Engine Media Holdings Inc Stock

Hello, and welcome to the Special Meeting of Stockholders of GameSquare Holdings, Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Justin Kenna, the Chief Executive Officer and President of GameSquare Holdings, Inc. The floor is yours.

Good morning. I'm Justin Kenna, the Chief Executive Officer and President of GameSquare Holdings, Inc. And on behalf of the company, I would like to welcome you to our Special Meeting of Stockholders. This meeting is now formally called to order, and I will chair the remainder of this meeting.

During this meeting, shareholders participating online are welcome to submit questions through the virtual meeting platform by clicking on the Q&A tab, typing your question and clicking Submit. Questions pertinent to meeting matters will be answered after the proposals for today's meeting have been presented. Please limit your remarks to the items of business before us.

The general order of business today will be to confirm proper notice was given for this meeting and that a quorum is present to transact business. We'll then -- We then will accept the motions to be considered and receive a report about the voting results. Michael Munoz, the company's Chief Financial Officer, will present the notice of this meeting and report as to its mailing.

I have received an affidavit of mailing duly signed and sworn by Computershare Investor Services, Inc., indicating that the notice of the Special Meeting of Stockholders, along with the company's proxy statement and form of proxy card were mailed or made available on or about July 22, 2026, to each stockholder of record as of July 13, 2026.

This Special Meeting of Stockholders is being held for the purposes set forth in the notice of the Special Meeting of Stockholders. A final report of the voting results from the meeting will be set forth in a Form 8-K filed with the Securities and Exchange Commission within 4 business days following the company's receipt of the final voting results from the meeting.

Thank you, Mike. The notice of this meeting and the affidavit of the mailing of the notice of this meeting and the other proxy materials are hereby made part of the minutes of this meeting. Mike, please report on the attendance at this meeting.

There were 103,043,011 shares of the company's common stock outstanding on July 13, 2026, and entitled to vote at this meeting. I have been advised by our Inspector of Election that there is at least 1/3 of such shares of the company's stock outstanding represented in person or by proxy at this meeting, constituting a quorum.

Thank you. Notice of the meeting has been given. There is a quorum, and therefore, this meeting is lawfully convened and ready to transact business.

The first item of business is a proposal for the approval of an amendment to the company's first amended and restated certificate of incorporation and the authorization of the company's Board of Directors to effect a reverse stock split of the company's issued and outstanding common stock, par value $0.001 (sic) [ $0.0001 ] per share within a range from 1 for 2 to 1 for 8, with the exact ratio of the reverse stock split to be determined by the Board.

The second item of business is a proposal for the approval of an adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies. It is now 12:04 p.m. Central Time on Thursday, August 13, 2026, and the polls are now open with respect to Proposals 1 and 2. I hereby declare the polls open. You may vote your shares during the meeting online through the virtual meeting platform. You will need the 15-digit control number included on your proxy card or your 4-letter invite code in order to vote on the virtual meeting platform.

[Voting]

Now that everyone has had the opportunity to vote on Proposals 1 and 2, I now declare the polls closed with respect to Proposals 1 and 2.

Mr. Munoz and Mr. Wilk, our Corporate Secretary, hold proxies representing a majority in voting power of shares present for voting on Proposals 1 and 2, and we have voted these shares accordingly. Proposals 1 and 2 each received an affirmative vote of a majority of the issued and outstanding shares of common stock present or represented by proxy and entitled to vote thereon at this meeting. I therefore declare that Proposals 1 and 2 are approved.

On behalf of GameSquare's Board of Directors, I would like to thank you for your support of GameSquare Holdings, Inc. and for attending our meeting today. I declare the meeting concluded.

This concludes the meeting. You may now disconnect.

Good afternoon and thank you for joining us for the GameSquare Holdings 2026 Second Quarter conference call. On the call today, we have Justin Kenna, GameSquare CEO, and Mike Munoz, CFO. [Operator Instructions] 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 more information about forward-looking statements and risk factors, please see our 10-K for the quarter ended June 30, 2026, 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 CEO, Justin Kenna. Justin, please go ahead.

Thank you and good afternoon to everyone joining us on today's call. GameSquare delivered a strong second quarter that marked an important step forward in our financial performance. Revenue increased 137% year-over-year to $18.5 million. Gross margin expanded by nearly 20 percentage points to 49% and adjusted EBITDA improved to a second quarter record of $1.0 million.

These results were ahead of our expectations and represented a meaningful acceleration from both the first quarter and the prior year period. Most importantly, our second quarter results demonstrate that GameSquare is generating profitable growth from its underlying operations. Our performance also reflects the strengths of the integrated platform we've built and the early benefits of recent acquisitions, including Click and TubeBuddy.

Click has expanded our creative marketing, talent management, and campaign execution capabilities, while TubeBuddy adds a high-margin technology and SaaS layer that supports creators and publishers with workflow analytics, optimization, and AI-enabled tools.

Together with Stream Hatchet's data, measurement, and creator intelligence capabilities, these businesses position GameSquare as a differentiated entry point into the creator economy, helping brands and publishers identify the right creators, activate campaigns, optimize content, and measure performance through a single platform. Our second quarter results are encouraging and we're excited as we enter the seasonally strong second half of the year.

So I want to use my time today to review our second quarter performance in more detail, discuss the progress that we're making across the business, and provide an update on our expectations for the balance of 2026. GameSquare's profitable growth in the second quarter demonstrates that our operating strategy is producing the intended results. As revenue scales a higher margin business mix and prudent operating expense management are driving meaningful operating leverage across the platform.

This progress reinforces our confidence in the scalability and earnings potential of our operating model. When combined with our strong financial position, we believe we have the resources and flexibility needed to continue investing in high return growth initiatives, including technology, premium intellectual property, creator relationships, and other opportunities that can deepen customer engagement, expand margins and create long-term shareholder value.

Talent remains an important growth engine for GameSquare and a key differentiator of our platform. During the second quarter, we continued to expand Click's roster with the signing of SypherPK, one of the world's largest and most influential gaming creators. Sypher reaches more than 20 million followers and subscribers across YouTube, Twitch, Instagram and other major platforms, making him Click's highest profile creator addition to date.

The addition of Sypher builds on the momentum we just saw last quarter, including the appointment of Justin Miclat as Chief Growth Officer of Click, and the signing of Steak, the second largest Roblox creator. Together, these additions have expanded Click's creator network to more than 60 million followers across major social platforms, premium creator inventory available to our brand partners.

They also create additional opportunities across brand partnerships, content live experiences, commerce and intellectual property. Our talent strategy is also expanding beyond gaming into athlete and lifestyle creators, where we are building a sizable pipeline.

A recent example is a new partnership that we were able to get for UFC athlete Max Holloway with Whatnot. These adjacent categories broaden our audience reach and create additional opportunities to monetize talent across content, commerce, sponsorships, and experiences. As we scale these relationships across GameSquare's platform, we believe that talent can drive higher value programs, greater campaign volume and attractive operating leverage.

Our integrated platform continues to drive strong commercial momentum. Why? One recent example is our work with Marvel on the Marvel Rivals Ignite 2026 Mid-Season Finale. Following quarter end, GameSquare produced a 4-day global esports event in Los Angeles, providing turnkey production and talent management, as well as monetization services across sponsorship sales, ticketing and merchandise.

The event generated approximately 699,000 hours watched, reached peak concurrent viewership of 54,600 and was distributed across 64 channels in more than five languages. The relationship is an important validation of GameSquare's platform. Marvel, part of The Walt Disney Company, trusted GameSquare to create and deliver a major global competitive moment around one of the world's most recognized and carefully protected intellectual properties.

Our team managed the event end-to-end, including event design, broadcast, tournament operations, venue logistics, sponsorship integration, talent management, and real-time measurement through Stream Hatchet. This is the type of opportunity our integrated platform was built to support by helping leading IP owners activate and monetize their properties across live experiences, content, creative sponsorship, merchandise, and data-driven measurement with one partner accountable for execution.

The successful mid-season finale also positions us to build on the relationship as the Marvel Rivals competitive season advances toward the Ignite Grand Finals later this year. Beyond Marvel Rivals, we have booked a broad range of additional high-profile projects we expect to contribute to second half revenue growth, including a new relationship with Tencent, with our influencer marketing business, our selection to produce the first ever innovation awards at the upcoming Roblox Developer Conference, support for a Red Bull event featuring our newly signed talent, SypherPK, and a renewed relationship with Rekt for 2027.

We also expect the second half to benefit from the expansion of FaZe Esports, new strategic marketing services and creator and community activations in conjunction with TikTok for an upcoming NBA gaming crossover event in LA with leading NBA talent. These projects add to recently announced wins with Riot Games, the Esports World Cup, the U.S. Army and Corsair. More broadly, GameSquare has developed a proven track record bringing to life leading gaming entertainment and sports IP, including work with Fortnite, Roblox, Marvel Rivals, LEGO, and the Dallas Cowboys.

Across these relationships, we combine creators, content, live production sponsorships, experiential execution, data and measurement to create compelling fan experiences and commercial programs. This capability is becoming an important differentiator and a source of larger repeatable opportunities across our ecosystem. Our recurring client relationships are also strengthened.

Our agency of record clients have maintained a 100% renewal rate to date in 2026, and our content division is on track for a record year, supported by work for TurboTax, HyperX, Roblox, and Marvel Rivals. In parallel, we are expanding access to premium IP and commercial rights through World of Dance, the Esports Awards and the Mobies, creating differentiated inventory that can be monetized across multiple parts of the GameSquare ecosystem.

We are encouraged by the visibility we have into the seasonally strongest second half of 2026. Our confidence is supported by booked programs across GameSquare Experiences, influencer marketing, our content team, esports, talent and technology, as well as a growing pipeline of global brands, publishers and IP owners.

Historically, approximately 60% of our revenue has occurred in the second half of the year, and current activity reinforces our confidence in our full-year plan. We are also expanding our creative and strategy capabilities in the UK with the addition of Tom Wilde, who brings experience from Publicis and Mindshare. This strengthens our ability to serve clients across Europe and supports a disciplined international pipeline.

We're also developing opportunities in additional markets, including the Middle East, and we'll pursue expansion where we can leverage our existing platform efficiently and importantly, profitably. Our talent pipeline and technology products provide additional growth opportunities.

Click's expanding roster creates new brand partnerships, content, commerce, and experiential opportunities, while Stream Hatchet's creator communities extends our capabilities from analytics into creative discovery, activation, and campaign management and performance reporting. We expect initial commercialization efforts to begin contributing during this second half.

TubeBuddy is also showing encouraging early results from its new AI-powered video ideation tool, which uses creators' proprietary channel data, audience comments, and identity to generate personalized data-backed recommendations. Since active marketing began in early July, TubeBuddy has experienced approximately 10% increase in new subscribers, while users who activate the feature have converted to paid subscribers at roughly 10 times the rate of non-activated users.

These results support our view that AI-driven product innovation can support engagement, conversion, and recurring technology revenue. Together with Stream Hatchet's creator intelligence and campaign measurement capabilities, TubeBuddy strengthens GameSquare's position as an entry point into the creator economy for brands, publishers, and creators. Collectively, our booked programs, recurring customer relationships, expanding talent pipeline, and developing technology offerings provide meaningful visibility into the balance of the year.

We expect to announce additional customer wins, creative relationships and commercial partnerships over the coming months. Combined with improving operating leverage, this pipeline reinforces our confidence in continued growth and again, importantly, profitability.

As GameSquare's operating platform continues to scale and generate improving profitability, our capital allocation strategy is also evolving. Our objective is to allocate capital towards the opportunities we believe offer the most attractive risk-adjusted returns and the greatest potential to create long-term shareholder value.

We remain optimistic on the long-term potential of ETH and other digital assets, as well as revenue opportunities from a growing pipeline of Web3 and on-chain brand customers. At the same time, we recognise that digital asset values can be volatile and are largely influenced by external market conditions.

As a result, we tend to opportunistically monetize portions of our digital asset treasury when we believe the capital can generate a more attractive return elsewhere.

We started to do that, which is hopefully being, you know, evidenced by the PR around, you know, some of the liquidity within our ETH holdings and also, you know, our recent buybacks of our share repurchase program. Our current priorities include repurchasing GameSquare shares when we believe they trade at a meaningful discount to the underlying value of the business and investing in high return growth initiatives across our operating platform.

These uses of capital are more directly within our control and allow us to leverage the capabilities, customer relationships and intellectual property we've built to drive revenue growth, margin expansions and increase profitability.

Since the beginning of our repurchase program, we have repurchased more than 8.8 million shares for approximately $4.1 million, including 2.8 million shares during the second quarter and an additional 1 million shares in July. We believe repurchasing shares at attractive valuations can be a highly accretive use of capital particularly as the underlying operating performance of the business continues to improve. Ultimately, our approach is not based on maintaining a fixed allocation to any one asset class.

We will continue evaluating the relative return potential of our DATs, share repurchases, organic investments and strategic opportunities, and we'll deploy capital where we believe it can create the greatest value for shareholders. In addition to deploying capital thoughtfully, we are taking steps to preserve the flexibility needed to support GameSquare's long-term growth.

As disclosed in our recently filed proxy statement, stockholders will vote at an August 13 special meeting on authorizing the board to enact a potential reverse stock split, if necessary, to regain compliance with Nasdaq's minimum bid price requirement.

Beyond supporting our continued Nasdaq listing, a potential reverse stock split provides a flexibility to support a more appropriate share price, and potentially broadening GameSquare's appeal to institutional investors whose investment mandate may limit their ability to own lower-priced securities. Overall, our second quarter results demonstrate that GameSquare is building a larger, higher margin and increasingly profitable operating platform.

We're encouraged by the progress across the business and believe our improving financial performance and evolving capital allocation strategy position us well to invest in growth while creating value for shareholders. We remain focused on disciplined execution and converting our strong commercial momentum into sustained revenue growth, operating leverage and profitability. So, with this overview I'll turn the call over to Mike to review our 2026 second quarter financial results. Mike.

Thanks, Justin. Our reported results for the second quarter of 2026 reflect the strategies underway to drive profitable growth. Total revenue was $18.5 million compared to $7.8 million in the prior year period. The 137% year-over-year increase was primarily driven by the acquisitions of Click and TubeBuddy, as well as growth across our marketing agency and owned and operated IP operating segments. The reported gross margin for the 2026 second quarter was $9.0 million or 49% of sales compared to $2.3 million or 29.4% of sales for the same period last year. The significant increase in gross margin reflects a mix of higher margin sales and our ongoing focus on profitability.

Adjusted EBITDA for the 2026 second quarter was positive $1.0 million compared to an adjusted EBITDA loss of $3.2 million for the same period last year. The $4.2 million improvement reflects a combination of revenue growth, higher blended gross margin, and greater leverage on fixed operating expenses.

As of June 30, 2026, we had cash and cash equivalents and digital asset treasury assets of $25.9 million. I am pleased with the progress we are making in growing sales and improving profitability. GameSquare has a strong financial position and liquidity to pursue strategic initiatives, invest in our operating platform, and return capital to shareholders. So with this overview, I'll turn the call back over to Justin.

Thanks, Mike. Based on the momentum we see across the platform, our confidence remains strong and we're encouraged by how 2026 is shaping up. On a pro forma basis, which reflects our plans for the TubeBuddy business, we are reiterating our previously announced annual guidance for fiscal year 2026.

We expect revenue in the range of $85 to $90 million, with gross margin of 35% to 40%, and adjusted EBITDA of over $5 million. Our outlook reflects continued organic growth and improving year-over-year profitability. With the structural efficiencies we've implemented and the operating discipline now embedded across the organization, we believe that we are well positioned to scale profitability as the business grows.

Our focus remains on executing against our booked pipeline, converting growth into sustained, positive, adjusted EBITDA, and importantly, cash flow, and allocating capital toward the opportunities we believe offer the highest returns for shareholders. So with this overview, Mike and I are happy to take your questions. Operator, please open the call to questions.

[Operator Instructions]

The first question comes from Jack Vander Aarde with Maxim Group. Please go ahead.

Okay. Justin, Mike, congrats on the strong growth and outlook. Good to see the momentum continuing. So I guess, Justin, the guidance that you've reiterated implies an even stronger growth ramp in the back half of the year, which is seasonally normal, but still very strong. Can you maybe, you touched on some examples.

There's quite a few examples that are driving this that you're excited about, but maybe just can you speak to the pipeline and any key industry catalysts that maybe support that implied growth ramp? You touched on Marvel Rivals and Tencent and Roblox and you've got GTA VI launching, I believe, in November. We'd love to hear your thoughts in more specific catalysts.

Yes, for sure. Thanks, Jack. And you also part answered your own question. So I also appreciate that. But, you know, I think that, as you sort of mentioned, you know, that's sort of historically been important -- I wouldn't say that quarter on quarter there's enormous seasonality in our business, but historically back half of year being a little stronger than first half of the year has proven to be the case year on year. And, you know, part of that is that there's more live events and esports tournaments.

You have a holiday season with merch and consumer products. You have that flow-on effect of these branded ad budgets where you get those late dollars in the year that kind of open up with those budgets and last minute sort of scramble dollars. So we've really seen that across the board year on year.

So we're really confident there, but most importantly, I think, you know, sort of internally, we've got more revenue locked in than ever before, right? So we've got retainer relationships, you know, of those AOR relationships that, we have such a high retention rate on, which I think is just, such a huge shout out to our team and the incredible work that they do and execute on is that, you know, we don't lose clients and we often say that.

I think that's proof of that. But Dairy MAX, Jack in the Box, Roblox, Rekt, Azuki, all of these. Having a really nice layer of recurring revenue locked in gives us great confidence.

We touched on Marvel Rivals and the incredible work that the team did there. There's a much larger opportunity in December there with the finals, which we're working toward. You know, at the moment, we've got, you know, multiple events at Roblox and the list goes on.

So, yes, we've got great visibility into the back half of the year. I think there's some opportunities, certainly, for outsized growth beyond our guidance. But, we want to stay conservative and beat our numbers and continue to do so. And I think, we proved that out in Q2. We're confident we'll be able to do that in the back half of the year. So, yes, I hope that answers your question.

I think there's certainly macro factors, but, beyond macro, just really confident the way we've been able to execute the visibility we've got on the rest of the year and our ability to get our hands on more IP. We're being trusted by these world-class publishers and IP owners to go and execute against IP and I think that's an area of growth you'll certainly see is our ability to bring IP in the house and monetize it.

Excellent. No, that's great color, Justin. And maybe just two more quick questions. As a follow up, maybe you talked about the pipeline, how that's in revenue being locked in. Can you maybe just touch on our deal sizes, average deal sizes, are there synergies between, I guess, some of the businesses that you've acquired and integrated now as well? Just touch on like kind of just the -- I guess the evolution of your average deal sizes and that visibility in the pipeline?

Yes, for sure. Great question. Average deal size has absolutely increased and something that we monitor internally and we can start to track and include in these calls as well. So I think it's a good point. It gives great visibility into the progress. So we can provide some more clarity there as KPI moving forward. But yes, I think what's really pleasing, and you kind of touched on it there, Jack, is our ability to integrate into the GameSquare ecosystem.

So being able to bring Click and TubeBuddy in. Click will double revenue this year by being part of the GameSquare ecosystem, right? We've been able to sign massive U.S. talent. We're now looking at lifestyle and athlete talent, I think. Obviously, there's huge benefit on the GameSquare front by bringing Click in.

But equally, I think the Click team has just seen this enormous pipeline of activity that is generated from GameSquare, and that really is great evidence of our ecosystem working, right? These bigger names that we talk about, Epic Games with Fortnite, Roblox, the Creator Showdown, pieces of IP that we have created, Marvel Rivals.

These are great examples of The GameSquare ecosystem working, right? This is not just -- hats off to our agency team, but they are partnering with our data business. So we can measure absolutely everything we do. Integrating in creators from Click. Executing with our own production team.

Overlaying with our own media, and that is the GameSquare ecosystem working. So that's really pleasing to see. It is not that we are getting outsized growth from any one area, it is that the GameSquare ecosystem is working.

We are upselling, we are cross-selling, we are working as a team, and I think everybody within our four walls understands that is how we are going to win, and that is how we are winning. So yeah, really pleased to see that. Can certainly provide more information around average deal size by segment and overall blended by GameSquare, but it is certainly increasing.

We are a bit more selective now, Jack, with some of the work that we are taking on. Three, four years ago, we would be out there sort of fighting for RFPs and taking on any client work. We are selective now with the work that we do. We are targeting bigger projects, and we want to be more strategic with our clients, which ultimately delivers better results for them and helps us expand our margins.

Excellent color. Just one more quick one. I appreciate your comments earlier about the capital allocation strategy, and you obviously have continued share buybacks and a strong debt asset portfolio.

You recently, it sounds like successfully have integrated Click and TubeBuddy and you've been active in M&A in the past. Just any updates or how are you thinking about M&A going forward? Thank you.

Yes, so I think it's sort of two parts to that. One on the capital allocation piece. If anyone of you missed it, we have started liquidating some of our ETH. We do still have a large holding, which you can see in the press release. I think the reality for us is that we're extremely undervalued.

We do feel bullish about the news that we've got coming, the results that we're proving out. And so we are certainly hopeful that we're going to start to get reward for effort. But like I mentioned last time, we are willing to take that into our own hands and continue to liquidate further and buy additional shares back.

So I'm sure that you will see in conjunction. We've got a very healthy, you know, ETH balance there. But the priority is our operating business. We've said that since day one. We're proving that out. And so I think people will continue to see that. From the feedback I'm getting is that many shareholders will be happy to hear that. M&A, sort of similar story, Jack. Obviously, can't share too much.

I would say that we are actively looking at a couple of interesting acquisitions that could help get us to scale. Like always, I'd say we're extremely cognizant of dilution. So, you know, we only approach these conversations from a relative value standpoint. We know how undervalued we are. We are not going to go and acquire an entity for a headline value, right?

It would need to be relative value, understanding that, we are undervalued and this is a 1 plus 1 equals 5 situation. In saying that, I think there are, we're a very attractive buyer, I think we've got a great name in our space, we're getting more and more market share. Obviously, having access to capital markets, a clean balance sheet, clean cap table and a great board, it's pretty attractive.

We're certainly always looking at ways to get better. I'd say that we feel really comfortable from where we sit in terms of our ability to execute from a service provider standpoint within the space. Something that we think is pretty interesting is getting our hands on more IP.

So I think that's something to look for, whether that's bringing IP in-house that we can directly monetize or continuing to partner with IP holders and owners and some of which we've announced recently. So, you know, I'd say certainly active in that space, Jack.

Certainly looking at ways to get better, cognizant of dilution, but really want to get to scale. So I certainly would sort of think about it from that aspect. Certainly from an aspect that we would only consider accretive deals, nothing that's burning cash. We really, we're close here to starting to generate quarter-on-quarter cash to shareholders, and that's really where we want to get to and get to quickly.

The next question comes from Greg Gibas with Northland Securities.

I appreciate your commentary on share purchases and just how you view the stock.

I wanted to maybe follow up on guidance, on the other hand, as it relates to what's maybe changed since you last reported and how you're kind of interpreting the situation of the growth pipeline that is, and perhaps how you're viewing Q3 versus Q4 cadence?

Yes, Greg, I would say that we're more confident in guidance today and certainly in our pipeline than we've been at any point from the time of coming out with guidance to today. We're extremely confident in achieving and exceeding guidance. I think that there was a conversation around increasing guidance, but we want to stay on the conservative side of things and beat our number. As you all know, Q2 is ahead of target, right?

We're kind of ahead of where we thought we would be, and we're certainly ahead of where we thought we'd be in terms of pipeline and locked in recurring revenue. So all of that is really pleasing.

But we're certainly still frustrated by where we trade, and we want to get to scale and we want to blow the doors off this thing is the reality. So we feel really confident in it. But we do -- we obviously want to remain somewhat conservative and continue to deliver and continue to beat the number.

So yes, extremely comfortable in sort of how things are tracking. Back half of the year shaping up really -- it's going to be really healthy. So I would think of Q4 as historically, it's been our largest quarter and there's a number of sort of large projects that will -- they may sort of straddle the line of Q3 and Q4, but we'll probably live in Q4.

I would expect Q4 to be the largest quarter of the year, but kind of holding firm on the fact that the back half of the year is sort of 60%, front half, 40%. I think it's -- you start to think about that operating leverage, right? I don't think you're not going to see much of an increase, if any, from an OpEx standpoint into Q3 and Q4 in comparison to Q2. I think that's kind of a pretty good way to think about our OpEx -- there may be some slight fluctuations, but it's not going to be material.

So I think we start to get a bit of operating leverage, you get a bit of growth in revenue. So certainly 60-40 back half of the year, and I would expect Q4 to be larger than Q3.

Great. Understood. That's very helpful. Appreciate the color, Justin. And along the lines of kind of what you spoke to is being very comfortable with, I guess, locked in or more recurring revenue. Are you able to maybe provide an idea of kind of what within guidance is implied -- or sorry, what is more recurring revenue implied by guidance? Like how much is kind of reflected there versus what's more variable?

Yes, It obviously fluctuates based off entity. I'd say from a blended margin standpoint, we're probably around 70% of book locked in revenue. And that 30%, I'd say our pipeline would suggest that we'll sort of far exceed that. But I think that if you looked at this two, three years ago, we would probably be around 30%.

So I think that has been a huge improvement and increase for us going to having such a large amount of revenue locked in as we sit here today, kind of early mid-Q3, knowing a lot of what our Q4 looks like. Now there are three bigger programs some upside, some pipeline, things that always can come in last minute, but obviously pleasing to know that if nothing additional or new was to come into the business, that there's a large amount of sort of revenue that already exists and we're well on the way to kind of hitting that target.

And that's a combination of, I think, the incredible work that our agency business does, specifically kind of that retainer agency of record portion of that in addition to some of these acquisitions, right, with obviously, Stream Hatchet has always had sort of really high retention, but obviously also now bringing in TubeBuddy for its first quarter, which also should mention as you kind of look at the numbers and dissect big peaks from revenue, OpEx is probably gone up a little bit because you've got the full quarter of TubeBuddy, but relatively, this is a margin -- our margin expanded in Q2, and that's for the SaaS business, that's close to 90% margin, 88% margin. So yes, it's a few factors, but certainly really pleasing.

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

Thanks, everyone, for joining today's call. I'll keep this short and sharp. I'm sure you've heard enough from me today, but we appreciate the continued support. Hopefully, our results reflect the incredible progress that we're making.

We're ahead of target halfway through the year. Pipeline is increasing. We're building meaningful long-term strategic relationships with world-class game publishers and clients, and we expect that to continue. So again, elephant in the room is the share price. We're undervalued. We know that. We feel really bullish. And again, we talked about the capital allocation strategy.

We'll continue to look to allocate capital to buy back our stock until we break the back there. And I think that -- our focus is on long-term shareholder value, and we're going to get there.

So thank you again for the support, and we're really looking forward to catching up and providing progress on Q3. And I'm sure you'll see and hear plenty of news from us between now and then.

So thanks to everyone.

This brings to a close GameSquare's 2026 Second Quarter Financial Results Conference Call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Hello, and welcome to the Annual Meeting of Stockholders of GameSquare Holdings, Inc. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of the same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions]

It is now my pleasure to turn today's meeting over to John Wilk, the Corporate Secretary of GameSquare Holdings, Inc. The floor is yours.

Good morning. I am John Wilk, the Corporate Secretary of GameSquare Holdings, Inc. And on behalf of the company, I would like to welcome you to our 2026 Annual Meeting of Stockholders. This meeting is now formally called to order, and I will chair the remainder of this meeting.

During this meeting, shareholders participating online are welcome to submit questions through the virtual meeting platform by clicking on the Q&A tab, typing your question and clicking submit. Questions pertinent to the meeting matters will be answered after the proposals for today's meeting have been presented. Please limit your remarks to the items of business before us.

The general order of business today will be to confirm proper notice was given for this meeting and that a quorum is present to transact business. We will then accept the motions to be considered and receive a report about the voting results. Mr. Munoz, the company's Chief Financial Officer, will present the notice of this meeting and report as to its mailing.

I have received an affidavit of mailing duly signed and sworn by Computershare Investor Services, Inc., indicating that the notice of the Annual Meeting of Stockholders, along with the company's proxy statement, form of proxy card and 2025 annual report to stockholders were mailed or made available on or about April 30, 2026, to each stockholder of record as of April 23, 2026. This Annual Meeting of Stockholders is being held for the purposes set forth in the notice of the Annual Meeting of Stockholders. A final report of the voting results from the meeting will be set forth in a Form 8-K filed with the Securities and Exchange Commission within 4 business days following the company's receipt of the final voting results from the meeting.

Thank you, Mr. Munoz. The notice of this meeting and the affidavit of the mailing of the notice of this meeting and the other proxy materials are hereby made part of the minutes of this meeting.

Mr. Munoz, please report on the attendance at this meeting.

There were 93,470,215 shares of the company's common stock outstanding on April 23, 2026, and entitled to vote at this meeting and 5 million shares of the company's Series A2 preferred stock outstanding on April 23, 2026, that are entitled to cast 19,300,000 votes at this meeting. I have been advised by our inspector of election that there is at least 1/3 of such shares of the company's stock outstanding representing in person represented in person or by proxy at this meeting, constituting a quorum.

Thank you. Notice of the Meeting has begin there is a quorum, and therefore, this meeting is lawfully convened and ready to transact business.

The first item of business is the election of 2 Class II members to our Board of Directors, each to serve a 3-year term and until their successors are duly elected and qualified, subject to earlier resignation or removal. The Board's nominees for Class II directors are Justin Kenna and Stuart Porter. The nominations are closed since no other nominations have been received in accordance with the company's bylaws.

The second item of business is the ratification of the appointment of Creston GTA as independent registered public accounting firm to audit the company's financial statements for the fiscal year ending December 31, 2026. The third item of business is the approval by advisory vote of the compensation of the company's named executive officers as disclosed in the proxy statement. The next item of business is to approve the merger agreement with the company's wholly owned subsidiary for the purpose of restating the company's certificate of incorporation to, among other things, increase the number of authorized shares, eliminate supermajority voting requirements and to amend the certificate of incorporation, declassify the Board of Directors and implement other nonmaterial specified changes. This proposal requires the affirmative vote of the majority of the voting power of all outstanding shares of stock of the company.

It is now 1:05 p.m. Central Time on Thursday, June 18, 2026, and the polls are now open with respect to proposals 1 through 4. I hereby declare the polls open. You may vote your shares during the meeting online through the virtual meeting platform. You will need the 15-digit control number included on your proxy card or your letter invite code in order to vote on the virtual meeting platform.

[Voting]

Now that everyone has had the opportunity to vote on proposals 1 through 4, I now declare the polls closed with respect to proposals 1 through 4. Mr. Munoz, and I hold proxies representing a plurality of votes cast for Romanette I for the election of Mr. Kenna and Mr. Porter, and we hold proxies representing a majority in voting power of shares present for voting on Proposal 3 and for ratification of Proposal 2. And we hold proxies representing a majority of the voting power of all outstanding shares of stock of the company for voting on Proposal 4, and we have voted those shares accordingly.

I therefore declare that each director nominee has been elected to serve as a director of the company until the 2029 Annual Meeting of Stockholders and until their successors are duly elected and qualified. However, upon approval of Proposal 4, the company's restated certificate of incorporation will become effective, which will eliminate the classified structure of the Board and provide that beginning with the 2027 Annual Meeting of Shareholders, all directors will be elected annually for 1-year terms. Next, Proposal 2 is ratified. And finally, Proposal 3 and 4 are approved.

On behalf of GameSquare's Board of Directors, I would like to thank you for your support of GameSquare Holdings, Inc. and for attending our meeting today. I declare the meeting concluded.

This concludes the meeting. You may now disconnect.

Good afternoon, and thank you for joining us for the GameSquare Holdings 2026 First Quarter Conference Call.

On the call today, we have Justin Kenna, GameSquare's CEO; and Mike Munoz, CFO. [Operator Instructions]

Before management discusses the results, I would like to remind everyone that certain statements on 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-K for the quarter ended March 31, 2026, 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, please go ahead.

Thank you, and good afternoon to everyone joining us on today's call. GameSquare is off to a solid start in 2026. Our first quarter results were in line with our expectations during what is typically the seasonally slowest period of the year, and we're excited by the momentum we're seeing across our platform. Our performance reflects the organic contribution of the integrated business that we've built as well as the early benefits of recent acquisitions, including Click, our creator marketing and talent business and TubeBuddy, our AI-enabled software and workflow platform for creators and brands.

We believe these acquisitions have meaningfully expanded our position in the creator economy, providing our customers with a single entry point for reaching these audiences. Click gives us a deeper ability to identify, manage, deploy and monetize high-value creators for brand and publisher campaigns, while TubeBuddy adds a scaled technology layer that supports creators and digital publishers with workflow analytics, optimization and AI-enabled tools. Together, these capabilities strengthen our ability to connect brands, creators, publishers and audiences through a more complete and differentiated platform.

We are seeing clear evidence that GameSquare's platform is resonating with larger clients and driving bigger opportunities. Within GSX and our broader agency business, average deal size is increasing with 70% of programs now over $200,000, and we've doubled the number of $1 million-plus opportunities. These are larger programs and larger clients, and they are increasingly pulling in multiple parts of our ecosystem, including creators, content, media, data, experiential production and live activations.

Importantly, we believe that this validates GameSquare's strategy to serve as a gateway into the creator economy, combining proprietary data, technology, creator relationships and gaming expertise to help brands reach digital native audiences in more authentic, measurable and scalable ways. We are also continuing to execute a disciplined capital allocation strategy focused on driving growth, improving profitability and creating long-term shareholder value. That includes investing behind the areas of the business where we see the greatest return potential, pursuing strategic M&A and evaluating opportunistic share repurchases when we believe that the market is not appropriately valuing our business.

We continue to expand the talent, technology and capabilities that make GameSquare unique. The recent addition of Justin Miclat as Chief Growth Officer of Click, together with the signing of leading creators such as Steak and others, further strengthens our position at the center of the creator economy. Combined with Click and TubeBuddy, these additions enhance our ability to scale high-value talent, create new monetization opportunities and deliver more integrated solutions for brand partners. We are excited with the direction that we're headed and believe that GameSquare is increasingly well positioned to deliver against our 2026 plan.

With that as a background, I'll use my time today to review our first quarter performance, discuss the progress that we're making across the business and provide an update on our expectations for the year ahead. During the first quarter, we executed against several important strategic priorities and delivered strong financial results that were in line with our expectations. Reported revenue on a year-over-year basis increased by 95% and gross profit dollars expanded year-over-year by nearly 77% or by $2.4 million. The combination of revenue growth and higher gross profit continues to support the development of a more scalable financial model.

Along these lines, we also improved our first quarter adjusted EBITDA loss year-over-year on a pro forma basis. Including the contribution from TubeBuddy, our adjusted EBITDA loss was just $656,000, which was consistent with our expectations for the seasonally slowest quarter of the year. Importantly, these results demonstrate the continued progress that we're making toward a full year of profitability. As a reminder, in February 2026, we announced the acquisition of TubeBuddy from BetLabs in an all-stock transaction. TubeBuddy provides powerful search engine optimization, workflow analytics and productivity tools powered by proprietary AI, which are used by creators and digital publishers to grow, manage and monetize their content. The acquisition adds a scale creative technology layer to our technology platform, which we believe will accelerate our strategy to build an integrated ecosystem, spanning content, community, data and performance marketing.

Importantly, the accretive acquisition of TubeBuddy demonstrates the evolution of our M&A strategy. As our scale increases and our capabilities expand, we are focused on pursuing compelling operating assets that we expect to be accretive to earnings. Just this morning, we announced the appointment of Justin Miclat as Chief Growth Officer of Click and added several major creators to Click's roster, including Steak, the second largest Roblox creator. The newly added talent is expected to generate more than $5 million of incremental annualized revenue while enhancing GameSquare's ability to connect leading creators with global brands through its integrated platform spanning talent management, data analytics, creative services and experiential activations.

These additions provide several important benefits to GameSquare. First, Steak and other recently added creators expand our reach. Secondly, Justin brings a proven track record of scaling and monetizing leading digital talent. Thirdly, these additions create profitable creator-driven revenue streams with attractive operating leverage. And finally, they reinforce GameSquare's ability to consistently attract and retain top-tier talent in an increasingly competitive market. Adding high-impact creators materially expands our presence and enhances our ability to drive higher-value brand partnerships, increase campaign volume and improve monetization across our platform. These positive trends reflect the strength of our platform and our ability to consistently attract and retain top-tier talent in an increasingly competitive market.

Our integrated platform is driving strong momentum as we provide valuable solutions that connect brands, creators and consumers at scale. One of the clearest examples of this progress was the performance of our GameSquare Experiences division, or GSX, which generated record first quarter 2026 bookings of more than $10 million. This performance was driven by continued demand from leading video game publishers and global brands seeking to connect with Gen Z and digital-first audiences through authentic measurable campaigns. Importantly, GSX currently serves many of the largest video game publishers in the world, underscoring the relevance of our platform within the global gaming ecosystem.

GSX is a strong example of how GameSquare's integrated platform is translating into real commercial momentum. The division brings together creators, content data, media strategy, consumer products and large-scale experiential execution to help bridge digital influence with real-world engagement. During the quarter, GSX executed a range of live events, hybrid experiences and digital-first campaigns designed to connect online and offline communities.

Other recent customer and partnership wins further validate the growing momentum we are seeing across GameSquare's ecosystem. During the quarter, we announced the fourth annual renewal of Zoned's long-standing partnership with Dairy Max, reflecting the continued value we are delivering to recurring brand partners. We also expanded our partnership with Capcom to support the global launch of Resident Evil Requiem, the newest title in the globally recognized Resident E franchise.

In addition, we continue to see strong execution across FaZe Esports. FaZe won the Six Invitational 2026, paying over $1 million in prize money, which contributed to revenue in the first quarter. This marks the second consecutive year that FaZe Esports has earned the title of World Champion, and we believe it is powerful validation of FaZe's position at the top of global competitive gaming.

Now, on to Q2. Positive first quarter trends recently accelerated, and we are encouraged by the growing momentum we are seeing early in the second quarter and the visibility we are building for the balance of the year. We believe our integrated platform is resonating with brands and publishers as they increasingly look for measurable creative-led solutions that combine digital reach, real-world engagement and authentic connections with Gen Z, Gen Alpha and millennial audiences. Recent wins include the continued expansion of our work with several leading global video game publishers. We've already started multiple new programs that are expected to contribute to second quarter sales, while also building a broader pipeline of opportunities for the second half of the year. These programs reflect the increasing demand we see for GameSquare's ability to combine creative content, live experiences, media, data and production into integrated campaigns that engage both digital and IRL audiences.

In addition to the momentum we are seeing with individual publisher programs, we are also building a strong track record helping leading game publishers and brands launch, promote and extend engagement around major titles and gaming communities. This includes identifying and procuring the right creators, developing the creative strategy and helping deploy campaigns across content, media, live experiences and community channels. During the first quarter of 2026, this area of the business generated approximately $2.2 million of revenue. This includes recent programs for Capcom, Ubisoft and other leading game publishers. We expect this to be a major contributor into Q2 and certainly in the back half of 2026.

We are also gaining strong traction in what we view as an important IP creation opportunity for brands and publishers. Programs such as Into the Zone for Epic Games and the Roblox creator Showdown demonstrate our ability to develop original repeatable formats that can be monetized across multiple aspects of the GameSquare ecosystem. These properties bring together creators, publishers, brands, content media, live experiences, sponsorships, production and community engagement in a way that creates multiple high-value revenue opportunities across our platform. Importantly, these programs are a strong proof of our land and expand strategy. Across Into the Zone and Roblox creator Showdown, we have developed multiple pieces of IP with our clients, supporting approximately 10 events globally in 2026 and generating approximately $5.5 million of revenue to date. We have already locked in events in the U.S., Germany and London with an event in Brazil coming, highlighting both the global production capabilities we have built and the opportunity to expand successful programs into additional markets, formats and commercial relationships over time.

We are also seeing strong momentum at Click. With the recent addition of several high-profile creators, Click is positioned to deliver, what we expect in Q2, to be the largest quarter in its history. The timing of these additions, combined with the appointment of Justin Miclat gives us added confidence in our ability to scale talent, improve monetization and drive higher-value brand partnerships with a focus on the U.S. market. A recent example of Click's growth is the expansion of hungryboy Hot Sauce, the viral hot sauce brand from YouTube Collective of The Boys, which launched in November of 2025 across HGV grocery stores and has since expanded to Spencer's and nearly 300 World Market stores. This success highlights our ability to convert creator influence into scalable consumer products, retail distribution and incremental monetization opportunities.

We expect to add additional commercially relevant creators to our platform during the second quarter, further expanding a talent ecosystem built to drive brand partnerships, consumer products, content and experiential revenue. Within Stream Hatchet, we recently launched Creative Communities, which is a new way of handling the entire creator marketing process in one place from creative discovery and onboarding to activation and reporting. As campaigns become more data-driven and performance-focused, companies are looking for platforms that can manage creator discovery, drive positive campaign execution and provide performance analytics in a single workflow. Creator Communities represents the next step in Stream Hatchet's evolution from a data analytics platform into a broader creator marketing platform. We expect this new AI-enabled platform to begin generating revenue in the back half of 2026.

Finally, we are seeing growth from brands and video game publishers across the globe. This includes meaningful opportunities across the Middle East and Asia within our agency business. As I mentioned before, our events business is producing multiple activations globally that coincide with some of the year's biggest cultural events. In addition, GameSquare will once again be well represented at this year's esports World Cup, which will take place from July to August and will feature a record-breaking $75 million prize pool.

As you can see, we believe that we are well positioned for a strong second quarter and an even bigger second half of 2026. We are attracting and retaining leading brand and publisher relationships, scaling creator-led and experiential offerings and converting our position in gaming and youth culture into measurable commercial opportunities. With increasing visibility into the second quarter and the back half of the year, we remain extremely confident in our ability to execute against our full year sales and profitability outlook.

Before I turn the call over to Mike, I want to briefly mention our upcoming Annual Meeting of Stockholders, which will be held virtually on June 18, 2026. Stockholders of record as of April 23, 2026, are eligible to vote. Your vote is important. In addition to the routine matters being voted on, stockholders are being asked to approve a proposal that would allow us to restate our certificate of incorporation and make several governance and corporate structure updates. These include eliminating supermajority voting requirements, to amend our certificate of incorporation, declassifying our Board of Directors, increasing the number of authorized shares and making other nonmaterial changes.

I want to emphasize that we believe this proposal is important to GameSquare's continued evolution as a public company. Importantly, we understand there may be some misconceptions around the proposal, particularly as it relates to the increase in authorized shares. Increasing authorized shares does not mean these shares are being issued nor does it mean the company is automatically diluting stockholders. Rather, it is intended to provide GameSquare with appropriate flexibility to support our long-term strategy, including potential strategic opportunities, growth investments, balance sheet management and other corporate purposes that may create value over time.

We are asking shareholders to take a few minutes to review the proxy materials and vote their shares. Whether you own a large position or a small position, your vote matters and helps ensure your shares are represented at the annual meeting. We appreciate the continued support of our stockholders and encourage everyone eligible to vote to do so as soon as possible.

So with this overview, I'd like to turn the call over to Mike to review our 2026 first quarter financial results. Mike?

Thanks, Justin. Our reported results for the first quarter of 2026 reflect the successful strategies underway to drive profitable growth. Comparing our 2026 first quarter reported results to the prior year, total revenue was $14.5 million compared to $7.4 million. The 95% year-over-year increase in revenue was primarily due to the acquisition of Click and TubeBuddy as well as large growth in our marketing agency operating segment. Reported gross margin for the 2026 first quarter was $5.6 million or 38.4% of sales compared to $3.2 million or 42.5% of sales for the same period last year. The slight year-over-year decline in gross margin was due to the change in revenue by product mix.

Adjusted EBITDA for the 2026 first quarter was $1.1 million loss compared to $0.6 million loss for the same period last year. The $1.5 million improvement reflects the strategies we are pursuing to drive profitable sales. On a pro forma basis, which includes a full quarter contribution of TubeBuddy, revenue was $15.8 million and pro forma adjusted EBITDA loss was just $0.7 million or 4.2% of pro forma revenue. We believe pro forma sales and adjusted EBITDA demonstrate the accretive contribution TubeBuddy will have on our financial performance. As of March 31, 2026, we had cash and cash equivalents and digital asset treasury assets of $35.9 million. GameSquare has a strong financial position with excellent liquidity to pursue strategic initiatives, invest in our operating platform and return capital to shareholders.

With that overview, I'll turn the call back over to Justin.

Thanks, Mike. We continue making progress scaling our business, growing sales and improving profitability. We also remain focused on balancing investment in growth with disciplined actions to create long-term shareholder value. In April, we completed our largest monthly repurchase to date, buying back nearly 2.3 million shares for approximately $1 million at an average price of approximately $0.44 per share. Since initiating the program in October of 2025, we repurchased 3 million shares for approximately $3.5 million at an average price of approximately $0.47 per share.

Following April's repurchase activity, we had approximately $11.4 million remaining under our current authorization, which was expanded on April 14, 2026. We believe recent repurchases reflect both the strength of our balance sheet and our conviction that at current trading levels, GameSquare's share price does not reflect the underlying value of the business that we are building. As a result, we expect to remain opportunistic and disciplined in using our authorization while continuing to invest behind the growth opportunities across our platform.

We are also positioning the company for our next phase of accelerating growth. We are advancing our talent strategy with the addition of meaningful creator relationships that will add $5 million of incremental annualized revenue to our business. We plan to extend our agency and platform capabilities to drive growth in the U.S. and internationally while pursuing opportunities to expand our reach into some of the largest, most high-profile gaming markets. We believe these actions will drive new revenue streams in 2026 and beyond and further establish GameSquare as a scaled leader in the global creator economy.

Based on the momentum we see across the platform, our confidence in the year is increasing, and we are encouraged by how the second quarter is shaping up. On a pro forma basis, which reflects our plans for the TubeBuddy business, we are reiterating our previously announced annual guidance for fiscal year 2026. We expect revenue in the range of $85 million to $90 million with gross margins of 35% to 40% and adjusted EBITDA of over $5 million.

Our outlook reflects continued organic growth and improving year-over-year profitability. With the structural efficiencies we have implemented and the operating discipline now embedded across the organization, we believe we are well positioned to scale profitability as the business grows. We are excited about the opportunities ahead and confident in our ability to deliver sustained value for our shareholders.

So with this overview, Mike and I are happy to take questions. Operator, please open the call up to questions. Thank you.

[Operator Instructions] The first question comes from Jack Vander Aarde with Maxim Group.

Okay. Good to see all the moving pieces seem to be coming together and congrats on the maintained pro forma outlook. Justin, there's a lot to -- you covered a lot of ground there. I'm trying to figure out where I want to start. In terms of the events side of the business, it sounds like there's quite a bit of things mapped out for the rest of this year and with the World Cup coming up as well. With all these new businesses you've acquired including your agency kind of pipeline here, how are you looking at capitalizing and making the most of your events pipeline, including maybe World Cup and other major flagship game releases such as even GTA knock on wood down the road?

Yes. I think it's a great question, Jack. GSX was really formed in 2025, I think the growth of the GSX business has been incredibly pleasing. I think really, it was borne out of an extension of Zoned, our agency business and the 2 partner together hand-in-hand, right? Like being able to -- post-COVID being able to mix that digital strategy with IRL has been extremely important. So to be able to have multiple locked-in events with Epic Games and Roblox and doing new IP with them on both fronts, not only just here in the U.S., but also internationally is incredibly pleasing.

To your point around how we sort of think about moving forward, I think we've got a lot of locked-in revenue there between those 2 major publishers, which is exciting. It also includes some activations around the World Cup. So that hasn't been announced yet. So it's more of a watch this space, but we certainly do. And I think something that we're doing a lot better in bolstering our commercial team is getting out in market really proactively, right, around a lot of these large cultural tentpole moments. So seeing from the gaming space that might be things like GDC, TwitchCon, other big opportunities, but also, obviously, in the U.S. with the World Cup around NFL and Super Bowl with the Olympics coming, we've been really proactive with inventory in pitching not only our current client base, but also new clients. And that's starting to translate into a really healthy sort of revenue pipeline.

So yes, really pleased about how that's progressing. The GSX team working hand-in-hand with Zoned and being able to build out digital strategy but also bring them to life with those experiential and large IRL activations is really pleasing. I would reiterate that our numbers, we're pleased with Q1. But really, for most of those who are tracking the story, there's real seasonality in our business. So a lot of that activity is picking up into Q2 and the back half of the year. So what's really pleasing, Jack, and why we're so confident in these numbers is a lot of that revenue is locked in, right? And so we're seeing a lot of sort of increased activity. We're getting a lot of RFPs at the moment. And so we think there's real upside from there. But certainly, we've got really healthy lock-in revenue, not just around game launches and with game publishers, but as we mentioned, around World Cup and some of the big large cultural moments.

Okay. Great to hear there. And maybe if I could just shift gears, the digital asset strategy. I'm not sure if you've had a chance to digest, but there was some progress made on the Clarity Act in the news today. Can you maybe just touch on your overall digital asset strategy with Dialectic and kind of any thoughts on looking at digital assets to be integrated throughout your core business?

Yes absolutely. So yes, there's been a few catalysts. I think that we see towards the end of last year and start of this year, the markets were hit. And for anybody reviewing the financial statements, obviously, that's the large majority of the net loss, right? The unrealized losses from the fluctuation in those crypto numbers. We haven't been selling it. Like we talked about last time, we sold early on in the game position to pay off our long-term debt. So again, to reiterate from a long-term debt perspective, we're clear that we've got a really clean balance sheet now. We're pretty bullish. I think there's a number of indicators on sort of moving up here. Like you mentioned there, Jack.

But again, I would reiterate, we don't consider ourselves a gap in the traditional sense. There's a number of entities that have acquired Bitcoin or even they're holding crypto into perpetuity. For us, from a balance sheet perspective, it's a cash management strategy, like we talked about, obviously, generating yield off of the E that we hold through Dialectic. But we have a very clear strategy in diversifying into stablecoin that we can generate yield off of and into cash where we want to buy back our shares or invest in growth assets. Our priority is our operating business while remaining bullish in the digital asset space. And again, I would kind of reiterate that flywheel approach that I just don't think others have, right, which is our digital asset strategy has really benefited the core operating business. We've yielded close to $8 million in revenue and new deals from -- since we launched the [indiscernible] with [indiscernible], Zuki and [indiscernible], these Web3 companies that are trying to access Web2 audiences.

So we remain bullish. There's a lot of opportunity for our operating business to drive revenue. We've got a great relationship with Dialectic who return higher than market yields. But in saying that, we'll continue to be opportunistic and look at ways to drive value for our shareholders, right? And I think we've shown that in buying back our shares through accretive M&A transactions. We remain bullish in the space, Jack, but our priority, I think, as we've shown, is our operating business, and we're extremely bullish about being able to scale that.

Okay. Great. And maybe if I could just ask one more. And this could be for Mike as well. Just kind of looking at -- as your business scales, you're definitely a global business now, and you have a lot of events, a lot of different verticals that you're involved with, especially with these acquisitions now. You touched on the Middle East and Asia. Just curious to get a sense of how material are these other regions in the world? Are we in the early innings of this kind of ramp-up? Just touch on all the different things you're involved with in the Middle East and Asia or just a highlight of a couple.

Yes. I can touch on that. Mike can certainly add any color if you would like. I would say that there will be certainly news to come here in the near term. We have a strategic partnership in the Middle East where there will be some more details to come, and I would expect revenue to flow into Q2 and certainly into the back half of the year. I would say that our opportunities in the Middle East are more advanced than those in Asia currently. We're just more early stage, but we are actively having discussions with a number of boots on the ground in China currently, and there's certainly opportunities in multiple facets of our business from esports and partnering with FaZe and licensing that brand into our event capability, which is really grown organically, right, through Roblox and Epic and a lot of the clients we work with, they want to be activating globally. So that's been really organic and really positive.

But in terms of, I'd say, meaningful kind of revenue flow and how advanced these discussions are, Middle East, much more so than Asia at this stage. We're in very active talks with some of the biggest automotive brands in Riyadh and in the Kingdom and trade shows, airlines. There's a real pipeline there, active conversations, and we expect that to kind of be upside revenue into Q2 and certainly in the back half of the year. But I think there's a lot of opportunities in Asia as well. And that's -- I would expect that realistically, Jack, be a Q4 and 2027 impact on the P&L.

Okay. Great. And I said that was my last question. Just one more for clarity. Going forward now, starting with the second quarter, are we now on a steady kind of apples-to-apples basis now given all the acquisitions that have been integrated and divestitures? Is now 2Q a clean compare for the rest of this year?

2Q will have like a full quarter contribution of TubeBuddy, but it's still year-over-year, right, Q2 of '25, it's -- those results are going to exclude Click and TubeBuddy.

The next question comes from Greg Gibas with Northland Securities.

Justin, you spoke to the broader pipeline of opportunities you're seeing heading into the second half of the year. In terms of maybe annual revenue cadence, is the 40%, 60% split between first half, second half expectations still pretty fair? And maybe tied to that, could you speak to the overall brand campaign spend environment or outlook as we move into your seasonally stronger quarters, perhaps as it relates to demand trends you saw in 2025?

Yes. I can touch on both. I think, Greg, high level, that's the right way to think about things is sort of 40% first half of the year, 60% second half of the year, that's historically been correct, and we would expect it to be similar. In saying that, we would expect Q2 to be materially larger than Q1 and can confidently say that we've already exceeded revenue for Q1 and Q2 with what are we 6 weeks to go. So we're in really good shape. I think again, there might be a misconception that the company has gone backwards here from a big Q4 with profitability into Q1. But as you and anyone following the story in this space know, there is seasonality and not just sort of first half to back half, like Q1 is historically the lowest quarter, and you'll see that by the amount of revenue growth that we've had year-on-year, and we are really making progress. But the pleasing part is a lot of that revenue is sort of locked in.

In terms of activity, I'd say it's picking up really aggressively. Start of the year was a little slow. It is generally, but I think there was a bit of uncertainty and fear out in the brand sort of spend market. We've been seeing that pick up enormously over the last couple of months. RFP inflow, just yes, a lot more activations, a lot more campaigns going on. I'd say a lot more activity than this time last year, probably not just the macro factors, it's also a combination of us growing our team and having more people out there and really growing and expanding our capabilities and services. But yes, I think macro conditions right now are really quite pleasing in this space. But yes, Q2 is shaping up really well. Back half of the year is shaping up well. And yes, we're certainly on track to hit our numbers.

That's great. Nice to hear about those accelerated client wins early in Q2 here, and I appreciate that insight into the kind of trends and seasonality. As kind of changing gears, your M&A outlook for the foreseeable future, is the integration of recent acquisitions and utilizing cash for share repurchases more of a priority right now? Or would you say M&A is still a key focus? Just trying to get a sense of maybe your capital allocation priorities.

I would say the key focus is our core business and getting it to scale, which we're starting to. I think we're getting a lot more efficient and really proving out that profitability thesis. And I think to do that, we need to prove our profitability for the year, which we're extremely confident we will do. In saying that, certainly, as we've mentioned, we will look to continue to repurchase our shares. We're extremely undervalued, and we want to fix that. And certainly, putting our money where our mouth is helps there, but obviously, that first piece of proving out profitability also helps.

As it pertains to M&A, I think we're getting a huge amount of inbound. It is certainly, I would say, a buyers market right now, especially in our space. So a lot of really interesting medium-sized assets from technology to performance marketing to media assets. I'd say, in the sort of $10 million to $40 million range, 10% to 20% EBITDA that don't have access to capital, don't have access to liquidity that could fit in really well within our ecosystem. So we're definitely looking, Greg, always at how do we get better, how do we get to scale. But how do we do so in a way that doesn't dilute shareholders is accretive and makes sense, right, where we can hopefully get multiples in public markets here as markets start to give us a few green light.

So the way we think about those, one, has to be accretive. We're not looking at anything being cash. But two, it needs to be relative value. we're not going to go and give a company what they might expect top line because our equity is undervalued. And we do like to use equity currency in those deals. We've got a strong balance sheet. So obviously, there's some flexibility there. So yes, we'll remain to be opportunistic on the M&A front. I wouldn't say that it's a priority. I think our priority in our operating business is proving out the cash flow thesis it's getting to scale. But we do have a fair bit of inbound on the M&A front.

But I would say, again, really cognizant of dilution, really cognizant of shareholder value. And those deals really do need to be relative value, and we're very clear on the upfront. But I think there's a lot of people who see the value of what we're building, 1 plus 1 equaling 5 and wanting to be a part of this into the future. So certainly remaining opportunistic on that front.

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

Thank you. Yes. I just want to say thanks, everyone, for joining. I think that Q1 is very much in line with where we expected to be. I think Q2 activity is really, really pleasing. And if anything, we're a little ahead of where we thought we might be. So we are very, very much on track. We're making great progress, and we're very excited to sort of catch up and give those updates to all of you. But yes, certainly making great progress and appreciate the support. So thanks, everyone, for dialing in. Cheers.

This brings to a close GameSquare's 2026 First Quarter Financial Results Conference Call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Good afternoon, and thank you for joining us for the GameSquare Holdings 2025 Fourth Quarter Conference Call. On the call today, we have Justin Kenna, GameSquare's CEO; and Mike Munoz, CFO.

[Operator Instructions]

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-K for the quarter ended December 31, 2025, 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, please go ahead.

Thank you, and good afternoon to everyone joining us on today's call. I'm extremely proud of the progress GameSquare delivered in 2025 as the platform we've been building reached an important inflection point during the fourth quarter. Over the past year, we took decisive actions to streamline our business, strengthen our balance sheet and build a more focused, scalable platform, and our efforts reached a clear inflection point in the fourth quarter.

Our fourth quarter results reflect a meaningful step change in profitability, driven by the success of our strategic investments, improved profitability across the business and the contribution from our recently acquired creative marketing platform, Click. As a result, we delivered positive adjusted EBITDA of $1.7 million, marking a key milestone for GameSquare and demonstrating the earnings power and scalability of our operating model. In fact, when considering the contribution from TubeBuddy, our adjusted EBITDA would have been even stronger, underscoring the immediate accretive benefit of the transaction. More broadly, our performance highlights the strength of the integrated ecosystem we've built, combining data and analytics, a scaled creative talent network, integrated agency services and proprietary owned and operated IP.

2025 was all about optimizing our model. As a result, GameSquare strengthened its position as the entry point for the creator economy and expanding our land and expand strategy. While GameSquare's roots are in gaming, what we've really built is creator economy infrastructure. Across our 4 units, we offer what no single competitor can, tools that power creator growth, managed creator networks, full-service campaign execution and one of the most recognized creator-led brands in the world. For any brand looking to reach, understand or activate within the creator economy, GameSquare is where they can enter.

As our platform has evolved, so has our go-to-market strategy. Today, we're operating with a more integrated and intentional approach that reflects the full capabilities of GameSquare's end-to-end ecosystem. At the front end, we are increasingly focused on landing new customer relationships through our technology and agency businesses. These offerings provide measurable performance-driven solutions that align closely with how brands are allocating spend in today's digital and creator economy. They also create a strong entry point into the GameSquare platform, allowing us to demonstrate value quickly and establish long-term partnerships.

From there, our model is designed to expand relationships across our broader ecosystem. By leveraging our creative media and selling capabilities, we are able to deepen engagement and deliver more comprehensive integrated solutions for our clients. This land and expand strategy is a key driver of our current and future growth model. It enables us to build higher quality, more durable customer relationships while improving revenue visibility and increasing lifetime value. As our platform continues to scale, we believe this approach will drive more efficient customer acquisition, stronger cross-selling opportunities and ultimately higher margin growth over time.

With that as context, I'd like to step back and review the actions we took throughout 2025, and more importantly, how those actions have fundamentally repositioned GameSquare for profitable growth and improved operating performance in 2026 and beyond. Throughout 2025, we executed a deliberate strategy to optimize our business model, rationalize our portfolio and build a differentiated end-to-end platform that is both scalable and resilient. Significant actions during the year include divesting our remaining stake in FaZe Media, winding down Frankly Media and acquiring Click. These operational moves have sharpened our focus, improved efficiency and created a more powerful and unified platform that is purpose-built for scale with multiple durable revenue streams working together.

Simultaneously, we fortified our financial foundation through a series of opportunistic capital raises at an average cost of $1.41 per share that raised gross proceeds of approximately $85 million. Through the proceeds of these transactions, we paid off essentially all existing debt, ended the year in a significant net cash position and meaningfully strengthened our capital structure. These moves position GameSquare with the strongest, most flexible balance sheet in our history. It provided us with the financial strength and agility to both invest in growth and navigate dynamic market conditions.

In parallel, we deployed a portion of our capital into high-performing yield-focused digital asset treasury strategy. While on-chain markets have experienced increased volatility more recently, we believe our disciplined yield-focused approach, combined with the strength of our core operating business has created a differentiated and complementary earnings stream for GameSquare. As part of our initial on-chain strategy, we also acquired a portfolio of digital assets, including NFTs, most notably the Cowboy Ape, which was acquired through a strategic all-stock transaction priced at $1.50 per share.

During the first quarter of 2026, we monetized our NFT positions, generating proceeds of approximately $1.5 million in cash and $0.4 million in Ape at the time of the sale as we actively optimize our treasury allocation. These proceeds were used in combination with the yield we received from our treasury strategy to repurchase our stock. Since we initiated the program in October of 2025 and through March 6, 2026, we have repurchased a total of 5.06 million shares for $2.5 million at an average price of $0.49 per share. We view these repurchases as a highly attractive use of capital, particularly given our confidence in the intrinsic value of the business, and they reflect a disciplined and balanced approach to capital allocation.

Overall, we view our treasury management strategy as a dynamic and opportunistic capital allocation lever. As market conditions evolve, we will continue to actively allocate capital, deploying or monetizing assets where we believe we can maximize risk-adjusted returns and drive long-term shareholder value. At the same time, I want to emphasize that our core operating business remains the foundation of GameSquare and our primary focus as we move into 2026. So let's look at our core operating business in a bit more detail.

Our priorities in 2025 were focused on achieving profitability, streamlining operations and driving higher-margin revenue opportunities across our core media, technology and esports businesses. I'm pleased to report that we made significant progress and achieved every one of these strategic priorities and in many cases, exceeded them. During the fourth quarter, we successfully executed against several of our 2025 strategic actions. Reported revenue on a year-over-year basis increased by 142% and gross margin expanded year-over-year by approximately 20 percentage points to 45.9%. The combination of revenue growth, expanding gross margins and disciplined cost control drove a more powerful financial model. Along these lines, we delivered positive adjusted EBITDA of $1.7 million for the fourth quarter, marking a key milestone for GameSquare and demonstrating the earnings power and scalability of our operating model.

The continued improvements to profitability throughout 2025 reflected the second quarter divestiture of FaZe Media, the wind down of Frankly Media in the third quarter of 2025 and the contributions of our improved balance sheet. As we noted in September, we discontinued the operations of Frankly Media, a legacy programmatic advertising solutions provider. The closing of Frankly reflects our strategic shift toward optimizing our business model by exiting noncore, lower-margin operations. This decision also aligns with our goal of eliminating operating losses and cash burn while concentrating on high-growth areas such as agency, media and technology.

M&A remains a key component of our growth plan. During the third quarter, we acquired Click Management, a leading talent management firm founded in Australia with a growing U.S. presence. Regularly named as one of the top digital creator agencies by Business Insider and recently awarded Best Talent Management Agency by industry body, AiMCO, Click creators delivered 548 million views across YouTube alone in March of 2026, and currently has a total of 123 million YouTube subscribers. Click has assembled one of the largest English-speaking gaming rosters with approximately 85 active talent.

It is important to note that talent is at the core of today's creator economy and bringing Click into the GameSquare family accelerates our long-term strategy. Together, GameSquare and Click will expand the company's reach into creator-led brand partnerships and activations, accelerate growth opportunities within GameSquare's media, agency and experiences ecosystem and drive immediate cost and revenue synergies by integrating Click throughout GameSquare's existing platform. We are actively leveraging Click's platform to aggressively expand our talent roster. Over the coming months, we expect to add high-impact creators, materially expanding our North American presence and enhancing our ability to drive higher-value brand partnerships, increase campaign volume and improve monetization across our platform. This momentum reflects the strength of Click's platform and our ability to consistently attract and retain top-tier talent in an increasingly competitive market.

More recently, in February 2026, we announced the acquisition of TubeBuddy from BENlabs in an all-stock transaction. TubeBuddy provides powerful search engine optimization, workflow analytics and productivity tools powered by proprietary AI, which are used by creators and digital publishers to grow, manage and monetize their content. The acquisition adds a scaled creative technology layer to our technology platform, which we believe will accelerate our strategy to build an integrated ecosystem spanning content, community data and performance marketing.

TubeBuddy is a high-performing asset. For 2025, TubeBuddy had revenue of $10.2 million, gross margin of over 88% and an EBITDA margin of over 30%. We are excited by the operational and financial opportunities that TubeBuddy represents. Importantly, the accretive acquisition of TubeBuddy demonstrates the evolution of our M&A strategy. As our scale increases and our capabilities expand, we are focused on pursuing compelling operating assets that we expect to be accretive to earnings. With the addition of TubeBuddy, GameSquare's platform includes an AI-enabled software platform with proven tools embedded into creator workflows, anticipated increase to recurring software and subscription revenue, first-party creator and channel data capabilities, powerful cross-platform brand and performance marketing solutions creates new integration opportunities across GameSquare's media, esports and creator networks.

Our strategy is designed to leverage our existing relationships with some of the world's leading and most forward-looking brands while also building on the momentum we generated through key customer wins in 2025. Across our platform, we partner with some of the world's most recognized brands, including LEGO, Paramount and TurboTax, alongside leading gaming publishers such as Roblox, Epic Games, Capcom and Ubisoft. These engagements highlight our ability to deliver integrated creator-led campaigns at scale. Within our technology and data platform, Stream Hatchet continued to strengthen its position as a trusted partner to brands, publishers and creators. We saw strong customer retention and expansion, including renewals with Riot Games, Activision Blizzard and Electronic Arts, reinforcing the value of our data and analytics capabilities.

We also continue to expand our capabilities with new AI-powered tools, and we were selected as an official data provider for the Esports World Cup. In our agency and brand partnerships business, we executed integrated campaigns for leading global brands and publishers, including Capcom, Roblox, World of Dance, Dairy MAX, Jack in the Box, the Dallas Cowboys, Mastercard and Paramount. Within our talent platform, we recently announced new partnerships with H-E-B, while our own media IP and experiential assets drove growth with a new licensing agreement with SpongeBob SquarePants and the production of the 2025 100 Thieves Block Party.

Finally, we continue to expand our relationships across broader gaming ecosystem, including a new management services agreement with Ubisoft. These wins reflect the expanding value of our integrated platform. We are landing customers through our technology and agency capabilities and expanding those relationships across our broader ecosystem, driving higher-value engagements and more durable revenue streams over time.

Over the past several months, we have made several strategic leadership additions and organizational changes designed to enhance execution, drive revenue growth and improve operational discipline. We recently appointed Doug Rosen as Chief Commercial and Strategy Officer, where he is responsible for leading our global commercial strategy and driving revenue growth across the platform. Doug brings deep experience from leading media and gaming organizations and his focus on building scalable, repeatable revenue streams and integrated go-to-market execution is directly aligned with our strategic priorities.

In addition, we appointed Amaree Tanawong as Chief Operating Officer, further strengthening our operational leadership. Amaree brings nearly 2 decades of experience across strategy, finance and operations, including leadership roles at YouTube and other high-growth media platforms. In her role, she is focused on driving operational scalability, executional discipline and supporting the launch of new revenue initiatives across our integrated ecosystem. We also continue to evolve our organizational structure to better align with our platform strategy. This includes the promotion of Paul Ioakim to Head of Agency, bringing together our agency capabilities under a unified leadership structure to deliver a more cohesive integrated solutions for our clients. These leadership updates reflect a deliberate effort to align our organization with our long-term strategy, enhancing our ability to scale efficiently, drive revenue growth and execute with discipline as we enter 2026.

As you can see, 2025 was a transformative year for GameSquare. We took decisive actions to streamline the business, strengthen our balance sheet and build a more focused, scalable platform. Those efforts are now translating into improved operating performance and a clear step change in profitability. Importantly, we believe we are still in the early stages of realizing the full earnings potential of the platform as we move into 2026.

So with this overview, I'd like to turn the call over to Mike to review our 2025 fourth quarter financial results. Mike?

Thanks, Justin. Our reported results for the fourth quarter reflect the successful strategies underway to drive profitable growth. Comparing our 2025 fourth quarter reported results to the prior year, total revenue was $18.5 million compared to $7.6 million. The 142% year-over-year increase in revenue was primarily due to growth across our agency and owned and operated IP segments, including the full quarter contribution of Click. Reported gross margin for the 2025 fourth quarter was $8.5 million or 45.9% of sales compared to $2.0 million or 25.8% of sales for the same period last year. The 20.1 percentage point improvement in gross margin reflects the ongoing efforts to improve profitability and the margin contribution of our digital asset treasury strategy.

Adjusted EBITDA for the 2025 fourth quarter was $1.7 million profit compared to $3.1 million loss for the same period last year. The $4.8 million improvement reflects the strategies we are pursuing to drive profitable sales. On a pro forma basis, which includes the contribution of TubeBuddy, revenue was $20.6 million and pro forma adjusted EBITDA was $2.3 million or 11.2% of pro forma revenue. We believe pro forma sales and adjusted EBITDA demonstrate the accretive contribution TubeBuddy will have on our financial performance. As of December 31, 2025, we had cash and cash equivalents and digital asset treasury assets, excluding NFTs of $52.0 million. We ended the quarter with $35.7 million of shareholders' equity compared to $12 million at the end of the last year. As you can see, GameSquare has a strong financial position with excellent liquidity to pursue strategic initiatives, invest in our operating platform and return capital to shareholders.

So with this overview, I'll turn the call back over to Justin.

Thanks, Mike. As you can see, the progress we are making has fundamentally reshaped the company. Over the past year, we've expanded margins, streamlined our cost structure, rationalized our platform, fully cleaned up and strengthened our balance sheet and added a highly scalable growth engine through Click and TubeBuddy. The result is a business that is meaningfully stronger, more focused and more scalable than it was even a few quarters ago.

Our balance sheet is healthy. Our strategic priorities are fully funded, and we are entering 2026 with clear operating momentum across every part of the platform. We are winning new programs, expanding relationships with leading brands and publishers, scaling our creator network and continuing to innovate across our operating businesses. We are also positioning the company for our next phase of growth. We are advancing our talent strategy with an expected addition that will bring meaningful creator relationships onto our platform. We plan to extend our agency and platform capabilities to drive growth in the U.S. and internationally, while pursuing opportunities to expand our reach into some of the largest, most high-profile gaming markets. We believe these actions will drive new revenue streams in 2026 and beyond and further establish GameSquare as a scaled leader in the global creator economy.

On a pro forma basis, which reflects our plans for the TubeBuddy business, we are reiterating our previously announced annual guidance for fiscal year 2026. We expect revenue in the range of $85 million to $90 million, gross margins of 35% to 40% and adjusted EBITDA of over $5 million. Our outlook reflects continued strong organic growth and the durability of the improved margin profile we established exiting 2025. With the structural efficiencies we have implemented and the operating discipline now embedded across the organization, we believe we are well positioned to scale profitability as the business grows. We are excited about the opportunities ahead and confident in our ability to deliver sustained value for our shareholders.

So with this overview, Mike and I are happy to take your questions. Operator, please open up the call to questions. Thanks all.

[Operator Instructions] The first question comes from Jack Codera with Maxim Group.

This is Jack Codera calling in for Jack Vander Aarde. It was nice to see the guidance. Given all the acquisitions and divestitures, are you able to give any color as to what you expect for seasonality going forward, maybe like a very rough percentage range for each quarter?

Yes, I can take that one, Mike. I'd say probably less so than quarter-by-quarter, Jack. I think the easiest way to think about it is really that the back half of the year is generally a little stronger for a number of reasons, added brand spend ramps a little. We have more activity in the esports market. You have holiday buying formats and consumer product and so forth. I wouldn't say it's extreme in terms of seasonality, but I think the easiest way to think about it is 40-60 in terms of sort of 40% to the first half of the year, 60% to the back half of the year.

Within that, I would generally say that Q1 is typically our weakest quarter and Q4 is typically our strongest. But there can be some fluctuation within that. But the easiest way to think about seasonality is 40-60 on a H1, H2 basis. I would sort of preface that by saying Q1 is off to a historically strong start. We have been very busy closing out the year-end orders. So we haven't closed the books there yet, but we certainly feel really, really comfortable about Q1 and the activity that we saw within that quarter.

Okay. That's great to hear. And I saw the revenue segmentation for the full year, but I recognize that, that was kind of adjusting for some of these acquisitions and divestitures. Are you able to provide just the revenue segments for the fourth quarter specifically, kind of where the revenues fell into those segments for that quarter -- for the quarter?

I can take that one, Justin, if you want. Yes. So I know the quarterly segment disclosure isn't included in our financials, but of our $18.5 million of revenue, $4.2 million was from our owned and operated IP segment, $12.5 million was from our agency segment, which includes our talent agency, Click. $1.2 million was from our SaaS and managed services segment and then $560,000 was from our digital asset treasury yield.

The next question comes from Greg Gibas with Northland Securities.

I wanted to, I guess, maybe follow up. You mentioned a strong start to Q1 in terms of the performance there. Maybe more broad, what kind of gives you guidance in your 2026 outlook? And could you maybe speak to the growth pipeline of opportunities as it stands today?

Yes. Yes, I'll take that one, Mike. I would say, Greg, we feel really, really comfortable in terms of guidance. We believe that these are really conservative numbers. As mentioned, Q1 is off to an extremely positive start. Some of the areas of sort of growth and I would say, outsized growth into 2026, I think to look for. Certainly, our creative deployment business has had an enormous Q1. It's a really big area of growth for us. And we talked in the earnings call a little bit about being the entry point to the creator economy. And what we've been able to do through our creator platform and our data business is really layer those together and have a huge competitive advantage in helping game publishers and brands execute creator deployment campaigns at real scale.

We saw a huge amount of activity there within Q1 of the year, and that's certainly going to be a large growth area for us in 2026 off of what we did there in 2025. It's been a bit of an area of focus for us, something we're investing into and certainly taking advantage of. So I'd look to that area as certainly being a big contributor into Q1 and the remainder of the year. We had really nice sort of flow on within our esports business. We spoke last year about really professionalizing the esports space. We've moved our FaZe Esports business to our headquarters in Dallas.

And with that, there's some inventory that we've been able to sell against it's been really healthy, and we're seeing one of the very few sort of profitable North American esports businesses. So expect that to be a nice contributor also into Q1. Our agency business continues to go from strength to strength. You can see there in the numbers in Q4. But yes, the most pleasing part of that is just entering 2026 with more locked-in revenue than ever before, right? So certainly, we're still out there looking for new business, but I'd say with our current client mix and recurring revenue base. So Q1, we feel really, really good about, off to a great start to the year.

In terms of sort of guidance, I think some of the areas of outsized growth that aren't necessarily baked into those numbers are sort of opportunities into new markets. MENA is certainly one for us. We've talked about it before. There's been obviously increased investment into the esports space with the Esports World Cup and everything going on over in Riyadh, there's some really interesting opportunities for us there. We spoke about the talent and creative space. We're just scraping the surface in terms of the growth into the U.S. I think the acquisition of Click and the business that they built with Australian talent and now growing that U.S. space has been incredible. We have an incredible foundation and now it's really about pouring gasoline on that.

So these are some of the areas I look for outsized growth for us to really sort of hit and exceed guidance, which we very much believe we will do so. But yes, in terms of Q1, I'd say really healthy mix of revenue, but certainly, I'd look for a big sort of contribution from that creative deployment managed services space that I mentioned.

Great. That's very helpful. I appreciate the color there and good to hear. If I could secondarily ask about kind of capital allocation going forward. And maybe just starting with your stance on M&A, how profiles of future M&A would be relative or similar, I guess, to your acquisitions of Click and TubeBuddy more recently or different in any deliberate way? And maybe as it relates to just capital allocation, maybe, wondering if you're willing to maybe discuss your stance on share buybacks going forward, considering you've been active the last several quarters.

Yes, happy to touch on both. So yes, I think that profile Greg, is certainly similar to assets that we're looking at. I think we touched on it. I think really, our focus would be within the technology, performance marketing, media, gaming space, really in, call it, $10 million to $50 million of revenue, 5% to 20% EBITDA margins. It's really the businesses that we're looking at. I think, again, to reiterate, in the past, we acquired some really valuable assets, but assets that were burning cash. We've moved beyond that. We've now got to profitability, and we want to scale it. So we're only looking at assets that are accretive.

We realized the challenge that exists with really trading where we trade today and obviously, using equity as currencies is challenging. So really, the way that we look at these M&A opportunities is relative value deals. And what I would say is while there's challenges not only for us but many in the micro-cap space in today's markets, within the gaming industry more broadly, we have a great reputation. We get a lot of inbound on M&A for these sort of small to medium-sized stand-alone companies that lack access to capital and liquidity. We're a really nice home. And within that, I think a lot of people see the longer-term vision and understand that we're undervalued today, but hey, 1 plus 1 could equal 5 here, and we believe in the long-term vision.

So long story short, Greg, I'd say that profile of company is certainly what we're looking at. But we are very cognizant of dilution. We are obviously working to increase share price. But within that, we'll continue to be opportunistic within M&A, but certainly from a relative value type deal. Again, if you look at TubeBuddy, that was exactly what that deal was, right? 5 million shares to a company that did $10 million in revenue or 30% EBITDA margin. It's basically unheard of. And that's finding a partner that really believes in the long-term vision. So we continue to be active within M&A, but certainly more opportunistic until share price really starts to move.

And then on share buybacks, I think we've been using the yield we've been generating from our [indiscernible] to buy back shares. We bought back obviously, over 5 million shares. We have space currently from our current sort of approval from the Board to do another $2.5 million worth. We will continue to buy back stock. Whether we get more aggressive on the buyback or not remains to be seen. And that will really come down to how the share price moves off the back of profitability, continued catalysts that we have coming.

What I would say is we are really excited, I'd say, by the progress that we've made and by what lays in front of us. We understand how undervalued we are. We're equally impatient. We share shareholders' frustration. And so we will continue to look to buy back stock. and really depending on how -- obviously, there's macro factors at play as well. But depending on how the stock starts to move based off of the catalysts we have coming here over the next 3 to 6 months, we'll really determine how aggressive we are on that front.

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

Yes. I just want to say thanks, everybody, for joining today and certainly for the continued support. Again, I think it's the elephant in the room, it's certainly our share price. And I just wanted to reiterate that we share the frustration around where the share price sits today. But we really do view this in terms of a longer-term play and building really long-term value for shareholders. What I would say, we've talked about hitting profitability in the back half of '25 for some time. We did a lot of work to get there. I'm really proud of the team and want to really give applause to all of our team. We've got a really dedicated workforce who works extremely hard.

So I just wanted to give a huge shout out to all of our staff. But yes, I feel really, really good about the progress that we've made in terms of doing the things that we say we will do, and we feel really strongly about where we're headed in 2026. So again, I just wanted to thank everybody who joined the call and our shareholders for their continued support. We're not going to leave any stone unturned in terms of continued progress in growth and ensuring that we drive value for shareholders. And we really believe that things are going to start to turn here in 2026.

But thank you, everyone, for joining the call. We're really excited to touch base again and report back on our progress with our Q1 results in very short order here. So I look forward to that, and thanks for joining the call. Cheers.

This brings to a close GameSquare's 2025 Fourth Quarter Financial Results Conference Call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Good day, and welcome to the IAcces Alpha Virtual Best Ideas Winter Investment Conference 2025. The next presenting company is GameSquare Holdings, Inc.

[Operator Instructions]

I'd now like to turn the floor over to today's host, Justin Kenna, CEO of GameSquare Holdings, Inc. Justin, the floor is yours.

Thank you so much, and thank you to everybody joining us today. I will try to be pretty efficient through the deck, give everybody sort of an overview of the company, our model and why it's unique and really, I think, how well positioned we are for growth and scale from here and leave a bit of time for Q&A here at the end.

To really, effectively, GameSquare, the purpose of GameSquare is really around connecting game publishers and brands with these huge and growing audiences being these gaming and esports communities. We really are built for the next generation. Just jump through the forward-looking statements here.

This past quarter for us, we believe marks a major turning point. We doubled down on the creator economy. We brought brands deeper in our ecosystem, and we've built real momentum into our sales pipeline. And we were -- we kind of run through the numbers and how well positioned we are in the back half of the year here and running into 2026 hitting profitability. But together with this and our Digital Asset Treasury strategy, we've been able to really solidify and clean up our balance sheet, and we've become debt-free.

And unlike other DATs, which we'll jump into and explore, we're really focused on yield generation, which we've proven out here over the past 3 months. And we're actually driving real revenue for our core operating business. So we're very unique from this sort of traditional kind of DAT, and we believe that in the long term, this will prove out by generating cash within our Operating business as well as our Digital Asset Treasury.

So just quickly for those of you that may be a little newer to this space, I mean, the video game market has a TAM north of $200 billion. You can see there, $230 billion plus. And what we find really interesting is that around 60% to 65% of that revenue is actually directly through influencers and/or creators. And this is a really big area of focus for us, and you'll sort of see over the back half of the year, as we've really cleaned up our balance sheet and our core strategy that this is a major sort of area that we've really doubled down on.

As we sort of mentioned, GameSquare is really built for the next generation. We're doubling down on the creator economy, which is really the largest part of that TAM and continuing to grow. We're embedding brands deeper, which we'll touch on, and you'll see some of the brands that we're working with in a really material way. We've accelerated our pipeline. We've got -- Q3 was effectively breakeven. Q4 will be profitability for the first time for the company, which we're extremely proud of. And our onchain strategy is live and differentiated, and we'll touch on that.

So what is the GameSquare business model and how does it differs to others in the space?

I really touched on at the start, the whole purpose around connecting game publishers and brands with these huge audiences, you've just seen that TAM. It's really, really large. But what people don't talk about enough is these audiences are really difficult to reach, right? They're very fragmented. They consume media in different ways through multiple platforms. These communities vary and differ even within your sort of endemic gaming audiences, Call of Duty communities are not necessarily Fortnite communities and the list goes on. So these audiences are hard to reach, and what we've built is an end-to-end model that really handholds and helps game publishers and brands reach these digitally-native audiences at scale.

And so you can see here from the GameSquare ecosystem, we have a slide that has a bit more detail on each of these 4 segments. Really, certainly from an end-to-end standpoint and within public markets, we really don't have a competitor from an end-to-end standpoint. But certainly, within these 4 segments, we do have competitors. We really believe that this end-to-end model is working.

GameSquare, just a quick sort of a little bit of history here. It was an IPO on the Canadian Stock Exchange in October of 2020. So really, we're kind of 5 years in here. And I think there's been a lot of cleanup and a lot of work done to really get this ecosystem model to the point where we're really well positioned for growth and scale, and that's really where we sit today. This end-to-end model is really resonating with game publishers. We're working in really material ways with EA, with Epic Games, with Roblox and really large-scale brands, and we'll touch on some of those, but this model is really starting to work.

And that's kicked off by our Data and Analytics Stream Hatchet. Stream Hatchet, I think the easiest way for those that are newer to the space to think about Stream Hatchet is what Nielsen is to broadcast television is really what Stream Hatchet is to the gaming and streaming world. We have 9 of the top 10 global game publishers as clients. We really are the de facto market leader when it comes to data and analytics in the space. We are the official data provider for the Esports World Cup, which is the largest Esports event in the world with $60 million of prize money, over in the Middle East each summer. It's 150 of the top global Esports teams competing over there. This gives us, again, a really big competitive advantage. If you think back to how large that TAM is, but the challenge of -- audiences are fragmented, they're hard to reach. Having that data in-house gives us an enormous competitive advantage, specifically into streams 2, 3 and 4.

We touched on doubling down on the creative economy. In Q3, we closed the acquisition of Click, which is our Talent business. We have sort of 75 to 80 talent that we manage actively. This is a cash flow positive business that we believe it's headquartered in Australia, but really 70% to 80% of revenue is from the U.S. and really with our access to some of the largest talent in the world, this is something that we're really starting to [ pour gasoline on ].

We've signed 5 to 6 new talent in the U.S. since acquiring Click. We have a number in the pipe. And this is a part of the business that we're really growing and scaling. And again, if you think about these different streams, having talent in-house gives us an enormous competitive advantage. It's a great sales pipeline from brands. As we're integrating and activating large campaigns for publishers and brands at scale, being able to integrate our own talent into these campaigns, again, it's just keeping margin in-house, keeping revenue in-house. And again, as a stand-alone, this is a profitable business.

We are in the process of launching a Creator Deployment business under Click. That's something to look-out for in 2026. We believe that this will be a $15 million to $20 million revenue business for us in 2026 and really doubling down again on that creator economy, which we mentioned is just such a huge area of growth in this space.

Our third piece here and the largest and really from a scalability and a margin perspective, a really big contributor in helping us get to profitability and scale profitability from here. And that's our Agency Services business. This is a full-service agency broken into two parts, Zoned and GSX. And really, the purpose of breaking this into two parts is that Zoned is more of your creative and strategy agency. Think about that as really agency of record and a lot of retainer relationships, which is really healthy, really nice business, certainly in public markets.

But really breaking this into the two brands being Zoned and GSX gives us the ability to work with brands across segments, i.e., we are the agency of record at Zoned for Jack in the Box, but having GSX in-house gives us the ability to work with KFC, McDonald's and others. Firstly, on Zoned, our creative and strategy agency, I mentioned sort of Jack in the Box with the agency of record for the Dallas Cowboys. We are the agency of record for Dairy MAX. We work really closely with Converse, Topgolf. We are the extension in many ways of the creative and strategy team at Epic Games, which has become an extremely lucrative client for us, helping integrate a number of brands into Fortnite and into UEFM.

Again, for those of you that aren't aware of sort of Fortnite and what Epic Games have done with that game and platform, it's incredibly impressive in terms of taking the most popular game in the world and transforming it into a platform and giving brands and creators the ability to create their own maps within the game and drive audience and actually monetize by driving audience to their own games. We've been able to take advantage of that within Zoned, our game studio by creating branded maps and launching different programs and product in-game for Samsung, Mastercard, McDonald's, Prime Energy and most recently, really successful in integrating Topgolf into Fortnite as well as a really sort of lucrative and long-standing relationship with Paramount. We were able to help integrate Teenage Mutant Ninja Turtles into Fortnite, and not only are we creating these maps and monetizing, driving audience to these maps, but we're also being paid from a marketing and media perspective. And this, again, is a great example of the GameSquare ecosystem really working, right. And that is not only are we sort of doing the creative strategy work, but we're doing the marketing, media, creator, influencer deployment around that.

We've done such a great job with Paramount that we actually now co-own the IP to SpongeBob SquarePants with Paramount. We produced our first game earlier in the summer, which we're still collecting sort of monthly royalty from, that was a great success. We've got another 5 games in the works over the next 18 months. So that's really exciting for us there.

GSX is really more focused on the live event space. We've got our live event experiential team that also works really closely with Epic Games, and built into our content studio, merchant consumer product business and media offering. So really, this team works as one large team. It's a full-service agency business. This is one of the largest areas of growth for us as we continue to sign and expand with these large retainer relationships as well as bringing in new business where we have that full service offering.

And then sort of fourth and finally is, our owned and operated IP. I think to put it simply, instead of just accessing audience for brand and publishers and monetizing, we also want to create and build our own assets that we can monetize and access our own audience over time. Some really good examples here. We own FaZe Esports, which is one of the largest Esports brands in the world by audience. That gives us a lot of access to audience in the space, the endemic audiences and brands sort of interested in the space. Earlier this year, we announced the largest ever jersey sponsorship with Rollbit, which is a crypto sponsor of ours, which again fits in really well to our DAT, which I'll touch on.

We've closed sponsorship deals with Azuki and Rekt and FaZe Esports is one of the very few profitable Esports organizations. We've just moved them into the headquarters where I sit today in Frisco, Texas, headquartered at the Dallas Cowboys, where our largest sort of shareholder, Jerry Jones, obviously, owns the largest -- the most valuable sporting organization in the world. So bringing FaZe Esports into the headquarters here and really professionalizing the Esports space with boot camps and content, there's a lot of opportunity for us to scale and grow FaZe Esports. We also have SpongeBob that I touched on. We have a piece of IP with the NFL called NFL For The Fans, where we activated the Super Bowl and really help the NFL reach these youth global digitally-native audiences at scale. We also just recently launched our Collegiate Esports platform in conjunction with Barnes & Noble and sort of the list goes on there. So really, this is the GameSquare ecosystem from an end-to-end standpoint.

Again, we certainly have clients that will engage us just for data or just for media or just for campaigns. But really, we're seeing a lot more of these opportunities with the 200-plus brands that we touch and work with and the ability to up-sell and cross-sell and really flex our muscle with this ecosystem really working at scale. You'll be -- other thing here, and you can dive in, in your own time. I want to try to move through this quickly so we can leave time for questions. Some more information around Stream Hatchet, our Data and Technology business that you'll be able to look into Click, our Talent Management business with the recent acquisition, and we'll kind of give you a bit of an overview and a bit more of a deep dive on sort of the numbers there, that you can review. Here, you'll see our Creative Services as a full-service agency business, as I touched on, we have content for the internet generation, in-game activations, IRL live experiences, consumer product, influencer procurement and media places. So again, it's that complete full-service agency that we're really getting to scale. And you'll see some detail there around FaZe Esports.

So jumping into this position for the future. You're now seeing our model, the TAM, the sort of macro environment that we exist within. This, I think, is really key. Number one, we're accelerating our timing to profitability. Our Operating business is growing. We're improving margins, and we're bolstered by the yield generation from our DAT. We've acquired our first profitable business in Click. And what I would say is, we certainly see an opportunity to get to scale here. We'll kind of talk through the numbers here and moving forward, so you get an idea.

We'll continue to be opportunistic within the M&A space. But certainly, I think what has changed in terms of our M&A strategy is we've done a lot of work to get debt free. We've done a lot of work to get to profitability, we're really well positioned for scale, and we're only interested in looking at accretive deals from here on in. Creative Talent Management is a natural fit for us. We touched on really doubling down on the creator economy. So we'll give you a bit of a look at Click and what that means for the business. We've divested some pieces over the year. You'll see improvement in that bottom line number, improvement in margin. We divested our Programmatic Ad business. The reality is we're a next-generation media company, right? We are a media-from-platform, in-game activations and really growing for the next generation of fans. The Programmatic business, while it was nice top line revenue, was single-digit margin and was burning money. We are not interested in burning cash. We think that we have the right model. We're really well positioned for scale from here. And as I mentioned, Q4 is going to be our first profitable quarter, which we're very excited about.

And then sort of finally, within here is our differentiated Digital Asset strategy. Again, we'll touch on this. We have a DAT that we believe is best-in-class. And by that is, number one, we have an exclusive relationship with Dialectic, which is generating higher than market yields for us. We are sort of generating around $400,000 of 100% margin free cash flow every month at the moment, through our ETH yielding system. And since really kind of investing in this space, we've really opened up our core services to the Web3 and crypto space. And if you think about it, it really does make a lot of sense, right? You have a lot of these blockchain game developers, neo-banks looking for first-time depositors, wallets, NFT brands looking for live events and Art Basel, and there's a lot of opportunity. And the reality is a lot of these Web3 crypto-native companies are really looking to access Web2 audiences at scale, and that's where we come in.

So through our Agency Services, our Live Event business, our Media, our Data and Technology, we are now -- we've now opened up a whole new sort of revenue vertical from -- off the back of our DAT.

Jumping in, again, coming up on sort of 10 minutes left, I'll jump through these pretty quickly. And any Q&A I can't get to, I'll reach out to each of those sort of questions personally and make sure they all get answered.

Our new acquisition is Click, again, we've touched on this, makes a whole lot of sense, right? We've worked with influencers and creators within the GameSquare ecosystem since its existence and now to have a full service Talent Management business in-house, again, just gives us a huge competitive advantage, right? We are keeping those dollars in-house. It's a really healthy business that we believe we can really scale in a meaningful way. You can see there, the annualized sort of back half of '25 estimates around $14.5 million of revenue, $14.1 million and a bit of EBITDA. And then you start to look at, again, the scale that we can bring with the influencers we work with in the U.S., the talent and the brands. And so we're really bullish about what that's going to look like in 2026.

So jumping in here, pro forma guidance back half of the year. I mean, what are we sort of trading at right now? We are a market cap of around $52 million today. And I think, again, Q3 was a major turning point for us if you look at from Q2 to Q3 in terms of the complete balance sheet transformation that took place, our ability to pay off all of our debt. You'll see in a moment the improvement we made from a bottom line perspective around EBITDA, it was north of $3 million bottom line improvement and how well -- sort of how really truly undervalued we are. And we believe that with our Q4 numbers, 2026 profitability, our ability to kind of scale from here, there's a great opportunity for investors to get in here where we are trading really at our ETH holdings.

And so if you have a look at our pro forma guidance for the back half of the year. Second half revenue around $37 million, around $3 million of EBITDA. Again, a huge improvement year-on-year and showing really Q-on-Q improvement at the moment. I think a great way to kind of think about '26, we haven't given guidance to market yet, we will, but a great way to kind of think about that sort of '26 number would be annualizing these numbers with sort of around 25% organic growth is really where we expect to be in 2026. So really healthy and starting to get to scale.

This next slide here, I think, is a great one. Just around sort of showing that improvement. So Q3 -- and again, I'll touch on Q4 being the largest quarter for us from a seasonality perspective. And from our modeling for the back half of the year, we are very much on track to hit our numbers. You can see there, gross profit of $6.7 million, really healthy margin. Adjusted EBITDA at $200,000 loss from north of $3 million for the quarter before. So you can really see that sequential improvement and net income from continuing ops at around $6 million. So really proud of those Q3 numbers and how well positioned for growth we are.

I'm not usually a huge fan of sort of logo slides, but I love this one because we work with these brands in really meaningful ways. These are wins in the past 90 days of sort of deals of over $200,000. So again, some pretty recognizable logos on this one with the Dallas Cowboy, Star, Epic Games, Mastercard, Paramount, LEGO, Fortnite, Ubisoft. We're really proud of this slide, and it's going to continue to grow.

Just quickly here, I've touched on this a little bit. Again, our treasury strategy is very different to others DATs in the space. One is this ETH high-yield strategy. The reality is for us, this is a cash management strategy. We're generating higher than market yields. We're generating higher than cash yields. I kind of mentioned before around $400,000 of free cash flow every month. So this is something that is really helping us boost margin and it's generating real cash for our business that we'll be able to buyback shares with, and we're going to continue to, especially down here at these prices and really investing growth in our business from the cash flow that our ETH is spinning off.

The NFTs that we own, we actually interestingly enough, have a couple of offers on those NFTs. We're generating yield off of those as well, and they've really opened up a lot of revenue for us into our Web3 operating plan, having close to $8 million in new revenue deals from Web3 sort of projects. But what I'd say on the NFT piece is, this is not a major part of the strategy. Really, we think about as less than 10% of our overall strategy and certainly something that we'll continue to look at and be opportunistic with. But we do have some offers on those NFTs currently that we are assessing.

And then just having a very quick look. This is the DAT at the end of Q3. So obviously, this has changed a little bit in terms of the numbers. But it gives you a good idea of sort of the amount of ETH that we hold and really just in comparison to market cap, how truly undervalued we are, which, again, you can see here in Slide 18, which is as of October 20, we can get shareholders and those interested sort of a really up-to-date view here. But again, we are effectively trading at ETH. When you think about kind of 2026, close to a $100 million revenue business, it's profitable, it's debt-free. So we think that there's a real opportunity currently for investors to get in at these sort of cheaper prices.

You have a look here, this is our sort of experienced management team and Board. We really do have a blue-chip Board for a company of our size. You'll see there Tom Walker, who's the CFO of the Dallas Cowboys and the Jones Family Trust. He's the Head of our Audit Committee. We have Travis Goff, who's the President of Goff Capital, Jeremi Gorman, who is -- runs commercial and Fanatics and all the ad strategy. She was formerly the Chief Ad Officer at Netflix and the Chief Business Officer at Snapchat. Stu Porter, CEO and Founder of Denham Capital. And you can see their key investors with Jerry Jones, the owner of the Dallas Cowboys and John Goff, CEO of Crescent Real Estate and Founder of Goff Capital. So really experienced management team, but really a blue-chip board for a company of our size. This deck is available for those wanting to see sort of some of the case studies that we work on. There's a number of case studies here at the back where you can start to see that GameSquare ecosystem and model, really working at scale.

I'm going to jump over to the Q&A tab. I know we've only got 4 minutes left, so apologies. But as I said, if you want to type in any questions in there, I can also certainly make sure that I get back to each and every one of you. But thanks, everybody, for the time, and I'll jump over to Q&A quickly now.

Okay. So just having a look through some of these. When will GameSquare purchase more Ethereum?

Look, great question. I think that at the moment, we're not purchasing Ethereum because it actually makes more sense to buyback our stock, given where we trade and how sort of undervalued we are. We have a really healthy holding of ETH, and we have a very clear strategy on price, on the way up as to when we would sort of divest and differentiate strategy there. But at the moment, we're not purchasing more, we're also certainly not selling it. Our cost base is kind of in the low to mid-3s. So we're really comfortable with where all that sits. We're not in a position where we need to sell it. But certainly, right now, it makes more sense for us to use that cash to buyback our stock, which leads into another question, when will we see larger buyback of Game stock?

I think you'll see, Dennis, we've made two different tranches of buybacks so far. We will continue to be buying back the stock. So rest assured there. I'm not comfortable by any extent in terms of where we trade. So we will continue to buyback stock and be aggressive there. We have approval around $5 million from our Board on buybacks. I think in 2026, you'll see that increase, and we'll continue to be aggressive and make sure that we get this back trading where it should be.

Another question, can you quantify expected Q3 and Q4 sequential revenue growth?

Yes. So I did in the presentation, but you can go back and have a look there on the guidance for the back half of the year. And hopefully, that gives people a good idea of 2026 in terms of sort of revenue growth and EBITDA and what we're looking at in terms of where we think we can hit for 2026.

How should investors think about gross margin cadence given the shift towards higher margin mix?

Yes, it's a great question. I think that Q3 was a really high-margin quarter. The reality is there will be some quarters where margin does fluctuate a little bit, and that is due to the different sort of natures of the underlying businesses, right, if you think about those four streams and the revenue mix, its something like FaZe Esports, which is a profitable business. But quarter-to-quarter, it can fluctuate depending on price money and the tournaments and performance, digital sticker revenue and things like that.

But as a rough guide, our margins overall since the divestment of our Programmatic business has gone from margins in the high-teens and to 20% to really now thinking about 40% to 45% margin. So I think a safe kind of number is really around that 40% margin. And I think you'll see margin and revenue really grow in the back half of the year.

We're up for time there. I will make sure that I reach out to each of you that's asked a question. But yes, thank you so much for the time. Really appreciate it, and I'll make sure that I follow up with all of you.

Thank you very much. That concludes GameSquare Holdings, Inc. presentation. You may now disconnect.

Good afternoon, and thank you for joining us for the GameSquare Holdings 2025 Third Quarter Conference Call. On the call today, we have Justin Kenna, GameSquare's CEO; Lou Schwartz, President; and Mike Munoz, CFO.

[Operator Instructions]

Before management discusses the results, I would 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 refer to our 10-Q for the quarter ended September 30, 2025, 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, please go ahead.

Thank you, and good afternoon to everyone joining us on today's call. As we have mentioned on prior calls, 2025 is a defining year for GameSquare as we pursue a strategic transformation that we believe will mark the foundation of our next phase of long-term growth. While much of this progress has taken place behind the scenes, our third quarter financial results demonstrate that GameSquare has never been in a stronger strategic, operational or financial position.

Over the past year, we have executed a deliberate strategy to optimize our business model, rationalize our portfolio and build a differentiated end-to-end platform that is both scalable and resilient. Significant actions during the year include divesting our remaining stake in FaZe Media, winding down Frankly Media and acquiring Click Management. Taken together, these operational moves have sharpened our focus, improved efficiency and created a more powerful and unified platform that is purpose-built for scale with multiple durable revenue streams working together.

Simultaneously, we have fortified our financial foundation. With the launch of our digital asset treasury strategy in July of 2025, we successfully raised approximately $18 million to invest in a yield-focused Ethereum model. This strategic initiative enhanced our balance sheet, unlocked scalable treasury yield and accelerated our Web3 market growth. Our digital asset treasury strategy is a critical milestone that underscores our belief in deploying innovative financial approaches to drive long-term shareholder value.

While our transformation is ongoing, we believe our third quarter results are an important inflection, showcasing the financial opportunity of GameSquare's model. I'm confident we are entering the next chapter of GameSquare's growth supported by a stronger platform, sharper strategy, expanding our TAM and a fortified balance sheet. So with this introduction, I want to review our operating performance, the Click acquisition and our treasury management strategy. Our priorities this year remain focused on achieving profitability, streamlining operations and driving higher-margin revenue opportunities across our core media technology and Esports businesses.

During the third quarter, there were several important actions we took to execute against our 2025 operating plan. First, gross margin for the third quarter expanded sequentially by 20 percentage points to 49.4% and is up even more when compared to the second quarter gross margin of 15.3% when including Frankly. This supports our efforts to improve profitability in the back half of the year, and we reported a pro forma EBITDA loss of approximately $200,000 when including a full quarter of Click compared to a loss of $3.5 million in the second quarter. I'm pleased to report that GameSquare reported $5.9 million in net income from continuing operations in the third quarter of 2025.

Improvements to profitability reflect the second quarter divestiture of FaZe Media, the wind down of Frankly Media in the third quarter of 2025 and the recent launch of our DAT strategy, as we noted in September, we discontinued the operations of Frankly Media, a legacy programmatic advertising solutions provider. The closing of Frankly reflects our strategic shift towards optimizing our business model by exiting noncore, lower-margin operations. This decision also aligns with our goal of eliminating operating losses and cash burn while concentrating on high-growth areas such as agency, media and technology.

In addition to divesting FaZe Media and discontinuing Frankly, we also consolidated Sideqik, a technology-enabled CRM solutions provider to brands and marketers into Stream Hatchet, a business intelligence suite that offers game publishers, brands and IP holders with unparalleled insights to navigate the complexities of the emerging content form. The consolidated business provides a comprehensive offering of technology and managed services to global brands, game publishers and marketers. The consolidation is expected to reduce annual operating expenses of $1.25 million.

During the third quarter, we acquired Click Management, a leading talent management firm founded in Australia with a growing U.S. presence, Regularly named as one of the top digital creator agencies by Business Insider and recently awarded Best Talent Management Agency by industry body AiMCO, Click closed over 545 commercial deals globally in 2024 with an annual revenue of $12.4 million and has assembled one of the largest English-speaking gaming rosters with approximately 75 active talent. For the second half of 2025, GameSquare expects Click to contribute $14.5 million of annualized pro forma revenue and approximately $1.2 million of annualized pro forma EBITDA. In addition, the company expects revenue and cost synergies to materially increase Click's EBITDA contribution for the remainder of 2025 and 2026.

Talent is at the core of today's creator economy and bringing Click into the GameSquare family accelerates our long-term strategy. Together, GameSquare and Click will expand the company's reach into creator-led brand partnerships and activations, accelerate growth opportunities within GameSquare's media agency and experiences ecosystem and drive immediate cost and revenue synergies by integrating Click through our GameSquare's existing platform. Click is quickly contributing to our revenue growth and profitability, and I look forward to providing more updates on Click's success in future calls.

GameSquare has created a differentiated end-to-end platform with an ecosystem of assets that now includes data and analytics through Stream Hatchet, a talent network through Click, agency services through Zoned and GameSquare Experiences and owned and operated IP through FaZe Clan Esports as well as partnerships with Paramount, Barnes & Noble College and the Boys. We believe this differentiated and end-to-end platform enables deep partnerships with top game publishers and global brands. Our reach into gaming and Gen Z audiences is unmatched. And as brands compete for share in a challenging economic environment, we are confident in our ability to grow organically, supported by recent partnerships and a robust sales pipeline.

Highlights during the third quarter include: Stream Hatchet was named the official data and insights partner for the 2025 Esports World Cup, and they signed a new managed services contract with Ubisoft. GameSquare Experiences produced the 2025 100 Thieves Summer Block Party. Zoned launched a Fortnite Got Milk? with Dairy MAX campaign. FaZe Clan Esports expanded its record sponsorship deal with Rollbit and GameSquare was named the Agency of Record for the World and Anime Coin Foundation as well as new partnerships with Rekt Brands and Barnes & Noble College. These wins plus many more demonstrate the growing value of our commercial relationships, audience reach and product offerings. Partnerships with Rollbit, Anime Coin and Rekt Brands also reflect the initial success of our Web3 growth strategy as crypto native partners value our audience access and our creative capabilities.

This quarter also marks the first period where our results reflect the digital asset treasury strategy launched on July 1, 2025. Our goal is straightforward: to build one of the most sophisticated yield-generating Ethereum treasuries of any public company and to do so alongside a high-performing operating platform. Unlike pure crypto plays, our model is designed to compound value while buffering against volatility. We are pursuing a 3-pronged crypto-native growth strategy, which includes: one, an Ethereum-based treasury strategy through Dialectic's onchain yield platform in which we're generating above-market yields month-on-month; two, a financialized art and culture strategy that looks to acquire culturally significant digital assets that we can also generate yield on; and three, -- and finally, a Web3 operating strategy, leveraging GameSquare's creative agency and Esports businesses to help crypto-native organizations grow global audiences while also adding high potential digital assets and yield opportunities to our treasury.

Our DAT strategy is focused on driving above-market yields. And as the program matures, we continue to expect to reach high single-digit figures. The cash flow and appreciation from our yielding strategies are intended to fund additional repurchases, return capital to shareholders through buybacks and reinvest in our operating business, creating a self-reinforcing cycle of growth across both pillars of our company. We have built a dedicated onchain platform supported by best-in-class infrastructure and guided by proven leaders in the crypto and DeFi space. This includes the team at Dialectic, who bring deep expertise in structuring, managing and optimizing institutional-grade onchain portfolios.

Our strategy is also supported by seasoned advisers such as Ryan Zurrer of Dialectic, Robert Leshner of Superstate and Rhydon Lee of Goff Capital, all of whom have been instrumental refining our portfolio construction, risk management and yield generation strategies. This platform allows us to actively manage our ETH holdings in real time, identify high conviction opportunities and move capital efficiently across strategies. Importantly, the systems we put in place are built for scale, enabling us to increase capital deployment as our treasury grows while maintaining robust oversight and compliance controls.

Although still in its early days, our onchain strategy has already begun to generate meaningful results with over $600,000 of yield in the last 2 months of the quarter. At the end of 2025 -- at the end of the 2025 third quarter, we held 15,618 ETH with an original cost basis of $55.5 million, almost all of which was in our onchain yield strategy with Dialectic with an unrealized gain of $9.3 million in the third quarter. We own 8 crypto funds for a total value of $6.9 million, which we expect to start contributing to our yield strategy here in the fourth quarter. And we own $3.8 billion of Altcoins, primarily in Anime and Rekt coin.

Recent efforts to support our digital asset treasury strategy have also helped improve our balance sheet. At September 30, 2025, we had approximately $82 million of cash and digital assets, no debt outstanding and shareholders' equity of $79 million. Our balance sheet has never been stronger. And we also reduced our accounts payable to $18 million at September 30, 2025, compared to $27 million at December 31, 2024. We started allocating the proceeds of our yielding strategies to buying back our stock. On October 3, we announced the repurchase of 833,124 shares at an average price of approximately $0.72. Following this transaction, we have $4.4 million remaining under our current authorization. Given the current stock price, we intend to continue to use funds generated by our treasury strategy to opportunistically repurchase our common stock.

As you can see, GameSquare has never been in a stronger financial position. This strength provides significant flexibility to pursue strategic initiatives, invest in our operating platform and return capital to shareholders.

Before I turn the call over to Mike, I want to review the progress of our Annual Meeting and shareholder vote. Since July -- since the July 2025 stock offerings, many of GameSquare shareholders are new and include retail and foreign holders. This has created a difficult environment to get shareholders to vote. I want to stress to shareholders listening today that your vote is important no matter how many shares you hold. In addition, it is important to note that our challenge is getting shareholders to vote. In fact, shareholders who have voted have currently voted in favor of our proposals by a wide margin. We just need more shareholders to vote in order to reach a quorum.

Our third quarter performance demonstrates that our transformation is real and is gaining momentum. Every structural upgrade, every acquisition, every divestiture is calibrated to create real shareholder value. But the continued success of our long-term strategic plan is contingent on governance that is modern, agile and ready to guide the company. By voting for our director nominees and proposed resolutions, you are endorsing a bold future. You enable a streamlined corporate structure capable of faster decision-making, you validate the leadership team's vision, you ensure we have the flexibility to pursue capital raises, strategic partnerships and growth initiatives without encumbrances.

IFS, an industry-leading independent proxy advisory firm, has recommended that GameSquare shareholders vote for the company for proposal. Insiders and major shareholders, including the Jones and Goff families, members of management and Board, Ryan Zurrer and Robert Leshner have all voted in favor of the company's proposals, demonstrating their continued confidence in the company's strategy and long-term potential. We are entering a new chapter of GameSquare. The Click acquisition accelerates our access to top-tier talent and brand relationships. The corporate simplification and governance modernization paved the way for smarter capital allocation and greater strategic optionality. Our cash and onchain reserves gives us the strength and optionality in uncertain markets. Together, we will build a GameSquare that is nimble, profitable and positioned to dominate at the frontier of gaming, creators, media and onchain innovation.

So with this overview, I'd like to turn the call over to Mike to review our 2025 third quarter financial results. Mike?

Thanks, Justin. Our reported results for the third quarter reflect the wind down of Frankly, approximately 3 weeks of Clicks results and the contribution of our onchain yielding strategy. Comparing our 2025 third quarter reported results to the prior year, total revenue was $11.3 million compared to $9.3 million. The 22% year-over-year increase in revenue was primarily driven due to growth across our technology, agency and owned and operated IP segments. Reported gross margin for the 2025 third quarter was $5.6 million or 49.4% of sales compared to $4.2 million or 45.3% of sales for the same period last year. The 4.1 percentage point improvement in gross margin reflects ongoing efforts to improve profitability and the initial contribution of our DAT strategy.

In addition, reported gross margin was materially higher than the 15.3% we reported for the 2025 second quarter, which included Frankly and demonstrates the powerful adjustments we have made to our financial model. Adjusted EBITDA loss for the 2025 third quarter was $0.6 million compared to a loss of $0.9 million for the same period last year and a total loss of $3.2 million for the 2025 second quarter or $3.5 million for the 2025 second quarter as historically reported, which included Frankly. Higher profitability and gains from our debt produced $5.9 million in net income from continuing operations compared to a net loss of $3.9 million for the same period a year ago.

On a pro forma basis, which includes a full quarter contribution from Click Management, revenue was $15.5 million and pro forma adjusted EBITDA loss was $0.2 million. We believe the pro forma improvements to sales and EBITDA demonstrate the progress we are making, getting to scale and improving profitability. At September 30, 2025, we had cash and cash equivalents and debt assets of $81.5 million. During the third quarter, we used our robust liquidity to eliminate all outstanding debt. We have also reduced accounts payable by $8.9 million or 33% from December 31, 2024, primarily due to elimination of legacy payables associated with prior acquisitions. We ended the quarter with $78.7 million of shareholders' equity compared to $12 million at the beginning of the year, which reflects the success of our July equity offerings.

As you can see, GameSquare has a strong financial position with excellent liquidity to pursue strategic initiatives, invest in our operating platform and return capital to shareholders.

So with this overview, I'll turn the call over back to Justin.

Thanks, Mike. The progress we are making is encouraging. We've improved our margins. We streamlined our cost structure. We rationalized our platform. We reinforced our balance sheet and added a new growth engine in Click. Alongside this, our digital asset treasury strategy gives us strategic capital flexibility and a differentiated return profile. The result is a business that looks fundamentally stronger than it did just 3 months ago and a company that has never been better positioned to scale.

Our balance sheet is healthy and our strategic priorities are fully funded. Operational momentum across media agency technology and onchain innovation continues to strengthen. We are winning new mandates, deepening publisher and brand relationships, scaling creator partnerships and executing a yield strategy that is already contributing to shareholder value.

Turning to our guidance. On a pro forma basis, we continue to expect second half revenue of $36.8 million and adjusted EBITDA of $2.9 million. We are on track. Looking into 2026, we expect to experience over 20% annual organic revenue growth while maintaining strong gross margin. With the foundation we have built and the efficiency now embedded in our operating model, we are targeting high single-digit to low double-digit adjusted annual EBITDA margins as our business scales. We are excited to enter the next phase of our corporate history as we focus on sustainable growth and operating leverage. As you can see, 2025 is shaping up to be a transformational year, and I'm excited by the opportunities we are pursuing to create sustained value for our shareholders.

So with this overview, Lou, Mike and I are happy to take your questions.

Operator, please open the call to questions.

[Operator Instructions]

The first question comes from Greg Gibas with Northland Securities.

Nice to see the share repurchases. Could you, I guess, discuss your stance on how aggressive you expect to be or your proclivity to buy back shares with the stock trading below your debt assets and cash?

Yes. We have approval, Greg, to buy up to $5 million worth of equity. We did our first tranche of $600,000. So it's roughly $4.4 million available and certainly down at these prices. And as you mentioned, where we're trading from an NAV standpoint, we're going to continue buying stock. So we will be aggressively pursuing that share buyback. We believe we're extremely undervalued. And I know that shareholders are frustrated, and we equally share that frustration. We certainly believe with the results in Q3, the cleanup of balance sheet, we're on the precipice here of really hitting profitability here in Q4 in a major way.

And we know how undervalued we are, we going to put our money where our mouth is, and we think it's a great use of yield funds. So I think if you look at it that way, Greg, it was sort of 2 months of yield was around $600,000 of free cash flow, and we've used that to buy back shares. We're now another 1.5 months along with sort of increased yield from that. So we're in a position here to be able to go about sort of buying back shares into tranche 2. But I think about it as those yield proceeds, which is sort of still kind of profit to shareholders, we're going to be using that to buy back stock, and we will continue to do so.

Great. That's helpful, Justin. I think last quarter, you mentioned how tariff uncertainty impacted timing of several large deals with global gaming companies. Wondering if you could maybe characterize the environment, how it's trended into Q3 and whether you're continuing to see any macro-related pressures maybe ease or become a little bit more favorable.

Yes. I think we've seen activity pick up for sure. Certainly, back part of Q3 into Q4, Q4 has been extremely busy for us, which is great. We're expecting our largest quarter as we've indicated and seasonality kind of reflects that within our business. But I do think that the sentiment has been pretty positive. We've seen a lot of uptick from our major sort of brand partner and publisher partner relationships. I would say in terms of some of the comments around tariffs and some of those companies that were headquartered in China, they are ongoing, but they are not deals that have closed. So I wouldn't necessarily say that there's been improvement there.

But certainly, just from an activity standpoint, I mean, our pipeline is stronger than it's ever been. We've got a huge amount of RFP flows. We're signing up clients and expanding relationships. We mentioned Rollbit, Dairy MAX, there's a number of others and certainly more news to come. So I think activity in general in our market is certainly really healthy at present.

Got it. And I guess if you could just maybe provide a little bit more color on the 20% organic revenue growth expectations for next year. Kind of the primary drivers there, if you could discuss those that give you confidence in the 20%?

Yes, for sure. And we will come out with more detailed guidance prior to year-end. We're going through planning currently and finalizing the models for next year. I would say that 20% organic growth. So I think the easiest way is a starting point, Greg, to think about it is if you look at that back half, those back half numbers, so call it, roughly $36 million in revenue. If you annualize that, you're at $75 million, 20% on $75 million starts to give you an idea. I think that's pretty conservative in terms of where we're going to get to. And certainly, we expect from an EBITDA perspective, as mentioned, that our EBITDA margin of that revenue would be high single digit to low double digit. So hope that gives you a bit of an idea.

In terms of where that's going to come from, a couple of areas. So we've been working on sort of streamlining our agency business, so our creative and strategy team at Zoned with our live events team at GSX and those guys work together incredibly well. We're seeing -- I was talking to our staff the other day and something I'm really proud of is the fact that we don't lose clients. So we've got really high retention of clients. We've got more locked-in revenue going into next year than ever before, which is really pleasing. And those contracts are expanding, right, because of -- and that's really the model at work, right, which is the more that we can do with Epic Games and Paramount Jack in the Box, they realize the additional services we have, whether that's data, media, content, et cetera. We're expanding those relationships, which is really pleasing. So we've got that core there.

In terms of sort of outsized growth, I think there's a number of areas we're really excited about. Creative deployment is certainly one. We talked about sort of bringing in Click. The core part of their business is managing talent. We've got sort of 75 to 80 active talent currently. But we're going to be aggressively pursuing creative deployment strategy that we think could be really lucrative, certainly building off some of the positive work that we've done within kind of the publisher managed services space this year. We sort of mentioned we brought over a couple of guys who have brought in some major game publisher creative deployment deals with Capcom and Ubisoft, and that's going to be roughly a $6 million kind of revenue business for us this year.

We are putting in some work there, and we'll come back with more details around it. But we believe that could be a $20 million sort of revenue business for us next year. So yes, certainly, I think our agency business, I would expect outsized growth. I would say the 20% growth there would be extremely conservative. And certainly, our talent management and creative deployment areas, certainly areas we expect growth. Again, I think 20% is conservative, but there are certainly areas on top of that for outsized growth and certainly some interesting opportunities in new markets like MENA and throughout Asia and other opportunities that we think represent significant upside.

The next question comes from Jack Vander Aarde with Maxim Group.

Covered a lot of ground. So where do I start for questions. Looking at the 2H pro forma guidance, just to help get a read-through on this -- on the fourth quarter we're in. Do I interpret this correctly if maybe I just back out the 3Q pro forma numbers from this press release and that bridges to the fourth quarter and some of those is the 2H pro forma guide. Is that as simple as that? Or is there anything else to consider?

Yes. So I think if you look at the numbers, Jack, from Q2 to Q3, as we sort of mentioned, there's cleanup with Frankly, we bought in Click and we've continued to get efficient. I think we've shown real discipline in getting our costs under control while we start to really grow our revenue. So as we put together our model for the back half of year guidance, we're actually slightly ahead of where we wanted to be within Q3. So yes, that is what you do to get to the $36 million. You would take off the kind of $15.5 million to $16 million of pro forma revenue for Q3. And obviously, you get to sort of $21 million-ish of revenue in Q4.

And then if you look at from an EBITDA perspective, and the reality is we had a $3.5 million loss in Q2, right? So there were things that needed to be unwound and continuous improvement. It's very difficult to go from $3.5 million loss to a $3 million profit within 1 quarter, but we made that $3 million jump, right? We were very close to breakeven. From a pro forma perspective, it's a $200,000 loss. So from a $3.5 million loss, that's a $3.3 million improvement. It's not quite that, that is required for the next period, but pretty close to. And we expect a lot of that to come from increased deal size, deal flow in our largest quarter of the year, which Q4 seasonally represents.

Got it. That's helpful. And then I'm not sure if Dialectic and the guys from there are on the line at all, but maybe you can help answer this question. So the Ethereum treasury strategy, that was obviously a huge development change, transformation of the business since you last reported. So it's generating above-market yields. That's great. Now crypto assets are obviously notoriously volatile. Does Dialectic or the whole team there, do you guys have a strategy or a sense of what happens in a flat to down market? I'm just curious to know if there's -- if they have a strategy there that they're deploying just in case to understand because it is a big dollar amount of assets.

Yes, they do. And so do we. So I think that, one, just from an insurance perspective, Dialectic have a great sort of risk management strategy and one of the more buttoned up teams within the market. We are continuing -- I think firstly, what I'd like to say is we're not in the Tom Lee game of just acquiring and stacking Ethereum, right? We're not in an arms race to own the most amount of Ethereum. For us, right now, it's a cash management strategy, right? And we are generating higher than market yields. And through some of the recent volatility, the yields have actually performed really well. So Ryan and his team are incredible and they are generating above-market sort of returns for us.

We are going to be opportunistic. We do have a strategy, and we do have a strategy to divest and we have been doing so. We mentioned buying back shares and cleaning up our balance sheet and using those funds in an intelligent way to grow the business, and we'll continue to do so. I think the positive right now in terms of the current dip is the fact that we don't need to raise capital. We don't need to go and sell Ethereum. We believe longer term that Ethereum is going up in price. But for us, really, it's purely in terms of our Ethereum strategy, what we're holding, it's a cash management strategy. We're generating not only higher than market yields, but a much higher yield than we would be if we were holding it in cash. So we're generating return of the Ethereum.

We do have a strategy around different price points and when we'll continue to derisk and how we're going to use those funds and so forth. I think the positive for us right now is we don't need to liquidate. We can be patient. We don't need to raise money. We're certainly frustrated around our share price. And so we'll absolutely use those yield proceeds to buy back the stock. But yes, we're not in the business of just stacking Ethereum. And I think there's some misconceptions around that, that we're going to raise more money to buy more Ethereum and leverage the company. We don't need to do that, right? We have an operating business that's hitting profitability and it's going to be generating cash here in the near term. We have a yield strategy that's also generating cash. And I think this is a really smart diversified offering that longer term is going to drive real value for shareholders.

Okay. Great. I appreciate the color there. And then maybe just one more, and I'll hop back in the queue. On the positive side as well was the biggest surprise to me was the gross margin result. I did a double take on that actually to make sure it was real. So 49 -- over 49% in the quarter, which is just -- it doesn't even -- it's night and day compared to historical results. Was I guess one of the fill in the blanks for me would be, what does Click -- I got the Click revenue and kind of adjusted EBITDA target from you guys. What is Click's gross margin? Is it going to dilute that? I mean, are we expecting these 40%, 50% gross margins? Or does Click kind of bring things down? Just it's such a difference in a good way, but I just want to understand.

Yes. I can kick off with that, and then Mike can give a bit more color around sort of Click's margins and moving forward. I would say this is sort of a beautiful kind of match in terms of this quarter was the first quarter that, Frankly, was pulled out, and we had a higher than normal margin quarter. I wouldn't expect 50% to continue. But this is -- it's the new norm in terms of our margin with a full handle, right? I would say 40%, Jack, is probably the right way to think about our normalized margin as a business. Obviously, that can fluctuate to your point around the mix of business moving forward.

So for example, I touched on the creative deployment business. That's one that we believe there is a lot of low-hanging fruit and some quick wins for us there, profitable, scalable, but probably slightly lower margin, right? You're in your 20%, 25% type margin there with the creative deployment business. But we do expect sort of outsized growth within our agency business and there's some really healthy margins there. So the mix will fluctuate a little bit with this kind of diversified portfolio, but it was a higher margin quarter than just taking Frankly out. But certainly in the 35% to 45% range moving forward, I would expect if we're performing well, we'll have a full handle on it, and we'll certainly -- if we really have outsized growth in certain areas with lower margins, we'll inform the market.

But we would expect it to be on a normalized basis with Frankly coming out, which was single-digit margin, right? So it was a really low-margin business and was burning cash, and that's why we divested it. So I think about it as 40%.

But yes, Mike, I don't know if you want to add anything in terms of margin moving forward.

Yes, I think you covered most of it. I think Click's margins generally fall around the 35% range. They're pretty similar to some of the other entities in the Agency segment. Obviously, the DAT yield has 100% margin. So more DAT yield will improve our blended margin. But yes, I think the biggest change, obviously, from Q2 is the removal, Frankly, which there's a lot of top line there, but very little margin and it brought down our blended margin substantially.

Okay. Great. And then just one more. I'm not sure if the 10-Q is out. I'm just kind of looking for the segment revenue breakout. Just maybe high level wise, what was the mix kind of like? Was it in terms of agency teams and staffs in advertising? Is that how you're reporting?

Yes, that's how we're reporting. So we'll have -- you'll see an owned and operated IP segment, which is essentially what teams, agency, SaaS and Managed Services and yield, which is our DAT. So you'll see those 4 segments. The 10-Q isn't on file yet. We're filing tomorrow post market close, but those segment tables will be there. Of our reported results, the -- of $11.4 million, $3.7 million was from owned and operated IP, $5.4 million was from agency, $1.7 million from SaaS and Managed Services and $600,000 from yield, $600,000.

This concludes the question-and-answer session and GameSquare's 2025 Third Quarter Financial Results Conference Call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Hello, and welcome to the Annual Meeting of Stockholders of GameSquare Holdings, Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording transfer and use of same.

If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure recording, transfer and use of such personal information from all appropriate persons before your disclosure.

It is now my pleasure to turn today's meeting over to Lou Schwartz. The President and Chairman of the Board of Directors of GameSquare Holdings, Inc. The floor is yours.

Good morning. I'm Lou Schwartz, President and Chairman of the Board of Directors of GameSquare Holdings, Inc. And on behalf of the company, I welcome you to our 2025 Annual Meeting of Shareholders. This meeting is now formally called to order.

I now will ask Justin Kenna, the company's Chief Executive Officer and a member of the Board of Directors to chair the remainder of this meeting.

Thank you, Lou. I've been informed by Michael Munoz, the Chief Financial Officer of the company, that as of immediately prior to the commencement of this annual meeting, a quorum for the annual meeting is not represented in person or by proxy.

Due to the lack of required forum to transact business at this annual meeting and to allow the company additional time to solicit proxies to vote on the proposals contained in our proxy statement in accordance with the company's bylaws, I, as Chairman of this meeting had determined to adjourn this annual meeting.

The annual meeting will be reconvened on November 4, 2025, at 12:00 p.m. Central Time to be held virtually via live webcast, please note that all proxies submitted for today's meeting will remain valid and carry forward to the reconvened meeting. Stockholders who wish to change or revoke their properties prior to the reconvened meeting may do so in accordance with the instructions provided in the proxy materials. The annual meeting is hereby adjourned.

Ladies and gentlemen, this does conclude the meeting. Thank you for your participation, and you may now disconnect.