Why Is GameSquare Stock Gaining Today?

GameSquare Holdings, Inc. GAME shares are trading higher on Thursday. The company announced preliminary third-quarter financial results and provided a business update.

Preliminary revenue for the third quarter of 2024 is estimated to exceed $26.5 million (consensus $24 million), with an expected adjusted EBITDA loss of approximately $2.4 million, reflecting a $3.0 million improvement from the second quarter of 2024.

The company currently estimates that the third-quarter gross margin was approximately 18%, compared to 14.8% for the second quarter of 2024.

The revenue mix benefited the gross margin for the third quarter, although start-up costs related to new programs and partnerships partially offset this.

These investments are expected to enhance both revenue and profitability in the fourth quarter of 2024.

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Consequently, due to strong performance in the third quarter and year-to-date, GameSquare has raised its 2024 annual pro forma revenue guidance to a range of $105 million to $110 million (consensus $104.46 million), up from the previous estimate of $100 million.

Additional guidance for 2024 includes expected cost savings of over $18 million from the FaZe Clan acquisition for the 12 months ending December 31, 2024, compared to the same period in 2023.

Management also anticipates sequential improvements in profitability throughout 2024, driven by sales growth, better gross margins, and cost-saving initiatives.

GameSquare’s largest investors are Dallas Cowboys owner Jerry Jones and the Goff family.

Price Action: GAME shares are trading higher by 28.1% to $0.8964 at last check Thursday.

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