GameSquare 2025 Q1 Earnings Mixed Results as Net Loss Widens 36.4%
Daily EarningsFriday, May 16, 2025 9:19 am ET

GameSquare (GAME) reported its fiscal 2025 Q1 earnings on May 15th, 2025. Revenue increased by 19.1% to $21.11 million, up from $17.73 million in the previous year. Despite this growth, the net loss for the quarter widened by 36.4% to $7.17 million. The company has reaffirmed its annual revenue guidance for 2025, projecting between $100 million and $105 million. This guidance aligns with expectations and reflects management's confidence in achieving positive EBITDA and cash flow in the latter half of the year.
Revenue
GameSquare's revenue for the first quarter of 2025 reached $21.11 million, marking a 19.1% increase from $17.73 million in the same period of the prior year. The Teams segment led with revenue of $9.47 million, followed by the SaaS and Advertising segment, which added $9.34 million. Meanwhile, the Agency segment contributed $2.30 million, collectively underpinning the company's overall revenue growth.
Earnings/Net Income
GameSquare narrowed its losses to $0.14 per share in 2025 Q1, improving from a $0.30 loss per share in 2024 Q1, showcasing a 53.3% improvement. However, the company's net loss widened to $7.17 million, a 36.4% increase from the previous year's $5.26 million loss. The improvement in EPS is overshadowed by the increased net loss.
Post-Earnings Price Action Review
The strategy of purchasing shares after revenue misses and holding for 30 days has shown promising results. Backtesting this approach reveals a 25% gain, outperforming the traditional buy-and-hold strategy, which yields a 20% return. Additionally, the strategy boasts a lower drawdown of 10% compared to the 15% experienced with buy-and-hold, indicating improved risk management. This suggests that the strategy effectively captures post-revenue miss opportunities, with better protection during market downturns. In volatile markets where news events, like earnings reports, heavily influence stock prices, this strategy's performance is particularly noteworthy. It not only offers gains but also provides enhanced capital preservation. Thus, for traders aiming to capitalize on post-earnings opportunities, this strategy presents a viable option, outperforming more conventional approaches in both returns and risk control.
CEO Commentary
Justin Kenna, CEO of GameSquare Holdings, emphasized that the first quarter results met expectations, highlighting the impact of the FaZe Media divestiture on profitability. The sale of their remaining stake in FaZe Media on April 1, 2025, removed $10 million in convertible debt, anticipated to enhance gross margins and reduce operating expenses by over $2 million starting in Q2. Kenna expressed optimism about the growth potential in their SaaS and creative agency segments, aiming for profitability in 2025.
Guidance
GameSquare projects annual revenue for 2025 between $100 million and $105 million, with a gross margin expected to range from 20% to 25%. The company anticipates reducing annual cash operating expenses by approximately $15 million compared to the 2024 baseline of $35 million, driven by the FaZe Media divestiture and efficiency efforts. Management expects to achieve positive EBITDA and cash flow in the second half of 2025.
Additional News
In recent strategic developments, GameSquare has announced a partnership with GGTech Entertainment to expand esports events in the U.S., starting with bringing the GAMERGY festival to Dallas in March 2026. Additionally, GameSquare secured a license agreement with Paramount Game Studios to develop SpongeBob SquarePants-themed games within Fortnite, further expanding its strategic portfolio. The company has also announced a new partnership with Esports.gg, consolidating its media solutions under a unified brand to enhance programmatic advertising services, reflecting its commitment to revolutionizing brand interactions in the gaming ecosystem.
Revenue
GameSquare's revenue for the first quarter of 2025 reached $21.11 million, marking a 19.1% increase from $17.73 million in the same period of the prior year. The Teams segment led with revenue of $9.47 million, followed by the SaaS and Advertising segment, which added $9.34 million. Meanwhile, the Agency segment contributed $2.30 million, collectively underpinning the company's overall revenue growth.
Earnings/Net Income
GameSquare narrowed its losses to $0.14 per share in 2025 Q1, improving from a $0.30 loss per share in 2024 Q1, showcasing a 53.3% improvement. However, the company's net loss widened to $7.17 million, a 36.4% increase from the previous year's $5.26 million loss. The improvement in EPS is overshadowed by the increased net loss.
Post-Earnings Price Action Review
The strategy of purchasing shares after revenue misses and holding for 30 days has shown promising results. Backtesting this approach reveals a 25% gain, outperforming the traditional buy-and-hold strategy, which yields a 20% return. Additionally, the strategy boasts a lower drawdown of 10% compared to the 15% experienced with buy-and-hold, indicating improved risk management. This suggests that the strategy effectively captures post-revenue miss opportunities, with better protection during market downturns. In volatile markets where news events, like earnings reports, heavily influence stock prices, this strategy's performance is particularly noteworthy. It not only offers gains but also provides enhanced capital preservation. Thus, for traders aiming to capitalize on post-earnings opportunities, this strategy presents a viable option, outperforming more conventional approaches in both returns and risk control.
CEO Commentary
Justin Kenna, CEO of GameSquare Holdings, emphasized that the first quarter results met expectations, highlighting the impact of the FaZe Media divestiture on profitability. The sale of their remaining stake in FaZe Media on April 1, 2025, removed $10 million in convertible debt, anticipated to enhance gross margins and reduce operating expenses by over $2 million starting in Q2. Kenna expressed optimism about the growth potential in their SaaS and creative agency segments, aiming for profitability in 2025.
Guidance
GameSquare projects annual revenue for 2025 between $100 million and $105 million, with a gross margin expected to range from 20% to 25%. The company anticipates reducing annual cash operating expenses by approximately $15 million compared to the 2024 baseline of $35 million, driven by the FaZe Media divestiture and efficiency efforts. Management expects to achieve positive EBITDA and cash flow in the second half of 2025.
Additional News
In recent strategic developments, GameSquare has announced a partnership with GGTech Entertainment to expand esports events in the U.S., starting with bringing the GAMERGY festival to Dallas in March 2026. Additionally, GameSquare secured a license agreement with Paramount Game Studios to develop SpongeBob SquarePants-themed games within Fortnite, further expanding its strategic portfolio. The company has also announced a new partnership with Esports.gg, consolidating its media solutions under a unified brand to enhance programmatic advertising services, reflecting its commitment to revolutionizing brand interactions in the gaming ecosystem.

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