Esports and poker operator Allied Gaming & Entertainment spoke of the potential for further growth following a rise in revenue in the second quarter and a major restructuring of its business late last year.

Details of the initiative were announced in December 2022, including the restructuring of the existing esports business. Allied also expanded its focus to include a broader range of entertainment and gaming products and services.

Additionally, the company rebranded from Allied Esports Entertainment to reflect its new direction.

The second quarter was the second full quarter since the restructuring, with Allied reporting both an increase in revenue and a decrease in net loss. President and CEO Yinghua Chen said this was partly due to changes introduced as part of the restructuring.

New subsidiaries, new markets

This included the establishment of the new subsidiaries Allied Mobile Entertainment (AME) and Allied Experiential Entertainment (AEE). AME focuses on the mobile gaming market, while AEE is active in entertainment live events, experiential entertainment venue operations, management and consulting.

According to Chen, these two subsidiaries have enabled and will continue to enable Allied to pursue a wide range of strategic opportunities.

“We expect that AME and AEE Entertainment will enable us to enter new markets, create additional revenue streams and improve our financial performance within the next 12 months,” Chen said.

“This restructuring aims to optimize our resources and provide investors with greater clarity about our business outlook and direction.”

Multiplatform content drives revenue growth at Allied

Looking at Allied’s second quarter, revenue for the three months to June 30 was $3.3m (£2.6m/€3.0m), up 182.3 % compared to $1.2 million last year.

Of this, $2.0 million came from Allied’s multiplatform content operations. This was 6,927.8% higher than the 2022 figure due to the release of the second season of the content series “Elevated”.

In-person event revenue also increased 18.2% to $1.1 million in the quarter, helped by a new naming rights agreement for one of Allied’s venues.

Net loss drastically reduced in the second quarter

Operating expenses fell 2.1% to $4.7 million in the second quarter, while increased interest resulted in additional revenue of $704,013. As a result, the quarterly pre-tax loss was $691,218, a significant improvement from $3.7 million last year.

Allied paid no taxes or recorded any currency conversion adjustments. Thus, the net loss for the quarter was $691,218, as opposed to $3.8 million in 2022.

Additionally, Allied noted that adjusted EBITDA for the quarter improved from a loss of $2.7 million to a loss of $1.1 million.

The Allies’ net loss more than halved in the first half of the year

First-half revenue for the six months ended June 30 was $4.5 million, up 25.0% year-over-year. This included $2.5 million in personal earnings and $2.0 million in multiplatform content earnings.

Operating expenses were reduced by 22.0% to $8.5 million and Allied recorded an additional $1.5 million in additional revenue. This resulted in a pre-tax loss of $2.6 million, compared to $7.4 million in 2022.

After accounting for minimal currency translation adjustments, net loss remained at $2.6 million. That was less than half of the $7.5 million loss the previous year.

Additionally, adjusted EBITDA improved from a loss of $5.3 million to negative $3.2 million.

“We are very excited about the remarkable progress we have made and the opportunities that lie ahead,” said Chen.