Super League Enterprise Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 14, 2025

Key Takeaways

  • Negative Sentiment: Super League's Q2 revenue, while up 10% sequentially, declined 27% year-over-year amid tariff uncertainty and structural shifts in the Roblox ad ecosystem.
  • Positive Sentiment: Gross margin expanded to 44%, up from 40% a year ago, and pro forma operating expenses were reduced by 23% year-over-year, reflecting streamlined operations.
  • Positive Sentiment: Mobile gaming revenue grew to approximately 15% of total Q2 sales after an exclusive partnership with Ad Arcade, and new initiatives like Roadtrends Pro and a Meta/TikTok collaboration are set to diversify future revenue streams.
  • Positive Sentiment: East Coast sales surged 150% year-to-date, driven by new regional leadership in New York and Chicago, unlocking high-potential advertising markets and accelerating seller performance.
  • Positive Sentiment: Balance sheet improvements include $6.6 million in new capital, a 90% reduction in 2025 debt service, and a $20 million equity line, positioning the company to achieve adjusted EBITDA positive results in Q4.
AI Generated. May Contain Errors.
Earnings Conference Call
Super League Enterprise Q2 2025
00:00 / 00:00

Transcript Sections

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Operator

Welcome National League Second Quarter twenty twenty five Conference Call. Please note this conference is being recorded. Before we begin, I'd like to caution listeners that comments made by management during this call may include forward looking statements within the meaning of the applicable securities laws. These statements involve material risks and uncertainties and actual results could differ from those projected in any forward looking statements due to numerous factors. For a description of these risks and uncertainties, please see Super League's financial statements and MD and A for the second quarter ended 06/30/2025 available on EDGAR.

Operator

Important qualifications regarding forward looking statements are also contained in Super League's earnings release distributed earlier this afternoon and also available on EDGAR. Furthermore, the content of this conference call contains time sensitive information accurate only as of today, 08/14/2025. Super League undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. I'd now like to turn the conference over to Matt Hittleman, President and Chief Executive Officer. Please go ahead, sir.

Matt Edelman
CEO & President at Super League Gaming

Thank you very much, and thank you, to all who are joining us today. I'm pleased to bring you our second quarter twenty twenty five financial results and provide an update on our business. Super League second quarter was one of transition. We streamlined our operations, closed a series of important financial transactions, forged new partnerships to support our revenue diversification strategy, and reinforced our standing with key brand clients with more than 75% of our closed deals coming from repeat customers. Our accomplishments have realigned the company's focus and put us on a determined path towards sustainable profitability.

Matt Edelman
CEO & President at Super League Gaming

Importantly, we continue to see a compelling long term growth opportunity that validates our core mission. Our expertise is in enabling iconic brands and IP owners to engage the legions of consumers whose daily content consumption includes playing games. Whether within massive platforms such as Roblox, Fortnite, or Minecraft, or the rich universe of mobile games, our playable media and content solutions help brands capture and keep the attention of these audiences who play. At Super League, we think of play as a state of mind and body. While playing, people are engaged mentally and physically, emotionally connected, aspirational, and deeply focused.

Matt Edelman
CEO & President at Super League Gaming

There is no form of leisure content that inspires more authentic human behavior than play, which makes it the perfect forum for brands and advertisers to build lasting affinity with their desired customers. Our research shows that there are more than 5,000,000,000 people in the world who play in various forms, spending eight billion hours per day in active play mode, translating to more than three trillion hours of play per year worldwide. Audiences who play video games represent the largest segment at 3,320,000,000 people globally. One of the powerhouses in the video game industry continues to be Roblox, a user generated content platform in which every game is created by the community. Think of it as the YouTube of gaming.

Matt Edelman
CEO & President at Super League Gaming

Roblox recently posted remarkable second quarter results with record high revenue and strong growth in daily active users, hours engaged, and average monthly unique players. In March 2025, a user created game named Grow a Garden became the largest Roblox game in history and then the largest video game in history in terms of simultaneous players with at least 21,900,000 concurrent users, surpassings surpassing Fortnite's record of 15,300,000 and nearly matching the size of Netflix's audience for their debut NFL games on Christmas Day last year. The growth and power of interactive entertainment is undeniable with 85% of the total online population playing video games. That includes 98% of Gen Alpha, 96% of Gen z, and 88% of millennials. It is why the International Advertising Bureau has just announced a new measurement framework for gaming.

Matt Edelman
CEO & President at Super League Gaming

This is where Super League lives, at the forefront of this thriving space, punctuated by our recently announced partnership with Advertising Week to launch the first ever gaming summit at AW New New York in October 2025. This summit will showcase the value, effectiveness, and scale available within this underappreciated sector with an expert advisory panel of marketers, creators, and gaming platform leads. Why does this matter? Because the story of the opportunity and case study successes must continue to be told. Despite the data, the shift of advertising dollars to meet consumers where they are the most passionate and attentive within interactive digital entertainment spaces is still in its early stages.

Matt Edelman
CEO & President at Super League Gaming

Measurement and attribution capabilities that validate the value of digital advertising spends are advancing, but not yet as well established as within other digital media formats. That's the opportunity for Super League, to stay in our leading position, to continue helping to define the future, and to bring creativity, products, and solutions to our clients that raise the bar. Our opportunity is to be the signature company that makes brands playable. Turning to our recent operating highlights. While immersive gaming platforms like Roblox, Fortnite, and Minecraft have been the backbone of our business historically, mobile gaming has emerged as an exciting growth opportunity, leading to our exclusive partnership with Ad Arcade, whose patented playable ad format outperformed standard playable ads by three x.

Matt Edelman
CEO & President at Super League Gaming

We now have access to the entire US population of mobile gamers, representing more than 56% of the country at a 190 191,000,000 people, advancing our ability to deliver scalable, brand safe solutions to advertisers across every consumer segment while diversifying the company's revenue mix. Nonimmersive platform revenue in q two remained approximately 15% of our total revenue, keeping pace with q one, whereas we did not have any meaningful mobile gaming revenue in the 2024. We are particularly encouraged by recent advancements with programmatic advertising partners that we expect to contribute to broader distribution of this unique playable media product in the second half of the year. With an eye towards further revenue diversification and complementing our current market opportunity, we announced an expansion of our partnership with Meta Stadiums that propel Super League into the TikTok ego TikTok ecosystem through their Metastars Creator Network, an AI powered TikTok centric monetization platform. This expanded collaboration aligns with our strategy to bring innovative solutions to brands across gamified content systems, with TikTok leveraging mobile gaming engagement and monetization best practices that drove more than 6,000,000,000 of $6,000,000,000 of in app purchase revenue in 2024, including through the Chinese version named Douyin.

Matt Edelman
CEO & President at Super League Gaming

We expect to see revenue from this initiative beginning in q four of this year and then scaling across 2026 through content commerce and campaign activations. With the importance of reliable data only increasing as the fuel powering the engine of businesses, we launched our first subscription product tied to immersive gaming named Roadtrends Pro. Roadtrends is a Roblox trend intelligence analytics tool providing actionable Roblox trend insights and unlocking new information for marketers, developers, investors, and analysts. The response has been encouraging with a broad array of subscribers already validating the opportunity. We see Roadtrends as another new contributor to revenue that can help accelerate our path to sustainable profitability while underpinning our company's leading position.

Matt Edelman
CEO & President at Super League Gaming

While our gross revenue reflected caution from marketers to max out their q two budgets due to tariff uncertainty, our client partnerships included programs with an enviable list of companies such as Disney, Mattel, LEGO, Hasbro, and Logitech. We broke into the sport of golf with Augusta National and the masters as well as the USGA, driving more than a 120,000,000 impressions with Gen Z and Gen Alpha audiences. We expanded on our past success in the finance category with Visa through an initial campaign with Ally, and we continued our work with longtime partner Chipotle. In April, at the IAB PlayFronts, the advertising bureau's dedicated marketplace showcasing advertising and sponsorship opportunities in the gaming industry, we introduced new products that have already been brought to life through two first to market opportunities. One is the recent launch of a bold first of its kind campaign across both Fortnite Creative and Roblox with Panda Express and their creative agency, The Many.

Matt Edelman
CEO & President at Super League Gaming

The activation continues to demonstrate the power of playability to drive memorable memorable brand engagement and transform a product launch into a hands on shareable adventure. The second is a never before seen cross platform program featuring interactive three d characters on Roblox, Fortnite Creative, and Minecraft, done in partnership with Universal Pictures for their animated film, Bad Guys two. Just this week, we were proud to partner for the third year in a row with HaiChu on a multidimensional Fortnite creative campaign. Their products look like they were they were designed to live inside video games. Also in q two, we acquired SuperSocial, an award winning roadblock studio with past clients, including Gucci, e.

Matt Edelman
CEO & President at Super League Gaming

F. Beauty, Walmart, Universal Music, Heidi Klum, and others. That addition expanded our brand partnership roster and resulted in a Roblox business that has delivered 49 immersive builds, racking up more than 390,000,000 visits and 3,000,000,000 impressions on the platform. We continue to look at select opportunities within a fragmented industry to consolidate assets and capabilities through attractive accretive acquisitions. In terms of our financial results, our q two revenues grew sequentially by 10% but decreased 27% on a year over year basis due to macro headwinds largely attributable to tariff uncertainty and as we complete the process of adapting to the structural shifts in the Roblox ad ecosystem as previously discussed.

Matt Edelman
CEO & President at Super League Gaming

With that said, our relentless focus on higher margin revenue is paying off with q two gross margin at 44% compared to 40% in q two a year ago and up from 38% in fiscal year twenty twenty four. Our cumulative cost reductions, as previously announced, further led to the 23% pro form a operating expense decrease in Q2 twenty twenty five compared to the prior year quarter. Most encouraging as we look to the second half of the year with the hard restructuring work behind us, we see promising signs on the revenue front. Of note is our East Coast sales performance. New York is the largest advertising market in the world and had been under resourced, leading to the bulk of our revenues coming from West Coast based brands and relationships.

Matt Edelman
CEO & President at Super League Gaming

With team members anchored in New York and Chicago and a new regional leadership installed in q three twenty twenty four, we have broken through and begun to unlock the potential of this invaluable market. Our East Coast sales revenue was up a 150% through June 30 compared to the 2024, with our top seller having achieved almost a 100% of his annual $3,000,000 target in just the first six months. Knowing that more advertising dollars are put to work in the back half of the calendar year, we see this progress as setting a new benchmark for Salesforce efficacy with annual revenue targets per seller of $5,000,000 or more being possible in the future. Our strategic work in q two was no less ambitious. As part of further streamlining our focus and reducing operational costs, we divested our Minecraft property in PVP to Mindvill LLC.

Matt Edelman
CEO & President at Super League Gaming

Through the all cash transaction, we became Mindvill LLC's exclusive partner for brand partnerships and advertising sales, expanding our access to Minecraft audiences. Simultaneously, much of our effort has been focused on the necessary improvements to our capital structure and balance sheet. We've made substantial progress, curing our annual meeting and $1 bid price NASDAQ deficiencies, securing $6,600,000 in cumulative new capital since early May, 4,500,000.0 of which closed in the form of a convertible note with a conversion price premium to market just subsequent to the end of q two. We also took steps to reduce our 2025 debt service obligations by 90% from $5,700,000 to $600,000, including the conversion of high interest debt facilities into equity, and we established a $20,000,000 equity line of credit. Transactions will kick in during the second half of the year with greater operating leverage and corporate flexibility that allows us to pursue a broader range of strategic and capital market opportunities.

Matt Edelman
CEO & President at Super League Gaming

Taken together with our continued focus on revenue diversification and gross margin expansion, we remain on track and committed to delivering adjusted EBITDA positive results in q four of this year. Finally, lest you think we are unlike so many microcap companies in today's market, we are exploring opportunities in the cryptocurrency space. We are particularly enthusiastic about the recent passage of the Genius Act, which has established a regulatory framework for launching stablecoin powered programs that have the potential to drive deeper, more consistent, and more enduring consumer engagement for brands and advertisers. I'm grateful for your ongoing support and promise never to waver in my determination to lead Super League towards a more successful future. And with that, I'd like to turn it back to the operator to start the Q and A.

Operator

Thank you. We'll now be conducting a question and answer session. Session. Our first question today is coming from Jack Van Dorn from Maxim Group. Your line is now live.

Jack Codera
Equity Research Analyst at Maxim Group

Thank you. This is Jack Koderick calling in for Jack Vanderhoefer. Can you touch a little bit on the new revenue lines? I think you highlighted mobile has already grown to about 15% of total revenue. You're seeing potentially more programmatic in the future, a new subscription service.

Jack Codera
Equity Research Analyst at Maxim Group

From a high level, can you kind of describe the scope of the opportunity of each? And then maybe like a year or two ahead from now, what do you expect the mix to look like?

Matt Edelman
CEO & President at Super League Gaming

Hey, Jack. It's good to have your question. Thank you. And and a good question. So this year, the real opportunity will likely remain in in mobile in terms of diversification.

Matt Edelman
CEO & President at Super League Gaming

The subscription product and our partnership to move into TikTok will really just be getting started this year and probably not be as material, certainly compared to mobile. Our target for mobile has been to get it closer to 25% of our revenue this year. We're we're still aiming for that target. We'll certainly, you know, get, you know, get closer. And then as we look to next year, I think, you know, what we're really hoping is that the immersive platforms in general represent more, like, 50 to 60% of our revenue with 40 to 50% coming from these other areas that are still connected, of course, to reaching gaming and gamified content platforms.

Jack Codera
Equity Research Analyst at Maxim Group

Okay. That's super helpful. And then, given a little bit of efficiencies, do you see, your expenses to be do you expect this to be kind of like $1,700,000 $2,000,000 ish to be kind of the quarterly run rate of OpEx? Or do you expect that to kind of, you know, on a go forward basis, maybe creep up? Any commentary there would be helpful.

Matt Edelman
CEO & President at Super League Gaming

I mean, I we are we we don't have any plans to increase our expense footprint. We think we have rightsized the business for what company, needs to achieve in order to get to profitability, and, that's our, you know, determined, the goal and and and the outcome that that we're working hard to achieve. The, actual flow of of dollars will continue to be somewhat seasonal with the advertising industry, you know, typically spending more money, in certain quarters over others and the back half of the year being stronger. And so while we, you know, don't anticipate any any growth on the expense side, there will be, you know, a bit of of a likely dip in sort of our our revenue in in the first half of next year like there has been historically and then an acceleration in the second half like there has been historically.

Jack Codera
Equity Research Analyst at Maxim Group

Okay. Good to know. Thanks for taking my questions, and congrats on the solid quarter.

Matt Edelman
CEO & President at Super League Gaming

Thank you.

Operator

Thank you. Our next question today is coming from Howard Halpern from Taglich Brothers. Your line is now live.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Hi. Congratulations on the progress that you've made so far in Q2. In terms of what you're seeing, customer base, has that hesitation started to abate and activity increased in so far in q three?

Matt Edelman
CEO & President at Super League Gaming

That's a great question, Howard. Thank you, and good good to, you know, hear your voice. The answer is is yes. The the the fear we had in late q one and and early q two was that budgets were going to be cut. And and, thankfully, that's not what occurred.

Matt Edelman
CEO & President at Super League Gaming

They were just paused. And so a number of campaigns were pushed out a bit further than they had initially been planned to run. And a lot of the budgets that were sort of sitting on the sideline have opened up since then. And so we are seeing stronger signs than than we've seen in the past relative especially to q four and are very encouraged based on that that shift.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Okay. And is maybe enlighten us on your thinking. Now you moved, you said, to New York and Chicago, some some people in teams. What is the cycle gonna be like as they start to get close to their, what you call, their max capacity and and you adding new people? You know, what kind of cadence could we possibly expect from that from your Salesforce?

Matt Edelman
CEO & President at Super League Gaming

That's another another good good question. So from our experience, when you bring somebody new into your sales organization, it's it's a solid six months before, you know, they are, you know, sort of operating at at full throttle. And so as it relates to the East Coast, the fact that we are, you know, seeing some quite encouraging results does reflect that the team across Chicago and New York really did begin to solidify late last year. And and so, you know, we think that they're, you know, they've they've just begun hitting their stride, and it's one of the reasons we're encouraged by the second half of the year.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Okay. And so also from your perspective, are you looking for potential partnership or or, you know, maybe a small acquisition to exploit or find a way to exploit the Genius Act going forward or bring someone new into the organization that has some experience with stablecoin?

Matt Edelman
CEO & President at Super League Gaming

I'm glad you asked about that. We have we have a a handful of of ideas as to how the Genius Act might might open up business opportunities for Super League. We are surrounding ourselves with the right expertise and the right potential partners to make sure if we enter the space, it's from, the right starting point, with the right foundational elements. There is no need in today's world to, build those elements from scratch. And now that the regulatory framework makes it possible to really put together a a compelling consumer facing proposition, leveraging infrastructure that other companies have built is is a pretty profound opportunity.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

And you said opportunity in in terms of payments or more that the consumers of your customers in control of their digital footprint?

Matt Edelman
CEO & President at Super League Gaming

So I'm I'm not sure that where we would see the opportunity is is about the way that that customers would possibly manage their identity through the blockchain or, you know, other parts of the crypto ecosystem. I think for us, it's it's really about looking at new models for consumer engagement and helping our partners understand those models and take advantage of what's achievable, particularly because of the nature of of how the Genius Act was designed.

Howard Halpern
Principal Equity Analyst at Taglich Brothers

Okay. I just it's interesting. I know it's it's, like, brand new for many different industries out there, but I'm glad you're exploring it. And thanks, and keep up the great work.

Matt Edelman
CEO & President at Super League Gaming

Thank you very much, Howard.

Operator

Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments.

Matt Edelman
CEO & President at Super League Gaming

Thank you again for, joining the call today and and hearing about our progress. We are excited to be back here, telling you about, our achievements, in q three and hope you will stay tuned to what we're able to talk about between now and then. Thank you again.

Operator

Thank you. That does conclude today's webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

Analysts
    • Matt Edelman
      CEO & President at Super League Gaming
    • Jack Codera
      Equity Research Analyst at Maxim Group
    • Howard Halpern
      Principal Equity Analyst at Taglich Brothers
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