Super League Enterprise Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 15, 2025

Key Takeaways

  • On track to achieve EBITDA positivity in Q4 2025 if current operational changes continue.
  • Q1 operating expenses decreased ~25% year-over-year and gross margin rose to 44% from 38%.
  • Mobile contributed 15% of Q1 revenue, with management targeting at least 25% by 2025.
  • Acquisition of SuperSocial strengthens Roblox capabilities—49 builds, 390M visits, 3B impressions—and sets stage for further M&A consolidation.
  • Q1 revenue met internal goals and net loss fell 20% year-over-year, though revenue was affected by a shift in Roblox’s ad strategy.
AI Generated. May Contain Errors.
Earnings Conference Call
Super League Enterprise Q1 2025
00:00 / 00:00

Transcript Sections

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Operator

These statements involve material risks and uncertainties and actual results could differ from those projected in any forward looking statements due to numerous factors. For a description of these risks and uncertainties, please see Super League's financial statements and MD and A for the first quarter ended 03/31/2025 available on EDGAR. Important qualifications regarding forward looking statements are also contained in Super League's earnings release distributed earlier this afternoon and also available on EDGAR. Furthermore, the content of this conference call contains time sensitive information accurate only as of today, 05/15/2025. Super League undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call.

Operator

I'd now like to turn the conference call over to Matt Edelman, President and Chief Executive Officer. Matt, please go ahead.

Matt Edelman
CEO & President at Super League Gaming

Thank you so much, Kevin. Good afternoon and evening, everybody. I am pleased to be here to report on Super League's first quarter financial results and provide you with a company update. First and most important, as outlined in our q four conference call just a little over a month ago, we are on track with our plan to be EBITDA positive in q four twenty twenty five. We are committed to that result and diligently implementing the operational changes to ensure we get there.

Matt Edelman
CEO & President at Super League Gaming

While we plan to hit our revenue and gross margin goals, as I will explain we have achieved in q one, I assure you that if we stumble, we will work to make the necessary adjustments to keep us on track and demonstrate that our day to day business can be financially healthy. Super League sits at the thriving intersection of interactive entertainment and advertising. Consumers spend extraordinary amounts of time at that intersection, consuming playable content or, in other words, playing video games. Average daily time spent by members of generation z and generation alpha, you could think of it as everyone under the age of 30, is eighty eight and a half minutes across mobile games, Roblox, Fortnite, and Minecraft combined. That exceeds the combined fifty nine point six daily minutes spent across TikTok, YouTube, Instagram, Facebook, and X.

Matt Edelman
CEO & President at Super League Gaming

To us and our clients and partners, people who play video games are not just gamers. They are audiences, audiences who play. They're teenagers who love the outdoors. They're 20 who are just starting out in their careers. They are millennial parents trying to make summer plans for their kids.

Matt Edelman
CEO & President at Super League Gaming

They're even grandparents who want to connect with their grandchildren. Audiences who play are as ubiquitous and broad as audiences who binge shows on streaming platforms, listen to podcasts, go to concerts, and follow sports teams. A quick shout out to New York Knicks, by the way. Almost everyone you know is a player. Eighty five percent of consumers gain.

Matt Edelman
CEO & President at Super League Gaming

94% of Gen Alpha, 90 two percent of Gen z, 80 eight percent of millennials, even 60 of Gen x. Super League knows how to reach and engage audiences who play because we understand the importance to these audiences of playability. When a person is in play mode, they are focused. They are active. Their content consumption has a purpose.

Matt Edelman
CEO & President at Super League Gaming

They don't wanna be interrupted with a video ad or a billboard or a text alert about a product that's on sale or a politician looking for donations. That's why we focus on playable media, ads and content that are an extension of the play experience, and it works. The average time a consumer spends with a brand through ads on TikTok is fifteen seconds. On Roblox, for example, the average time spent with playable media and content ranges from one and a half to eleven minutes. Our playable mobile ads generate a click through rate that is seven to 10 times higher than standard digital standard digital video ads in the same type of ad inventory inventory.

Matt Edelman
CEO & President at Super League Gaming

Hearing all this powerful data, I would be asking why Super League or or perhaps why the intersection of interactive entertainment and advertising is not already accelerating at warp speed. While it will sound cliche, the answer is that the industry is still in an early stage of development. Brands and media agencies have grown accustomed to specific types of measurement and attribution to justify which advertising and customer acquisition strategies deserve more investment. Gaming platforms do not yet deliver the complete suite of capabilities that are available in other digital channels. Although the industry is making impressive progress, marked most recently by Roblox's announcement that their new rewarded video ad format will soon be able to be purchased through Google's ad solutions.

Matt Edelman
CEO & President at Super League Gaming

Marketing dollars always follow consumers, but brands do not move quickly. Thankfully, Super League continues to gain the trust of dozens of iconic brands every year, which puts us at the forefront of this important space. We are one of the leaders in making brands playable, and we will be one of the winners. I'd like to share some of our recent successes, starting with one of our longest standing partners who remains a pioneer in making their brand playable, Chipotle. Our partnership with Chipotle is in its fourth year and is rooted in our hands on strategic approach.

Matt Edelman
CEO & President at Super League Gaming

We have delivered seven projects, including five consumer facing campaigns, some of which have won innovation awards. We've delivered multiple firsts captured in headlines such as Chipotle being the first QSR to launch a new ingredient in the metaverse or the first QSR to debate debut a new television ad in the metaverse. Our most recent experience became the number one trending game on Roblox on the Roblox platform and broke into the top 75 most visited games with consumers rolling 1,270,000 virtual burritos in the first day and redeeming 50,000 codes for free real world burritos in less than three hours. Consistent with our past efforts, the program contributed to mobile app downloads and mobile food order revenue for Chipotle. Players spent fifteen minutes in the experience on average, which we've been told is longer than the average amount of time spent per visit to a Chipotle restaurant.

Matt Edelman
CEO & President at Super League Gaming

Another super fun program and one of our most ambitious so far this year is with GoGo Squeeze. We could not ask for a brand with a more perfect message. There is no right way to play just like there is no right way to snack. Based on that statement, it is fitting that this campaign is running across multiple platforms, platforms, including mobile games, Minecraft, TikTok, and YouTube. Primary features include GoGo Squeeze minigames, interactive characters in Minecraft, as well as playable mobile ads.

Matt Edelman
CEO & President at Super League Gaming

Most exciting is that this is the first time GoGo Squeeze is running a program to reach younger audiences with all previous campaigns having been parent focused. In q one, we also delivered a mini game arcade for Logitech in multiple Roblox experiences and reach Gen Alpha and Gen Z audiences through mobile playable ads for brands as diverse as Hasbro and Accounting Plus. Yes. We ran a playable media campaign to inspire accounting as a career choice. Perhaps most interesting, had the opportunity to build a Roblox world for Google's be Internet awesome campaign based on the largest curriculum taught globally on Internet safety for young students that was recently demoed in person to congressional staffers in Washington DC.

Matt Edelman
CEO & President at Super League Gaming

Now I'd like to talk about Super League's q one results. As I mentioned at the start, we are implementing the realignment plan articulated during my discussion with our executive chair, Anhand, on our q four twenty twenty four earnings call. It consists of three main pillars: reducing and controlling our costs. Our Q1 operating expense decreased approximately 25% compared to Q1 in the prior year. This has continued into Q2 with staff reductions and a decrease in executive team compensation.

Matt Edelman
CEO & President at Super League Gaming

Collectively, we have further reduced our operating costs this year by approximately 30%. Number two, increasing and maintaining our gross margin by focusing on higher margin programs. Our q one gross margin increased to 44% from 38% for fiscal year twenty twenty four. Number three, diversifying our revenue to reduce exposure to strategy or policy changes instituted by major platforms or the unpredictable pace of advancement in the efficacy of their advertising solutions. Our expansion into mobile continues to excite partners with mobile representing a steady 15% of our revenue in Q1.

Matt Edelman
CEO & President at Super League Gaming

We expect mobile to grow to at least 25% of our total revenue in 2025. The good news about our q one revenue is that we met our internal goals, the goals that give us ongoing confidence in becoming EBITDA positive in q four. The less good news is that our goals were self aware following the shift in our Roblox business in the second half of twenty twenty four, which, as a reminder, resulted from the changes in how Roblox determined they needed to grow their advertising revenue directly. Despite the revenue decline, our q one revenue our q one twenty twenty five net loss decreased 20% compared to q one twenty twenty four. Looking ahead, our revenue pipeline remains strong with approximately $20,000,000 in active opportunities across 97 unique programs, evenly split between new and returning partners with an average deal size of approximately $200,000.

Matt Edelman
CEO & President at Super League Gaming

We continue to deploy various strategies to to secure financing, both to support operational needs and to advance targeted strategic opportunities. As you may know, we recently acquired SuperSocial, an award winning Roblox studio with clients, including Gucci, e. F. Beauty, Walmart, Universal Music, and more. With just that one deal, we now have a Roblox business that has delivered 49 immersive builds, racking up more than 390,000,000 visits and 3,000,000,000 impressions on the platform.

Matt Edelman
CEO & President at Super League Gaming

We believe there will be further industry consolidation and see additional exciting opportunities with companies that can accelerate our path to EBITDA positive through clear revenue and cost synergies. We will remain disciplined in our focus only on opportunities that are accretive and that can also reinforce Super League's position as a leader in the playable media space. Kevin, let's now please move to q and a.

Operator

Thank you. We'll now be conducting a question and answer session. Question session. Our first question today is coming from Howard Halpern. Your line is now live.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Hi.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

It's nice to talk to you. We have fast turnaround here. But in terms of the acquisition that you just made, what does that say to other potential, targets that you're able to, you know, acquire something, leverage it, and, immediately make it accretive for everybody?

Matt Edelman
CEO & President at Super League Gaming

Well, I think it it shows that we have an executive team and an infrastructure within the company that can help support opportunities for inorganic growth. And so if there are companies that have an interest in being part of something bigger and accelerating their growth by doing so, they can likely have faith that Super League would be, you know, a good partner and and a good home for their people, their employees, and the growth of their business.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

And the recent, you know, equity raise, does that give you enough wiggle room, do you believe, to get to your breakeven that you, you know, want to by the fourth quarter, or do you still might need a little extra boost in there?

Matt Edelman
CEO & President at Super League Gaming

I think we are, you know, we're still going to pursue capital raise opportunities in, you know, in the coming, months and and at the right times during this year, all the while still heading toward that EBITDA positive outcome in in q four.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Okay. And and and one one last one. Are you seeing different agencies now now that you're, you know, focused on the the play part and the mobile part? Are the different agencies that are coming to you or newer agencies even for potential new customers?

Matt Edelman
CEO & President at Super League Gaming

That's a great question. I appreciate you asking it. The answer is absolutely. Our expansion into mobile has really opened up the aperture of opportunities for Super League. The demographic audiences and audience segments available through mobile are much, more diverse and broad on really every filter than the audiences, within the immersive platforms.

Matt Edelman
CEO & President at Super League Gaming

And as a result, our conversations have expanded quite a bit with agencies and brands, who believe in the power of play and the opportunities to achieve engagement with their customer base through playable media.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Okay. Well, thanks, and keep up the great work. It's a start, and it looks like it's a good start so far.

Matt Edelman
CEO & President at Super League Gaming

I appreciate that. Thank you, Howard.

Operator

Thank you. Our next question is coming from Jack Cordero from Maxim Group. Your line is now live.

Jack Vander Aarde
SVP & Senior Research Analyst at Maxim Group

Hi, this is Jack Cordero calling in for Jack Vander Aard. Thanks for taking my questions. Just one quick question about macro. In the press release, it mentioned macro headwinds. Can you touch on how this is gonna impact your business?

Jack Vander Aarde
SVP & Senior Research Analyst at Maxim Group

How maybe you're working to, you know, evolve past it? Any color there would be helpful.

Matt Edelman
CEO & President at Super League Gaming

Of course. I think the real question that is not yet answered is what might happen, with marketing and advertising budgets, due to some of the economic uncertainty, related to the current macro climate. At the moment, we are not seeing, a lot of evidence that budgets are going to be cut. We are seeing some evidence that they are being delayed. And so for us, the real focus is making sure that we're still putting the right solutions in front of our existing and new partners to make sure that as those budgets are deployed, they're deployed through solutions we bring to the table.

Jack Vander Aarde
SVP & Senior Research Analyst at Maxim Group

Okay. That's very helpful. And then, you know, maybe piggyback after a prior question. You know, given that your mobile games has already grown to 15% of revenues, do you have any visibility and or expectation of what that will progress maybe by the end of the year and kind of going forward? How big of a chunk of the business is that going to be?

Matt Edelman
CEO & President at Super League Gaming

We think that mobile will represent at least 25% of of our revenue in 2025, and and, you know, we're on a on a nice pace, to to get there and and very excited about, how it's developing.

Jack Vander Aarde
SVP & Senior Research Analyst at Maxim Group

Okay. Very helpful. And then, one last question for me. You know, you touched a little bit more on the strategic importance of, you know, the SuperSocial acquisition. And then, you know, any other additional color on your broader thoughts on the m and a landscape would be helpful. Thank you.

Matt Edelman
CEO & President at Super League Gaming

Of course. SuperSocial has been one of many frenemies, that we have within the Roblox ecosystem in particular. There are perhaps, you know, eight to 10 companies who have effectively grown up together as it relates to Roblox, and each has found a bit of their own space and their own niche. And there are actually partnerships that a lot of us have engaged in over time to help each other. SuperSocial is a company we've been close with for several years, and it got to the point where their, their management team felt there was a better way forward for their clients and partners as part of a bigger organization, than they can deliver on their own.

Matt Edelman
CEO & President at Super League Gaming

The strategic importance for Super League is it puts us into business with some really exciting, IP owners and brands and gives us even more of an opportunity to showcase what we're capable of in in terms of how to deliver results for our for those partners. To the second question about the m and a landscape, I think there's a, again, an opportunity going forward for probably a handful of businesses in the space who have achieved a level of durability and scale, to become bigger inorganically while also growing organically. Super League has proven to be able to, pursue m and a successfully and to integrate companies and teams and products successfully. I believe that's going to be a strength of ours going forward. So to the extent that consolidation becomes even more active, we we have a a real opportunity to be, a strong and and busy participant, in the landscape.

Jack Vander Aarde
SVP & Senior Research Analyst at Maxim Group

Thank you. That's helpful.

Operator

Thank you. We reached the end of our question and answer session. I'd to turn the floor back over to Matt for any further or closing comments.

Matt Edelman
CEO & President at Super League Gaming

Thank you, Kevin. I'll I'll conclude today by emphasizing that Super League is on the right path, a path that has started with controlling costs, is set to expand through revenue diversification, and will become increasingly solid underfoot with gross margins that can propel us towards an EBITDA positive q four. Playability is not a trend. It is a permanent and growing form of engagement that is dominating the amount of times cons the amount of time consumers spend with the content of their choice. Think about it.

Matt Edelman
CEO & President at Super League Gaming

When you are playing a game, your actions directly influence your content experience. That is why you are leaned in. That is why you are immersed. For a brand to capture your attention in these moments, their marketing message has to fit into your world and connect to your state of mind. That requires making the brand playable.

Matt Edelman
CEO & President at Super League Gaming

That's where Super League shines. Thank you for listening today.

Operator

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

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