Mr. Justin Kenna reports

GAMESQUARE HOLDINGS REPORTS THIRD QUARTER 2023 RESULTS

Gamesquare Holdings Inc. has released financial results for the three and nine months ended Sept. 30, 2023.

"Two thousand twenty-three is shaping up to be a transformative year for Gamesquare with the completion of the Engine Gaming acquisition in April and the planned acquisition of [FaZe Holdings Inc.] that was announced in October. Acquisitions are an important component of our strategic growth plan and support our efforts to quickly reach scale and drive profitability, while simultaneously creating a modern, end-to-end platform to connect global brands with gaming and youth audiences. We are also experiencing strong organic growth as record third quarter sales increased 13 per cent from the 2023 second quarter, and our pipeline remains at record levels," said Justin Kenna, chief executive officer of Gamesquare.

"I am pleased with the progress we are making integrating the Engine Gaming acquisition. Since the acquisition closed, we have removed $6.1-million of annualized cash operating expenses, when comparing pro forma combined results from the 2023 first quarter to the 2023 third quarter. In addition, the recently announced definitive agreement to sell Frankly Media [LLC]'s radio assets for $4-million will further strengthen our balance sheet and streamline our business to support our core marketing, gaming, creative, and technology solutions and capabilities.

"We are also benefiting from significant revenue synergies as we offer more services to more customers. A great example is the growth we are experiencing in performance marketing activations as we combine the science of Engine Gaming's technology assets with Gamesquare's creative agencies. Performance marketing initiatives alone are expected to produce $8-million to $10-million in annual revenue in 2024. We are excited to replicate the success of the Engine Gaming acquisition with the recently announced FaZe Clan acquisition. The acquisition of one of the biggest names in gaming serves as a perfect illustration of how we have built a powerful infrastructure with expansive scale that we can use to leverage the full spectrum of resources within the Gamesquare ecosystem," Mr. Kenna continued.

"As we look to the seasonally strong fourth quarter, and into 2024, I am extremely excited by the direction we are headed and the opportunities we have to create significant value for our shareholders. While the economic environment has remained difficult throughout 2023, we believe we are well positioned to navigate any near-term challenges because of the strong platform we have assembled and the value we provide brands," concluded Mr. Kenna.

Definitive agreement to acquire FaZe Clan

On Oct. 20, 2023, Gamesquare and FaZe Clan announced that the two companies have entered into a definitive agreement pursuant to which Gamesquare will acquire FaZe Clan in an arm's-length all-stock transaction. The acquisition brings together two complementary businesses to create one of the world's leading content, media and entertainment companies focused on gaming, e-sports and youth culture. The combined company will be powered by a progressive end-to-end platform of leading media and agency organizations, gaming and e-sports teams, creative services and technology capabilities. Combined, FaZe Clan and Gamesquare generated annual revenue of approximately $138-million and achieved a 26.3-per-cent gross margin in 2022. Management expects to realize over $18-million in run-rate cost savings from the FaZe Clan acquisition, supported by reduced duplicate corporate costs and other cost savings.

Definitive agreement to sell Gamesquare's non-core radio assets

On Nov. 9, 2023, Gamesquare and its Frankly Media subsidiary entered into a definitive agreement with SoCast Inc. for SoCast's acquisition of Frankly's radio business assets. Frankly provides an on-line content management platform and related content services for approximately 700-plus radio stations. In exchange for the Frankly technology platform and customer accounts, SoCast has agreed to pay Frankly $4-million (U.S.), which includes $3-million (U.S.) upon closing of the transaction and up to an additional $1-million (U.S.) based on future revenue derived from the radio assets. The transaction is expected to close by the end of November, 2023.

Three months ended Sept. 30, 2023, compared with Sept. 30, 2022:

• Revenue of $16.0-million, compared with $10.1-million;
• Gross margin of $4.4-million, compared with $3.6-million;
• Net loss of $5.1-million, compared with a net loss of $4.2-million;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $3.6-million, compared with a loss of $3.2-million.

Nine months ended Sept. 30, 2023, compared with Sept. 30, 2022:

• Revenue of $35.2-million, compared with $21.8-million;
• Gross margin of $10.4-million, compared with $8.2-million;
• Net loss of $13.5-million, compared with a net loss of $10.7-million;
• Adjusted EBITDA loss of $10.0-million, compared with a loss of $7.3-million.

Three months ended Sept. 30, 2023, compared with pro forma March 31, 2023 (includes the results of Engine for the three months ended March 31, 2023):

• Revenue of $16.0-million, compared with $13.7-million;
• Gross margin of $4.4-million, compared with $4.2-million;
• Net loss of $5.1-million, compared with a net loss of $12.3-million;
• Adjusted EBITDA loss of $3.6-million, compared with a loss of $5.1-million.

Conference call details

In lieu of a traditional conference call, Gamesquare is bringing Wall Street to Gen Z by hosting its third quarter 2023 earnings call on Twitch. The first-ever public company earnings livestream on Twitch will be hosted by Mr. Kenna, who will be joined by the company's chief innovation officer and global gaming superstar Tyler (Ninja) Blevins. Shareholders, investors, fans and media are encouraged to join on Wednesday, Nov. 15, 2023, at 5 p.m. ET.

Date:  Wednesday, Nov. 15, 2023

Time:  5 p.m. ET

About Gamesquare Holdings Inc.

Gamesquare (Nasdaq: GAME) (TSX Venture Exchange:GAME) is a vertically integrated, digital media, entertainment and technology company that connects global brands with gaming and youth culture audiences. Gamesquare's end-to-end platform includes GCN, a digital media company focused on gaming and e-sports audiences, Cut+Sew (Zoned), a gaming and lifestyle marketing agency, United States, Code Red Esports Ltd., a United Kingdom-based e-sports talent agency, Complexity Gaming, a leading e-sports organization, Fourth Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer product business, Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik, a social influencer marketing platform.

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