2 million for the 2024 third quarter compared to a loss of $5.4 million for the second quarter and a pro forma loss of $7.9 million for the first quarter. Continued sequential improvement in adjusted EBITDA demonstrates the success of our ongoing efforts to grow revenue, increase gross margin and reduce operating expenses. Our financial model is approaching an important inflection point, and we expect our adjusted EBITDA to continue to improve during the fourth quarter as we position GameSquare for profitability in 2025 and beyond. As we have stated on prior calls, our operating plan for 2024 has focused on three main components: first, to complete the integration of the FaZe Clan acquisition and significantly reduce our cost structure; second, to strengthen our balance sheet and divest non-core assets; and third, to leverage our platform of owned and operated IP, agency and media, and SaaS technology assets to drive profitable growth. I believe our third quarter results demonstrate the progress we are making executing against this plan. As a reminder, in March 2024, we completed the acquisition of FaZe Clan in an all-stock transaction valued at $40 million. FaZe Clan is comprised of two assets: FaZe Esports, one of the world's best and most recognized esports organizations, and FaZe Media, which we regard as the largest followed gaming brand in the world. As part of our strategy for the FaZe Clan acquisition, we understood that in order for FaZe Media to be successful, FaZe's founders and creators must be at the helm, have an ownership stake in the organization and be empowered with creative direction. As a result, we've completed three important transactions at FaZe Media to align GameSquare, FaZe's founders and other key stakeholders around a plan to return the brand back to its roots and reboot FaZe Media for success in 2024 and beyond. First, in May, we formed FaZe Media as a separate standalone entity that combines the FaZe creative talent roster and non-esports assets into a creator-led IP and Internet media company under the leadership of FaZe Banks, an original FaZe Clan founder. We simultaneously closed an $11 million investment in FaZe Media for Matt Kalish, a founder of DraftKings, who now serves on the Board of FaZe Media. Second, in June, we agreed to sell a 25.5% interest in FaZe Media to an entity controlled by FaZe Media's CEO, FaZe Banks. Under the terms of the transaction, GameSquare retained voting control of the transferred shares for a period of two years, during which FaZe Media will continue to be consolidated into GameSquare's financial statements. Finally, today, we announced a new $10 million convertible note with Gigamoon Media, an entity controlled by Matt Kalish. Under the terms of the transaction, the conversion date is December 31, 2025, at which time the note at Gigamoon's election will convert into either shares of GameSquare's common stock at a conversion price of $2.50 per share or 5.725 million shares of FaZe Media Series A-1 preferred stock beneficially held by GameSquare. If Gigamoon elects to convert the note into the remaining share of FaZe Media, it would value the entity at approximately $44 million compared to GameSquare's current market cap of approximately $32 million. We believe the transaction is a huge win for GameSquare, for Kalish and for FaZe Media. The transaction aligns with our operating strategy by optimizing our business model and raising non-dilutive capital. It also deepens the alignment between GameSquare, Kalish and other strategic investors while supporting FaZe Banks' vision for the future of FaZe Media. We will use a portion of the new capital to pay down our existing equity line facility with funds managed by Yorkville, while increasing our cash position to take advantage of opportunities and accelerate revenue growth in the fourth quarter and beyond. In addition, we believe these transactions create the proper infrastructure for FaZe Media to be successful as FaZe Media is now truly a creator-led IP and media company, supported by the region and expertise of Matt Kalish and full resources of GameSquare. When we acquired FaZe Clan, the brand was suffering from significant losses, declining community engagement and no clear strategic direction. I'm extremely proud of our efforts to turn around FaZe Clan's performance and bring the brand back to life. This is a direct result of the return and hard work of the founders under the leadership of CEO, FaZe Banks; the strength of GameSquare's platform; our history with and knowledge of the brand; and most importantly, our belief that, if managed correctly, FaZe can reengage with an extremely committed community and lead to monetization opportunities in the coming months and quarters. I'd like to use this opportunity to thank everyone at GameSquare and FaZe for their hard work and dedication over the past three quarters. Since FaZe Media's reboot in April 2024, the reengagement of the community has been fantastic. In addition to the statistics I shared on our last conference call, we recently announced the success of FaZe Clan's subathon in September of '24. The month-long subathon was FaZe Clan's first major streaming event since the brand's reboot, showcasing the successful return of FaZe Clan and its new creator roster. Some of the highlights include over 1.1 billion impressions, more than 760 million video views and over 47 million engagements, setting new records for FaZe Clan's biggest event to date. The event averaged 52,600 concurrent viewers, peaked at 132,200 and garnered 2.2 billion minutes watched with 257 million total views. Finally, FaZe Clan added over 300,000 new Twitch subscribers as well as 350,000 total subscribers across all participating channels. In fact, FaZe Clan's the number one brand by minutes watched on Twitch during the month of September. Driving engagement with FaZe's community is an important indicator of future growth opportunities for GameSquare, as engagement helps support a robust pipeline of brand deals and future monetization opportunities. We continue to see a larger number of multiple seven-figure deals enter our pipeline, which are expected to convert to partnerships in 2024 and '25. In addition to GameSquare's ownership and voting control at FaZe Media, we continue to own 100% of FaZe Esports. As one of the top esports organizations in the world, we believe there is enormous opportunity to profitably grow FaZe Esports. We're following a similar strategy that successfully grew our former esports team by over 220% in just two years. For the third quarter, FaZe Esports had revenue of $4.8 million and contributed positive adjusted EBITDA. We are also focused on driving efficiencies and reducing costs at FaZe Media and FaZe Esports. When comparing the third quarter of 2024 and 2023, we have removed approximately $17 million of annualized costs and believe there are opportunities to remove additional costs during the 2024 fourth quarter. With a more efficient operating model and a more disciplined management structure, we believe there are many opportunities to drive profitable growth in FaZe Media and FaZe Esports, especially as each business scales. Our third quarter adjusted EBITDA demonstrates the continued improvements we are making and the benefits of our integration strategy. The final component of our plan in 2024 I want to review today are the opportunities we are pursuing across our owned and operated IP, agency and media, and SaaS and technology assets to grow and improve profitability. Overall, we are seeing trends continue to strengthen. Through the first nine months of the year, we have increased the number of customers on retainer. We've grown our average contract value by 46%, more than tripled the number of UEF and world-building campaigns deployed and achieved record monthly contract wins in August of '24. Highlights during the third quarter for FaZe Media and Esports include a multi-year, multi-million dollar expansion of the Rollbit sponsorship deal; a new multi-year, multi-million dollar sponsorship and licensing deal with G FUEL; and FaZe Esports' largest-ever tournament winnings in the inaugural Esports World Cup, which was held in Saudi Arabia during July and August. Within our media business, we announced multiple new projects during the quarter, including campaigns for Topgolf, Dairy Max, 5-hour ENERGY, and a new and already growing relationship with one of the big five entertainment studios. We are also seeing favorable trends in our events business. We are kicking off our partnership with the NFL to launch a new traveling creator series called NFL 4 THE FANS LIVE. This innovative series blends the excitement of NFL fandom on game day with interactive gaming and creative-driven content accessible for in-person and online audiences during the 2024 NFL season. Finally, in the rapidly evolving landscape of gaming and influencer marketing, we continue to evolve our SaaS and technology offerings, focusing on the integration of data and insights with our creator management and activation platform. This strategic approach is designed to provide game publishers and brands with a comprehensive solution set to effectively target audiences and optimize revenue performance. The hallmark of this development is our improved CRM tool, which has been refined to meet the specific needs of our customers, allowing them to engage meaningfully with their most valued commercial channel influencers. This capability will enhance our differentiated position in the influencer marketing space. In October, Stream Hatchet, our streaming analytics and business intelligence platform, launched an AI-powered influencer discovery tool designed to redefine how brands identify and connect with creators. This AI-powered solution marked a significant breakthrough in influencer marketing by using proprietary algorithms to sift through data on over 15 million creators to find the most aligned partners for brand campaigns. We have launched this product with a customer that operates one of the largest online mobile games, and we have seen interest grow quickly from other game publishers as well as brands and creators. As we look to the fourth quarter and beyond, we are excited about the direction we are heading. Positive momentum is growing across our business as more brands recognize the value of our next-generation media platform. Our interconnected media, creative, and technology capabilities continue to provide brands with best-in-class solutions to connect and engage with youth audiences at scale. We expect to end 2024 with record revenue, a record backlog of committed revenue, a higher number of customers on retainer, and a growing pipeline. As a result, we believe 2025 will be a strong year of growth and significantly improved profitability. So with this overview, I'd like to turn the call over to Mike to review our third quarter financial results. Mike?

Thanks, Justin. As a reminder, 2024 financial results include multiple corporate actions. Most significantly, the March 7, 2024 acquisition of FaZe Clan and the March 1, 2024 sale of Complexity Gaming, which has been treated as a discontinued operation in our 2024 and 2023 year-to-date results. We also further divested non-core assets during the year on May 31, 2024. As a result, we believe it is best to look at our business on a pro forma basis, which includes the full year-to-date contribution of FaZe Clan. Comparing our 2024 third quarter results to the prior year pro forma results, total revenue was $26.4 million compared to $24.0 million. The 10% year-over-year increase in revenue was primarily due to growth from our agency and media business and owned and operated IP segment. Gross margin for the 2024 third quarter was $5.2 million or 19.8% of sales compared to $3.4 million or 14% of sales on a pro forma basis for the same period last year. We expect gross margin to improve going forward, supported by a more profitable revenue mix in the fourth quarter and additional actions underway to improve gross margin. As Justin mentioned, we have made significant strides in improving our operating cash burn figures over the last 12 months. Adjusted EBITDA loss for the 2024 third quarter amounted to $2.2 million compared to a loss of $10.4 million on a pro forma basis last year. As a percentage of revenue, our adjusted EBITDA loss improved from a negative 43.4% for the pro forma 2023 third quarter to a negative 8.2% for the 2024 third quarter. When comparing the third quarter of 2024 and 2023 results for FaZe Clan, the company has removed approximately $17 million of annualized costs and expect to remove additional costs during the fourth quarter of 2024. With this overview, I'll turn the call back over to Justin.

Thanks, Mike. Before we open the call up to questions, I want to review our expectations for the remainder of the year. After a solid nine months, we believe we are extremely well positioned to achieve between $105 million and $110 million in annual revenue. As I mentioned earlier, we ended the 2024 third quarter with a record backlog of committed revenue, a higher number of customers on retainer and a growing pipeline, which we believe provides us with good visibility into 2025. As a result, we believe 2025 will be a strong year of revenue growth and significantly improved profitability. As we improve our cash burn and approach profitability, we have made additional strides to strengthen our balance sheet. At September 30, 2024, we had over $11 million in cash on our balance sheet and added an additional $10 million of cash through today's announcement of the convertible note. As a result, we have the flexibility to pay down our existing equity line facility and take advantage of opportunities to accelerate revenue growth in the fourth quarter and beyond. 2024 is shaping up to be a transformative year for GameSquare, and we believe that we are well positioned to show further sales growth and significantly improved profitability in 2025. So with this overview, Lou, Mike, and I are happy to take questions. Operator, please open up the call to questions. Thank you.

We will now start the question-and-answer session. Our first question comes from Jack Vander Aarde with Maxim Group. Please go ahead.

Hey, that's impressive. Congratulations on the results. It's great to see the strength. I have a couple of questions. Could you elaborate on the record backlog you mentioned? What types of revenues are included in that? Also, I'd like to understand more about the margin profile as you work to improve the overall gross margin. Thank you.

Yeah, absolutely. I can kick off there. Mike, Lou, feel free to add any color. Jack, I think most pleasing is a lot of the revenue growth that we're seeing in a lot of these longer-term sort of multi-year deals are coming from sort of growth in our agency business, which was a big contributor to that sort of 46% average contract size increasing in the higher retainer revenue. What is most sort of pleasing about this is these sort of multi-year, seven-figure deals to your point, Jack, around margin is that they are higher in margin. I think that you'll continue to see margin expand. Q2, there was a sort of higher-than-expected programmatic revenue quarter. What we're starting to see, and I think you'll see more so into Q4 and specifically into 2025, is continued growth of our SaaS business, which is really high margin and growth of our agency business, which, again, we've really gone from, I think, over the past two years, competing for the RFPs into building long-term relationships. And now we're a lot more selective with who we're working with. We named some of the clients sort of earlier in the call, but incredible clients that we're expanding our offerings with and getting more strategic with and certainly expanding margins. So we expect margins to expand. I'd say that a lot of that growth is coming from that sort of agency segment of the business.

That's very helpful. In August, you released a press announcement that highlighted about $15 million in new revenue related to sponsorship and licensing agreements over several years. Can you provide some insight on whether this is just the beginning? How does this figure align with your expectations for additional licensing and sponsorship revenue as you continue to gain momentum? Specifically, how does the $15 million from August compare to your future projections? Thank you.

We believe this is the beginning of great things. We're really excited about the transformative changes we've seen this year, particularly with integrating FaZe Clan and reducing costs. What stands out the most is the organic growth in both our SaaS and agency businesses during the FaZe transition. To be frank, we experienced challenges in the brand and ad markets before, with shrinking budgets. Now, we see the opposite trend. The adjustments we've made were not due to lost clients; rather, budgets were just delayed to later quarters, and we are beginning to see those benefits. We've been working with one of our largest studio partners and have a significant opportunity to grow with them instead of searching for new clients. We're receiving larger budgets from these major clients because of our strong execution, which is very encouraging. Additionally, we continue to support Epic Games, assisting them in activating major cultural events like the Super Bowl and TwitchCon, with an event planned in Vegas this weekend. We're heavily involved in their live events and strategy, especially with their mobile team. We anticipate substantial organic growth in 2025. Our pipeline is the strongest it’s ever been, but what matters most is that we are executing well, expanding with our clients, and we will enter 2025 with more secured recurring revenue than ever. We are in a very favorable position.

Okay, fantastic. I think that’s it for me. Great work, guys. Appreciate it. I’ll hop back in queue.

The next question comes from Greg Gibas with Northland Securities. Please go ahead.

Okay. Great. Good afternoon Justin and Mike. Thanks for taking the question and congrats on the quarter. Really nice with the additional cost savings that you're seeing and reductions there. You mentioned seeing additional opportunity for cost reductions in Q4. Wondering if you could maybe expand on the opportunities you see? And are you able to quantify them in any way?

I believe, Greg, it's about ongoing efficiencies. There's still some cleanup to be done from the initial integration of FaZe. Integrating any new asset takes time. While some resources or contracts may be eliminated quickly, there are ongoing adjustments as we learn to integrate various systems and identify greater efficiencies. When we acquired FaZe, we estimated around $80 million in potential cost savings, and we have achieved that on an annual basis as reflected in Q2 and Q3 numbers. However, there is potential for even more savings, primarily from efficiencies. You can expect continued improvement, but the pace of cost improvement may not match the rates seen in Q2 or Q3. While we anticipate further cost efficiencies, true profitability will stem from increased revenue and margin. Q2 exceeded expectations across the board, which is positive, though much of that additional revenue came from the programmatic sector, which has lower margins. In Q4 and into 2025, we expect revenue growth to originate from higher-margin areas of our business. You will see improved costs, but not at the same rate as Q3. Q4 will involve some more contract adjustments and resource management on the FaZe side, but the focus will be on enhancing efficiency. We are reaching a strong level of operating leverage. The essential elements are in place within the business. Expanding current client relationships is not requiring the same spending per dollar as creating operating leverage to generate more revenue. We are witnessing six-figure deals, and in some cases, low seven-figure contracts evolving into high seven-figure contracts, with potential for some eight-figure deals. We won’t need to hire at the same rate to carry out those projects.

Great. That's helpful, Justin. And just regarding the record backlog and current pipeline, obviously great to see, and I could maybe follow up on the first question I think you guys were asked. Those larger number of seven-figure deals that are entering the pipeline, what segments or categories are you seeing them in? It sounds like you mentioned strength in the agency business. But just wondering if you could maybe provide any more specifics on those new deals entering the pipeline. Thanks.

I think we have a really strong mix across the business. Regarding FaZe, our Esports segment has some exciting opportunities, and we expect positive news soon. On the FaZe Media side, we recently paused our social channels, which connect to large audiences, but we've now returned and demonstrated the brand's strength during the subathon in September. This has led to partnerships with G FUEL and DraftKings, and we have a robust active pipeline there as well. The agency segment is seeing increased interest, and we’re pleased to report that our existing clients are expanding their budgets with us. These clients are significant, and we see further potential for growth. Our SaaS business is stable and scaling, with three out of the top ten game publishers as clients for our agency event or content services. There’s a significant opportunity for us to enhance our offerings within the group, which will be a focus for us in 2025. Overall, the group is in a healthy position, and we anticipate sharing positive news with the market soon, as we are entering 2025 from a strong standpoint.

Great. Appreciate the color. I’ll pass on.

This concludes our question-and-answer session. I would like to turn the conference back over to Justin Kenna for any closing remarks.

Yeah. Thank you, Dan. And as always, thank you to everyone for joining and the continued support. It really is greatly appreciated. I think it's certainly been a challenging year from a macro standpoint. But again, I'm extremely pleased with the way we've been able to navigate that, and the way our teams have been able to put their heads down and really execute. I feel extremely bullish about the position we're in, closing out the year really strongly and entering 2025 in a period of time that I really believe is a major inflection point for us as a business. That is going from ultra growth and cleanup mode to really generating cash. I think that, that is going to be an inflection point for us. We look forward to getting the credit and appreciation from the market as we continue to execute. So thank you, everyone, for joining. We feel really bullish about where the company is at and our path forward. We look forward to updating everyone on Q4 as we continue to execute. Thanks.

This brings to a close the GameSquare Holdings 2024 third quarter conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.