Earnings release
Page 1
Enthusiast Gaming Reports Q3 2025 Financial Results Adjusted EBITDA from continuing operations of $1.2 million for the nine months ended September 30, 2025, compared to a loss of $0.1 million in the year ago period Completed sale of Direct Sales Media Business and related creative assets in Q3, resulting in a gain on sale of subsidiaries and assets of $5.5 million Gross margin of 86.9% in Q3 2025, up 1,810 bps from Q3 2024 TORONTO, Nov. 13, 2025 -- Enthusiast Gaming Holdings Inc. (“Enthusiast Gaming” or the “Company”) (TSX: EGLX), a digital publisher focused on building tools, platforms, and experiences for gamers, today announced financial results for the three months ended September 30, 2025 (“Q3 2025”). “In three short months we pushed squarely into profitability, increased our cash position significantly, and embraced our true identity as an R&D-driven, product-led business,” said Alex Macdonald, CEO of Enthusiast Gaming. “With the sale of our direct sales business and related creative assets now complete, the Company is fully aligned behind what is and has always been our core engine: our products and the tens of millions of gamers who rely on them. “The strength of our core business is clearer than ever. In Q3 we served over 90 million gamers across our owned properties, up 11% quarter-over-quarter. That isn’t just reach; reach is rented. That is relevance. That is our audience on our platforms. Moreover, this renewed focus is already producing results: we have been cash-flow positive every month since July, including subsequent to quarter end, and our gross margin reached 87% in Q3, demonstrating the underlying scalability of our continuing operations. “Operationally, our product-first strategy is transforming how our platforms perform. September and October were each our strongest programmatic advertising months year-to-date, driven by substantial audience gains and more than 10% growth in time spent in Q3 quarter-over-quarter. When we invest in R&D, we build products that compound into long-term, recurring returns measured over years or decades. We now have a growing pipeline of feature expansions and, for the first time in a while, entirely new products scheduled to launch over the next twelve months to meet major title releases, while making use of proprietary technologies and processes that give us a competitive edge. This positions us to be first to market with best-in- class tools for the largest gaming waves of tomorrow. “We are not focused on building quarters; we are focused on building a business for 2026 and beyond. Platforms like U.GG, Icy Veins, and TheSimsResource have already proven that we can publish and operate best-in-class products wherever we choose to compete, and the task ahead is straightforward: expand our feature offering and broaden our product relevance across more titles and genres, ultimately toward title-agnostic platforms. We are moving with purpose and direction as a product company defined by relevance rather than reach. Our momentum is carrying through into Q4, where seasonal tailwinds in advertising and in our events business are expected to drive a meaningful increase in profitability. The path we are on is strong, clear, and leading us toward an increasingly promising future.” Financial Highlights for Q3 2025 (All figures are from continuing operations, unless otherwise stated) • Revenue of $7.3 million, compared to $10.8 million in Q3 2024, with the majority of the decline being attributable to a reduction in the number of low-margin third-party network websites represented by the Company for web programmatic inventory as a result of the Company’s decision to focus on monetizing its owned and operated websites. • Gross profit of $6.4 million, compared to $7.4 million in Q3 2024, similarly driven by third-party network partners leaving the network, with gross margin expanding to 86.9% from 68.8% in the year ago period. • Operating expenses of $6.6 million, a $1.2 million year-over-year decrease from $7.8 million in Q3 2024 as a result of initiatives taken to establish an efficient and scalable operating model. • Adjusted EBITDA of $0.3 million, compared to $0.5 in Q3 2024, which was consistent year-over-year when adjusting for foreign exchange loss (gain). Adjusted EBITDA loss from discontinued operations of $0.3 million, compared to $0.4 in Q3 2024. • Net income of $7.0 million, compared to $6.7 million in Q3 2024, primarily due to (i) the gain from the write off of discontinued operations which resulted in a $11.5 million net gain change from discontinued operations, and (ii) decreased transaction costs of $1.5 million. Business Highlights for Q3 2025 • On July 10, 2025, the Company announced the initiation of a strategic review process to explore opportunities to further strengthen its balance sheet and unlock shareholder value. • On July 25, 2025, the Company closed on $2.0 million of funding by way of a non-revolving term loan with Beedie Capital and entered into forbearance agreements with each of its secured lenders.
Page 2
• On August 30, 2025, the Company closed the sale of its direct sales business line, including Omnia Media Inc. and GameCo Esports Canada Inc., for cash consideration of $0.9 million, as well as the assumption of all existing and ongoing liabilities of the direct sales business line and acquired entities as of closing. The sale resulted in a gain on sale of subsidiaries and assets of $5.5 million, which is included in discontinued operations. • Product Updates: ◦ U.GG increased advertising revenues by 25.1% in Q3 2025 compared to Q2 2025. This growth was driven primarily by a 10.9% improvement in average session duration quarter-over-quarter reflecting enhanced user engagement on the platform, seasonal uplifts in CPMs, and additional ad tech optimizations deployed within the quarter. The platform also saw the launch of U.GG’s ‘mono-app’, combining its League of Legends and Valorant applications under a single desktop application while allowing for the integration of new titles on a modular basis. These advancements are expected to significantly increase the speed with which U.GG can deploy applications for new titles. ◦ Icy Veins saw considerable growth in Q3 2025, increasing users by 31.8% and total time with gamers by 27.9% relative to Q2 2025, all while expanding its operating margin and making significant progress in its modernization initiatives planned for Q1 2026 ahead of the major expansions announced for its flagship titles, World of Warcraft and Diablo IV. Q3 2025 also marked a period of growth for Icy Veins’ nascent news offering, the success of which has warranted increased investment in the development of a net-new product for the Company, planned for release in H1 2026. ◦ TheSimsResource continued to evolve its first-to-market LookBuilder tool, which launched in June, providing users with a browser-based, 3D-rendered, real-time outfit preview engine that enables players to build and customize complete outfits and see them visualized on a character instantly. Feature enhancements completed in Q3 include the addition of poses, multi-file download to allow for one-click outfit saving, improved rendering to better replicate how custom content appears in-game, and the launch of the My Current Look tab, with improved display and navigation controls. LookBuilder is available for both free and paid users and is intended to drive deeper engagement across the platform. ◦ Addicting Games launched significant updates to its iconic casual gaming platform in Q3, providing users with a more modern design, streamlined navigation, and optimized performance. Further enhancements are underway to improve the mobile experience and capitalize on clear synergies with the Company’s PocketGamer brand, which represents one of the world’s leading mobile gaming destinations on the web and the pre-eminent B2B mobile gaming conference and event series. • Event Updates: PocketGamer Connects (“PGC”) continued to execute on its previously announced global expansion plans, hosting Pocket Gamer Connects Summit Shanghai 2025 in July, an event which attracted over 630 senior industry professionals. Subsequent to the quarter, PGC hosted its 12th annual Pocket Gamer Connects Helsinki in October, an event which attracted over 1,350 senior games industry professionals, Pocket Gamer Connects Summit Korea, attended by over 500 senior games industry professionals, and Pocket Gamer Connects Aqaba, attended by over 1,200 senior games industry professionals. Third Quarter 2025 Results Comparison Revenue was $7.3 million in Q3 2025, a 32% decrease compared to $10.8 million in Q3 2024. Media and Content revenue was $4.3 million in Q3 2025, a 44% decrease from $7.7 million in Q3 2024, primarily due to a number of represented third-party publishers leaving the web network as the Company continues to focus on its owned and operated websites. Events revenue was $0.3 million in Q3 2025 compared to $0.2 million in Q3 2024. Subscription revenue was $2.7 million in Q3 2025 compared to $2.8 million in Q3 2024. Gross profit was $6.4 million in Q3 2025, a 14% decrease compared to $7.4 million in Q3 2024. Gross margin increased to 86.9% in Q3 2025 from 68.8% in Q3 2024. Adjusted EBITDA from continued operations was $0.3 million, compared to an Adjusted EBITDA from continued operations of $0.5 in Q3 2024, which was consistent year-over-year when adjusting for foreign exchange loss (gain). Adjusted EBITDA loss from discontinued operations was $0.3 million, compared to an Adjusted EBITDA loss from discontinued operations loss of $0.4 in Q3 2024. Net income was $7.0 million, or $0.04 per share, in Q3 2025, compared to net loss of $6.7 million, or $(0.04) per share, in Q3 2024. Strategic Updates The Company will not be hosting a conference call for its Q3 2025 results. Enthusiast Gaming has established its strategy to operate as a product-first business and is aligning all operations and resources around its core product portfolio. The Company has completed the divestment of its direct sales business line and related creative assets, and continues to undertake its strategic review to strengthen the Company’s balance sheet. Management will continue to update shareholders on these activities through appropriate channels as milestones are reached, and anticipates providing a fulsome presentation of the Company’s product-focused operations once the transition is completed. Supplemental Information Enthusiast Gaming’s financial statements and management discussion and analysis (“MD&A”) are available at www.sedarplus.ca and enthusiastgaming.com/financials. All amounts are in Canadian dollars. About Enthusiast Gaming Enthusiast Gaming builds tools, platforms, and experiences that gamers use every day. Its portfolio of owned and operated digital properties includes some of the most recognizable names in gaming, such as U.GG, Icy Veins, TheSimsResource,
Page 3
PocketGamer, Addicting Games, and Fantasy Football Scout, as well as the global B2B event series PocketGamer Connects. Through these assets, Enthusiast Gaming generates revenue from programmatic advertising, subscriptions, and events, and is focused on expanding its owned IP and deepening direct engagement with its audience. Contacts Enthusiast Gaming: Alex Macdonald, Chief Executive Officer Investors: investor@enthusiastgaming.com Media: press@enthusiastgaming.com Forward-Looking Statements This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Enthusiast Gaming anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking statements in this news release include, but are not limited to, statements regarding trends in certain financial and operating metrics of the Company, the launch and timing of new products, and expectations relating to the financial performance and the financial results of future periods. Forward-looking statements are based on assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, including, but not limited to, expectations and assumptions concerning: interest and foreign exchange rates; capital efficiencies, cost saving and synergies; growth and growth rates; the success in the esports and gaming media industry; the Company’s growth plan, and judgment applied in the application of the Company’s accounting policies and in the preparation of financial statements in accordance with applicable financial reporting standards. While Enthusiast Gaming considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; and future legislative, tax and regulatory developments. Readers are cautioned that the foregoing list is not exhaustive. For more information on the risks, uncertainties and assumptions that could cause anticipated opportunities and actual results to differ materially, please refer to the public filings of Enthusiast Gaming which are available on SEDAR+ at www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. Enthusiast Gaming disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Non-GAAP Measures This press release references certain non-GAAP measures, including Adjusted EBITDA, as described below. These non- GAAP measures are not recognized measures under GAAP and do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those GAAP measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company uses non-GAAP measures including: “EBITDA”, defined as earnings before interest, taxes, depreciation and amortization. Enthusiast Gaming calculates EBITDA using gross margin less total operating expenses plus share-based compensation and amortization and depreciation; and, “Adjusted EBITDA”, which is defined as EBITDA adjusted for severance, annual directors and officers liability insurance associated with the Company’s former listing on Nasdaq and other non-recurring company costs, such as litigation costs. Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the exchange) accepts responsibility for the adequacy or accuracy of this release. Enthusiast Gaming Holdings Inc. Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss) For the three and nine months ended September 30, 2025 and 2024 (Unaudited - Expressed in Canadian Dollars) For the three months ended For the nine months ended
Page 4
September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Revenue $ 7,310,748 $ 10,755,422 $ 23,980,453 $ 32,104,155 Cost of sales 960,931 3,353,601 3,992,965 9,900,631 Gross margin 6,349,817 7,401,821 19,987,488 22,203,524 Operating expenses Professional fees 412,876 255,423 1,037,608 1,073,698 Consulting fees 21,869 244,540 360,988 1,795,304 Advertising and promotion 151,645 61,122 475,933 331,148 Office and general 638,910 859,950 2,030,406 2,250,470 Salaries and wages 2,953,803 3,781,961 9,963,735 12,180,445 Technology support, web development and content 2,088,869 2,126,867 6,005,887 6,392,020 Foreign exchange loss (gain) 6,243 (179,408) (106,958) (134,342) Share-based compensation 35,789 80,084 132,789 (1,540,396) Amortization and depreciation 252,761 538,871 1,296,007 1,713,899 Total operating expenses 6,562,765 7,769,410 21,196,395 24,062,246 Other expenses (income) Transaction costs 389,439 1,908,963 389,439 1,908,963 Share of net loss from investment in joint ventures - 278 - 11,023 Interest and accretion 82,884 563,720 2,726,557 1,725,443 Loss (gain) on revaluation of deferred payment liability - 39,882 (238,756) (23,486) Gain on sale of assets - - - (344,852) Loss on disposal of property and equipment - - - 25,997 Loss on revaluation of long-term debt 1,886,738 3,385,798 2,786,554 3,385,798 Loss on modification of long-term debt 150,759 4,893 150,759 401,951 Loss on derecognition of long-term debt 1,537,923 - 1,537,923 - Interest income (108) (257) (5,640) (1,710) Net loss before income taxes from continuing operations (4,260,583) (6,270,866) (8,555,743) (8,947,849) Income taxes Current tax expense - 55,392 1,417 182,529 Deferred tax recovery (267,384) (181,647) (97,465) (208,820) Net loss for the period from continuing operations (3,993,199) (6,144,611) (8,459,695) (8,921,558) Net gain (loss) from discontinued operations 10,998,896 (551,151) (29,709,064) (3,489,229) Net income (loss) for the period 7,005,697 (6,695,762) (38,168,759) (12,410,787) Other comprehensive (loss) income Items that may be reclassified to profit or loss Foreign currency translation adjustment (5,702,706) (639,611) (6,497,420) 826,090 Net income (loss) and comprehensive income (loss) for the period $ 1,302,991 $ (7,335,373) $ (44,666,179) $ (11,584,697) Net loss per share from continuing operations, basic and diluted $ (0.03) $ (0.04) $ (0.05) $ (0.06) Net earnings (loss) per share from discontinued operations, basic and diluted $ 0.07 $ - $ (0.19) $ (0.02) Net earnings (loss) per share, basic and diluted $ 0.04 $ (0.04) $ (0.24) $ (0.08) Weighted average number of common shares outstanding, basic and diluted 159,169,003 155,759,149 159,169,003 155,719,820 Enthusiast Gaming Holdings Inc. Condensed Consolidated Interim Statements of Financial Position As of September 30, 2025 and December 31, 2024
Page 5
(Unaudited - Expressed in Canadian Dollars) September 30, 2025 December 31, 2024 ASSETS Current Cash $ 2,143,334 $ 4,765,373 Trade and other receivables 7,354,798 12,351,539 Income tax receivable - 12,371 Prepaid expenses 643,132 2,010,796 Total current assets 10,141,264 19,140,079 Non-current Property and equipment 11,752 187,464 Right-of-use assets 35,871 800,908 Long-term portion of prepaid expenses - 148,546 Intangible assets 24,924,632 71,815,485 Goodwill 36,379,225 36,353,244 Total assets $ 71,492,744 $ 128,445,726 LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities $ 10,622,698 $ 15,022,630 Contract liabilities 5,978,149 5,735,275 Income tax payable 53,254 131,441 Current portion of long-term debt 42,356,876 38,990,332 Current portion of deferred payment liability 2,406,425 2,322,274 Current portion of lease liabilities 121,608 727,525 Total current liabilities 61,539,010 62,929,477 Non-current Long-term portion of lease liabilities - 295,977 Deferred tax liability 1,999,694 13,470,905 Total liabilities $ 63,538,704 $ 76,696,359 Shareholders' Equity Share capital 461,607,373 461,607,373 Warrants reserve 2,561,231 1,823,168 Contributed surplus 17,728,984 17,596,195 Accumulated other comprehensive income 5,044,778 11,542,198 Deficit (478,988,326) (440,819,567) Total shareholders' equity 7,954,040 51,749,367 Total liabilities and shareholders' equity $ 71,492,744 $ 128,445,726 Enthusiast Gaming Holdings Inc. Condensed Consolidated Interim Statements of Cash Flows For the nine months ended September 30, 2025 and 2024 (Unaudited - Expressed in Canadian Dollars) September 30, 2025 September 30, 2024 Cash flows from operating activities Net loss for the period from continuing operations $ (8,459,695) $ (8,921,558) Items not affecting cash: Amortization and depreciation 1,296,007 1,713,899
Page 6
Share-based compensation 132,789 (1,540,396) Accretion (50,437) (109,208) Deferred tax recovery (97,465) (208,820) Share of net income from investment in joint ventures - 11,023 Gain on sale of assets - (344,852) Gain on revaluation of deferred payment liability (238,756) (23,486) Foreign exchange gain (40,165) (519,319) Loss on disposal of property and equipment - 25,997 Gain on settlement of accounts payable (91,584) (622,413) Loss on modification of long-term debt 150,759 401,951 Loss on derecognition of long-term debt 1,537,923 - Loss on revaluation of long-term debt 2,786,554 3,385,798 Transaction costs 389,439 1,908,963 Provisions 20,012 (38,100) Changes in working capital: Changes in trade and other receivables 943,597 3,072,068 Changes in prepaid expenses 215,954 347,300 Changes in accounts payable and accrued liabilities (348,978) (5,959,874) Changes in contract liabilities 252,617 271,964 Changes in income tax receivable and payable 24,725 207,083 Income tax paid (86,649) (482,434) Net cash used in operating activities from continuing operations (1,663,353) (7,424,414) Net cash used in operating activities from discontinued operations (1,439,792) (11,167,995) Net cash used in operating activities (3,103,145) (18,592,409) Cash flows from investing activities Proceeds from sale of assets, net of transaction costs - 2,693,339 Repayment of deferred payment liability - (85,700) Acquisition of property and equipment (840) (5,303) Net cash (used in) from investing activities from continuing operations (840) 2,602,336 Net cash from investing activities from discontinued operations 941,948 1,239,874 Net cash from investing activities 941,108 3,842,210 Cash flows from financing activities Proceeds from long-term debt, net of transaction costs 2,065,401 20,143,122 Repayment of long-term debt (2,255,097) (4,716,851) Repayment of other long-term debt - (173,858) Lease payments (39,977) (229,331) Net cash (used in) from financing activities from continuing operations (229,673) 15,023,082 Net cash used in financing activities from discontinued operations (183,867) (393,417) Net cash from financing activities (413,540) 14,629,665 Foreign exchange effect on cash from continuing operations (39,573) 111,619 Foreign exchange effect on cash from discontinued operations (6,889) 36,070 Foreign exchange effect on cash (46,462) 147,689 Net change in cash (2,622,039) 27,155 Cash, beginning of period 4,765,373 6,851,966 Cash, end of period 2,143,334 6,879,121 Cash held by discontinued operations - 180,903 Cash held by continuing operations $ 2,143,334 $ 6,698,218 Enthusiast Gaming Holdings Inc. EBITDA and Adjusted EBITDA - from continuing operations For the three and nine months ended September 30, 2025 and 2024 (Unaudited - Expressed in Canadian Dollars) For the three months ended For the nine months ended
Page 7
September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Gross margin $ 6,349,817 $ 7,401,821 $ 19,987,488 $ 22,203,524 Operating expenses (6,562,765) (7,769,410) (21,196,395) (24,062,246) Share-based compensation 35,789 80,084 132,789 (1,540,396) Amortization and depreciation 252,761 538,871 1,296,007 1,713,899 EBITDA from continuing operations 75,602 251,366 219,889 (1,685,219) EBITDA from discontinued operations (358,110) (399,699) (6,814,569) (1,965,186) EBITDA (282,508) (148,333) (6,594,680) (3,650,405) Severance 41,626 18,527 379,417 489,878 D&O insurance specific to the Company's former Nasdaq listing 79,841 201,478 392,705 821,448 Other non-recurring items 101,942 51,488 250,094 231,591 Adjusted EBITDA from continuing operations299,011 522,859 1,242,105 (142,302) Adjusted EBITDA from discontinued operations (304,289) (377,298) (6,283,038) (1,708,508) Adjusted EBITDA $ (5,278) $ 145,561 $ (5,040,933) $ (1,850,810)