Zoned partners with Clout in esports engagement deal

FRISCO, TX - GameSquare Holdings, Inc. (NASDAQ:GAME) subsidiary Zoned has announced a partnership with esports platform Clout, highlighting a six-figure retainer deal with potential for future expansion. The collaboration coincides with the launch of Clout's enhanced platform and marketplace, aimed at increasing engagement within the esports community.

Clout's platform allows esports enthusiasts to participate in free-to-play contests, earn experience points (XP (NASDAQ:XP)), and claim exclusive rewards. The partnership with Zoned is designed to introduce new gamified experiences and extend Clout's reach to a broader audience.

Jack Porter, Co-Founder of Clout, stated that the partnership would enable Clout to offer more value to its users and expand its feature set. Carlos Tovar, President of Zoned, emphasized the alignment of this collaboration with Zoned's mission to create interactive experiences that foster engagement and brand loyalty.

Zoned, a marketing agency focused on connecting gaming with pop culture, is known for delivering marketing solutions that resonate with younger audiences. Clout's platform engages users with interactive contests, real-time tracking, and a marketplace for redeeming prizes, which are expected to be amplified through this partnership.

GameSquare, the parent company of Zoned, is recognized for its media and entertainment capabilities, particularly through its association with FaZe Clan, a leading gaming organization. This partnership with Clout is part of GameSquare's broader strategy to innovate how brands connect with Gen Z and Millennial audiences.

This news release contains forward-looking statements regarding potential future performance and growth, which are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. The information is based on a press release statement and aims to provide a factual report on the partnership between Zoned and Clout.

In other recent news, GameSquare Holdings, Inc. announced a significant expansion of its sponsorship deal with Rollbit, a renowned online gaming company. The extended agreement, which is a multi-million dollar deal, is set to focus on FaZe Clan's Counter-Strike team outside the United States. GameSquare reported a 24% increase in pro forma revenue in Q2 of 2024, reaching $28.6 million, and a substantial improvement in profitability with a pro forma adjusted EBITDA loss of $5.4 million, a considerable decrease from a $10 million loss in the same period last year.

Roth/MKM reiterated its Buy rating for GameSquare, reflecting confidence in the company's recent achievements and future prospects. The company also announced new brand partnerships worth $3 million with Topgolf, 5-hour ENERGY, and Dairy MAX. GameSquare anticipates these recent developments will contribute to an annual revenue exceeding $100 million with a gross margin between 22.5% and 27.5%.

In addition, GameSquare has successfully raised $36 million through non-dilutive capital, intended to support the company’s organic growth. However, it's important to note that the gross margin declined due to a less profitable mix of sales. The company expects the benefits of current investments to materialize in the second half of 2024 and is optimistic about the growth of the events business.

InvestingPro Insights

GameSquare Holdings' recent partnership with Clout through its subsidiary Zoned comes at a critical time for the company. According to InvestingPro data, GameSquare has experienced significant revenue growth, with a 175.59% increase in the last twelve months as of Q2 2024. This growth aligns with the company's strategy to expand its reach and innovate in the gaming and esports space.

Despite the impressive revenue growth, InvestingPro Tips reveal that GameSquare is "quickly burning through cash" and "suffers from weak gross profit margins." The company's gross profit margin stands at 20.21% for the last twelve months, which may explain the need for strategic partnerships to improve profitability.

The stock's recent performance has been challenging, with InvestingPro data showing a 27.73% decline in the past month and a 67.15% drop over the last year. An InvestingPro Tip notes that the stock is "trading near 52-week low," which could present an opportunity for investors who believe in the company's long-term strategy and the potential of partnerships like the one with Clout.

For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for GameSquare Holdings, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.