GameSquare Holdings, Inc. (NASDAQ: GAME) is a vertically integrated media, entertainment, and technology company that operates at the intersection of gaming, esports, and digital content. The company's primary mission is to transform how brands and game publishers engage with younger demographics, particularly Gen Z, Gen Alpha, and Millennials, by leveraging ...GameSquare Holdings, Inc. (NASDAQ: GAME) is a vertically integrated media, entertainment, and technology company that operates at the intersection of gaming, esports, and digital content. The company's primary mission is to transform how brands and game publishers engage with younger demographics, particularly Gen Z, Gen Alpha, and Millennials, by leveraging a comprehensive platform that includes audience intelligence, media buying, creator partnerships, and full-service strategy. GameSquare's capabilities range from creative production and data-driven marketing to esports team ownership and event activation, making it a one-stop shop for brands seeking to authentically reach gaming-centric audiences. The company's flagship asset, FaZe Clan, is one of the most recognized esports and entertainment organizations globally, with a massive social media following and a cultural influence that extends beyond gaming. This acquisition positions GameSquare as a dominant player in the youth entertainment space. Financially, GameSquare has shown significant revenue growth, with a reported 95% year-over-year increase in its first quarter of fiscal 2026, reaching $14.5 million, up from $7.4 million in the prior-year period. However, the company has faced profitability challenges, with negative net margins and operating cash flow, indicating a focus on growth over near-term profitability. The company also engages in blockchain and cryptocurrency initiatives, operating an Ethereum treasury management program to generate yield and enhance capital efficiency, reflecting a forward-thinking approach to corporate finance. With 144 employees, GameSquare operates with a lean but specialized team, and its leadership is headed by CEO Justin Kenna, who brings experience from Goldman Sachs, Deloitte, and Ernst & Young. The company's strategic partnerships, such as with the Dallas Cowboys, demonstrate its ability to create unique crossover experiences that bridge gaming and traditional sports. GameSquare's future prospects depend on its ability to monetize its vast audience reach while managing operational costs, but its strong growth trajectory and industry positioning make it a notable player in the evolving digital entertainment landscape.
Operator: Good afternoon and thank you for joining us for the GameSquare Holdings 2026 Second Quarter conference call. On the call today, we have Justin Kenna, GameSquare CEO, and Mike Munoz, CFO. [Operator Instructions] Before management discusses the results, I'd like to remind everyone that certain statements in this call may be forward-looking in nature. These include statements involving known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. For more information about forward-looking statements and risk factors, please see our 10-K for the quarter ended June 30, 2026, which will be available on the company's website or with the Securities and Exchange Commission. I will now turn the call over to GameSquare CEO, Justin Kenna. Justin, please go ahead.
Justin Kenna: Thank you and good afternoon to everyone joining us on today's call. GameSquare delivered a strong second quarter that marked an important step forward in our financial performance. Revenue increased 137% year-over-year to $18.5 million. Gross margin expanded by nearly 20 percentage points to 49% and adjusted EBITDA improved to a second quarter record of $1.0 million. These results were ahead of our expectations and represented a meaningful acceleration from both the first quarter and the prior year period. Most importantly, our second quarter results demonstrate that GameSquare is generating profitable growth from its underlying operations. Our performance also reflects the strengths of the integrated platform we've built and the early benefits of recent acquisitions, including Click and TubeBuddy. Click has expanded our creative marketing, talent management, and campaign execution capabilities, while TubeBuddy adds a high-margin technology and SaaS layer that supports creators and publishers with workflow analytics, optimization, and AI-enabled tools. Together with Stream Hatchet's data, measurement, and creator intelligence capabilities, these businesses position GameSquare as a differentiated entry point into the creator economy, helping brands and publishers identify the right creators, activate campaigns, optimize content, and measure performance through a single platform. Our second quarter results are encouraging and we're excited as we enter the seasonally strong second half of the year. So I want to use my time today to review our second quarter performance in more detail, discuss the progress that we're making across the business, and provide an update on our expectations for the balance of 2026. GameSquare's profitable growth in the second quarter demonstrates that our operating strategy is producing the intended results. As revenue scales a higher margin business mix and prudent operating expense management are driving meaningful operating leverage across the platform. This progress reinforces our confidence in the scalability and earnings …
