Now we have Justin Kenna with GameSquare.
Hey, guys. I am the CEO of GameSquare, and I am going to take you guys through our presentation pretty quickly and then make it conversational. If anyone has questions, feel free to jump in. I am sure everyone will read this in their own time. Forward-looking statement. Beautiful. So effectively, in its simplest form, we are connecting brands, creators, and consumers at scale. As probably indicated by the name GameSquare, we were born out of gaming.
But we have really evolved into all things internet culture, and I will talk through our model a little bit so you understand why we are different, what we are building. Bit of a snapshot here, 2026 guidance, $85 million in revenue, $5 million of EBITDA. Pretty important for us. We did an IPO on the Canadian Securities Exchange in October of 2020, uplisted to Nasdaq in 2023. We were dual listed TSXV and Nasdaq. We are solely Nasdaq now.
It was really important for us to get to profitability. We have cleaned up the model. We hit profitability in Q4 of last year. 2026 will be the first year of operating profit for the business. In 2027, as you can see, they are going to be generating real cash. I know that looks like a massive jump from 2026 to 2027. For those that are not aware, we have just closed a transaction. We closed on Monday. I will talk you through that transaction and how that sort of breaks out as well. But if you look at 2026 guidance, 85 and five, halfway through the year, we are slightly ahead of target, which is great.
There is a bit of seasonality in our business. So tracking really well towards the 2026 numbers. 2027, the easiest way to think about it, GameSquare as a standalone. We are at 20% organic growth.
Conservatively, we believe we will hit $100 million in revenue, $10 million in EBITDA, which would have $15 million in revenue and $20 million in EBITDA from FanEngine, our acquisition. Again, I will talk you through that acquisition and what it means. We sit at the intersection of these enormous addressable markets, right? This is a massive TAM. What people probably do not talk about enough in this space is truly how fragmented these audiences are and how difficult they are to reach, right? Which leads into our model. This is our model, and I will talk through why we are a little different. The first three streams is the core of the GameSquare business today. They work as one team, really. We have an enterprise sales group that sits above. They are commissioned on every dollar in for GameSquare. We go to market as GameSquare.
We're not going to market as a sum of the parts. Our first stream is our data and analytics business. Really think, what Nielsen is to broadcast television is what Stream Hatchet is to the gaming and streaming world. We have nine of the top 10 global game publishers buying data from us. I kind of mentioned Nielsen, and it's funny because Nielsen licenses data from us. We're the official data provider for the Esports World Cup and Esports Nations Cup. For those that aren't aware, the Esports World Cup is for $70 million of prize money, seven zero. It's the biggest esports tournament in the world. We are the number one when it comes to data and analytics in the space, which, as you think about how big the audience is, but how fragmented that audience is, that's incredibly important.
It's a huge competitive advantage into streams two and three, which is our creator talent business and our full service agency business. Our creative business has close to 100 talent now under contract. That needs to be updated. Again, born out of gaming, but really evolving into lifestyle, and there's a lot of opportunity within the athlete, and music and entertainment space more broadly. A lot of these athletes and lifestyle creators are really evolving through YouTube and a multitude of different platforms. We're helping them with original content, consumer products, and monetizing. The second piece of our talent business is our creator deployment business. Again, we're working non-exclusively with a lot of talent, helping game publishers and brands roll out creator programs at real scale. What we're seeing is brands that would have historically spent a $2 million budget on two enormous creators.
They're spending a $2 million budget on 2,000 creators. These are smaller audiences, but highly engaged, and once you aggregate, it's a far greater ROI. Again, we're layering in our data, we're going to market, and we're monetizing. Third piece is our full service agency business. Everything you'd expect from an agency. We do compete with traditional agencies. We are the agency of record for the Dallas Cowboys, and you'll see some mention of the Cowboys throughout this. Jerry Jones, the owner, is our largest shareholder, and represented on the board by Tom Walker, who's the CFO of the Cowboys and the Jones Family Trust. We're the agency of record for Jack in the Box, Dairy MAX. We work extensively with Topgolf, Converse. We're on retainer with Roblox, one of the biggest game publishers in the world, and with Epic Games, the creator of Fortnite.
I think what's the most pleasing about this piece is that real growth of retainer relationship, recurring revenue, longer term relationship. Within our agency business, we have a creative and strategy arm, merch and consumer products business, live events business, content studio, and media offering. Again, one team, full service agency that's highly accretive. The fourth and final piece here, you can see in the yellow box, is FanEngine. We'll focus on that. That is the recent acquisition. But to put it simply, the first three, we are a best-in-class service provider. Instead of just helping brands and publishers access audience and getting paid for it, the fourth box is really focusing on how do we build out our own IP, how do we build out more assets to directly monetize fans. For those that are aware of the gaming space, you probably recognize the red logo.
For those that do not, that is FaZe Clan. FaZe is one of the biggest esports organizations in the world by audience. One of very few North American esports orgs that is actually profitable. Again, gives us great access to audience. There we have nine teams that are competing across the world. SpongeBob is another great one. We have done such a great job with Paramount and our integrations into Fortnite. We actually helped integrate Teenage Mutant Ninja Turtles into Fortnite. We did such a great job there that we actually now co-own the IP of SpongeBob with Paramount.
So we have plans there to create around four maps over the next 12 months. FanEngine is the focus of this deal. FanEngine is IP. We are bringing IP in, as I mentioned. We are a best-in-class service provider. We now have access to be able to directly monetize fans and audience.
There is really two main pieces to FanEngine today is the entertainment IP. You can see there with Peaky Blinders and Simon's Cat. Then there is the Media House, which are really built around traditional athletes, helping build out content at scale and monetizing. I will talk you through a couple of examples. On the entertainment IP front, to start, Simon's Cat, I am not sure if anybody in here has actually heard of Simon's Cat. It is a British cartoon cat on YouTube. These guys have actually done an incredible job monetizing this over the prior two periods, yielding $50 million in revenue and $9 million of profit off the back of tokenizing this cartoon cat. These are the pieces that are really interesting from a FanEngine perspective and how they actually monetize IP, right?
It is gamification, content, rewards, merchandise, live events, and brand partnerships of why this deal makes so much sense. They are literally our sources of revenue today. We are working on other people's IP, Roblox, Epic. Now we are bringing IP in-house. We are really excited about The Peaky Blinders project, which will be launching mid-November. We have a number of really exciting catalysts and announcements to come out on that one.
On the other side, on the Media House, for anyone who is a football soccer fan in here, The Two Robbies are the NBC broadcasters for the Premier League in the U.S., Robbie Mustoe and Robbie Earle. Actually, FanEngine, just prior to the transaction, created a live show in New York around the World Cup, did around $2 million in revenue in six weeks, and actually spent around 600K on content production that we will now be able to keep in-house.
Again, really clear ways of being able to monetize IP, which we are doing for others that we are now bringing in-house. Forecast also adds around 15 athletes into our stable. Again, I talked about being born out of gaming but evolving into lifestyle. There is a lot of opportunity for us in the athlete and the lifestyle space and being able to monetize. In terms of balance sheet, just to give you guys an an overview. We raised around $90 million between Q2 and Q3 of last year. Like a number of others, we bought quite a bit of Ethereum, ETH, that we still own on the balance sheet. We have around 10,000 ETH today. We had around 15,500 when we originally did the raise. We paid off all of our long-term debt. So we have no long-term debt. We have around 10,000 ETH, which we are liquidating.
The aim is that by the end of Q1, we will have no ETH left. We are really focused on the growth of our operating business. I am sure many of you have seen a number of DATs. You start getting pegged to the volatility of the ETH price. It was a moment in time for us. Certainly, a cash management strategy that has worked out, but we are liquidating that ETH, cleaning it up into cash, investing in the growth of our operating business. I think as we start to put out the combined numbers to market, we expect that the share price will move. If it does not, we then have some real powder to be able to start buying back our stock at scale.
We would prefer to use our cash on growth opportunities, but obviously, if the stock does not move, we will start to buy back stock.
Yeah, high level, we have just hit profitability from an operating standpoint. 2027, we will be generating real cash into the business. We have close to $30 million in cash and ETH and cash equivalents on balance sheet. We have real runway. We do not need to raise money. Really clean balance sheet, really clean cap table. We had around 13 million shares outstanding prior to the transaction. It was an all-stock deal. We now have around 18 million shares outstanding. It is pretty close to fully diluted. Really immaterial amount of warrants and options that are extremely out of the money.
You said you have 80 million shares now?
18. One eight.
Oh, okay.
Yeah. Again, clean balance sheet, clean cap table, hit profitability. A number of big catalysts to come with this transaction. So we are really bullish about what things can look like in 2027. Again, I think we bat well above our average for a micro-cap stock and certainly our market cap when you look at the investors involved in the board as well. I mentioned Tom Walker before as the CFO of the Jones Family Trust and the Cowboys. He's the head of our audit committee. Travis Goff is the president of Goff Capital, a $12 billion family office based in Texas. Jeremi Gorman's the Chief Revenue Officer of Fanatics. She was the chief business officer at Snap, chief global ad officer at Netflix. Stu Porter, CEO of Denham Capital and founder. Paul Hamilton is closely tied to the Cox family and runs our Call of Duty franchise.
Again, key investors. I'm sure many people recognize Jerry Jones. John Goff, yeah, equally as impressive, not quite as public. I'll pause there for any questions. But yeah, I think overall, company's in good health. Catalysts to look for certainly around the Peaky Blinders launch from the IP perspective that we're really excited about. We have a number of brand integrations there. Again, as mentioned, we're going into 2027 with more locked-in longer-term revenue than ever before. So yeah, we feel really bullish about growth and where things are tracking.
Justin, I just want to make sure that I'm understanding what you're saying. You paid with shares for the most recent acquisition?
Yep.
Again, how many shares? You have 18.5, according to outstanding right now. How many shares have you paid for the acquisition?
Yeah. It was an all-stock deal, 30% stock up front. There are some earn-outs in cash and stock. So around 5.5 million shares. It has gone from roughly 13 to just north of 18 in terms of shares outstanding. Yeah, highly accretive. Again, I think, as you look at that jump in revenue, from what we expect from FanEngine in 2027 is around $50 million in revenue, $20 million in EBITDA. It is a high-margin business. It is not adding a huge amount of fixed cost to our business. It is around $2 million annually, around 15 headcount. The integration is well underway. Pretty low lift from an integration standpoint, to be honest. I sort of mentioned some of those synergies and how we directly plug into the business. In terms of that monetization piece, we do have an MG on Simon's Cat.
I mentioned it did $50 million revenue and $9 million of profit there. There is an MG attached to it, a guaranteed $5 million of additional profit there. Peaky Blinders is a really interesting one. Obviously, a much larger piece of IP. We get access to that audience. So, from a monetization standpoint, we feel really good. On the other side, on the Media House side, there is a number of deals already locked in revenue that we will be driving in Q4. We are in the process of selling a Champions League show for The Two Robbies, a Women's World Cup show as well, that we are really excited about. And we have got a number of really exciting pieces around the athlete division as well. So $50 million and $20 million profit seems like a big jump.
It is not when you break down these levers and pieces of revenue that are already locked in.
To be very frank with you, when I see 5.5 million shares issued, based on where your shares are at, when you started negotiations, what was the share price? You were close to $2.50, $2.59.
It was. It was slightly up. We did a reverse stock split.
Yeah.
Which obviously affected the stock. They were very aware of it. They had been looking at going public for some time. I am sure you are aware in the U.S., very difficult to do so.
Yeah.
They had a couple of deals fall through.
Yeah.
Originally were looking at a shell to obviously take 100% ownership. This is a far more dilutive deal. I think, one, the fact of our core business is effectively what they are outsourcing today. I think they see the synergies as being a big play here, where we have cash and ETH on balance sheet. We are effectively trading at cash currently.
Yeah.
I think they see the upside there. They saw how undervalued we are. They have got a long-term view here. We looked at this as a relative value type deal. Certainly I think it is a great deal for our shareholders.
Okay. You said there is an earn-out?
Yeah. So earn-out is over two years. There is an opportunity for them to obtain another 10%. So effectively, the max they could get to in terms of equity would be 40% in total, 60% to current GameSquare shareholders. It is 30% and 70% up front. Two periods of 5% that they have to reach based off revenue metrics. Then they receive $0.50 of every dollar of profit, up to a cap of $50 million. So they can receive $25 million of cash. After $8 million, the $8 million threshold. So after $8 million, they get $0.50 of every dollar. What is also important to note there is that we will not be paying tax for some time. We have a number of carry forward NOL tax losses from our FaZe transaction. So, it is all incremental and accretive to the business.
Okay. I just want to make sure I am clear on this. They are allowed to acquire they have been paid an extra 10% in shares or the cash or both?
Both.
Both. Okay.
Yeah. Two different metrics.
So-
The-
Okay
The additional 10% on equity is tied to revenue milestones. The cash piece is tied to profit. Incremental cash into the business. Again, $0.50 of every dollar would be quite expensive if you were paying tax on that amount. We will not be for some time. We have got millions of dollars of carry forward losses there as well. Yeah, we feel extremely bullish about the transaction.
How much do you have in tax NOL?
It is about $50 million. It is a little complicated because of the different jurisdictions and how they can apply and when they can apply. But yeah, we will not be paying tax for the next foreseeable earn-out period of time. Awesome. Yes.
A lot of the diversions are pretty scary.
Yeah.
Can you just explain what that?
Yeah. It has been a lot of cleanup, to be honest. Obviously we have done quite a bit of M&A, and divestment. We did a transaction in 2023 with Engine Gaming and brought in Frankly Media, which was a largely programmatic business. The reason we did that transaction was twofold. One is for Stream Hatchet, the data business that you still see as part of our business today. Secondly was to get from the Canadian Securities Exchange to Nasdaq. Which has also been a bit of a blessing and a curse. We divested Frankly, it was doing a lot of top-line revenue, but single-digit margin and burning cash, old school programmatic business. FaZe Clan is another reason. FaZe was a very famous SPAC. It was trading north of $1 billion at one point in time. The fundamentals never supported that.
We acquired it for $14 million, split it into two assets, FaZe Esports, that we own 100% of today. We sold the creator part of the business for a $40 million valuation to the founder of DraftKings, and that cash has certainly funded our business over the last couple of years. Both of those transactions, there was an enormous amount of cleanup. Like a lot of skeletons in the closet, both businesses that were burning a lot of cash, contracts are being renegotiated. That is why I think through doing those deals, there is a lot of value within those assets, but it delayed us getting to profitability. We have a much cleaner model now. As I said, we have now hit profitability. Now it is really about scale. The cleanup has been done.
From an M&A perspective, we are certainly not going to be acquiring anything burning cash, only looking at accretive deals. I think that is one reason for a five-year chart. I would say if you talk to any microcap CEO over the past five years, it has been pretty challenging markets. I think the ETH was a blessing and a curse. It gave us the ability to raise money at a premium at a point in time. But as I am sure you have seen, these entities that had a pretty crazy 3x mNAV now have a 0.6 mNAV, which also does not make sense. Being pegged and tied to the volatility, I think of ETH certainly has been challenging for us and has hurt us. A lot of those entities, it is kind of their last chance saloon.
They raised a bunch of money, bought ETH, do not necessarily have an operating entity like ours, certainly not one that is profitable. That is the plan there, obviously, to liquidate that ETH, remove the distraction, obviously solidify balance sheet. But there are a few other challenges certainly that we have had. It has been a lot of cleanup, but yeah, we are in a really good spot now in terms of trajectory and catalyst moving forward. Awesome. Well, thank you guys for joining. Really appreciate it. My email is justin@gamesquare.com. If anyone has any follow-up questions, please feel free to reach out. Happy to set up a follow-up call, add you to our distribution list if you are interested to see sort of news and progress as things move forward. But yeah, really appreciate it. Thank you.