• Revenue Diversification: Positive signs in Q1 with revenue diversification kicking in.
• Margins: Margins are recovering with higher-margin products added to the portfolio.
• Active Pursuits: Approximately $20 million in active pursuits across 77 unique programs.
• EBITDA Goal: Aim to be EBITDA positive in Q4.
• Cost Structure: Aggressively attacking cost structure to align with breakeven imperative.

• Warning! GuruFocus has detected 6 Warning Signs with SLE.

Release Date: March 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Super League Enterprise Inc (NASDAQ:SLE) is optimistic about optimizing its business model to deliver meaningful shareholder value despite facing micro-cap and macroeconomic challenges.
• The company has a healthy pipeline with approximately $20 million in active pursuits across 77 unique programs, indicating potential future growth.
• Revenue diversification is underway, with mobile games becoming a significant growth area, contributing to 16% of revenue in Q4 and expected to reach 20% in Q1.
• The appointment of Matt Edelman as the new CEO brings a wealth of experience and a fresh perspective to drive the company's transformation and strategic initiatives.
• The company is aggressively attacking its cost structure with the aim to be EBITDA positive by Q4, demonstrating a commitment to financial discipline and profitability.

Negative Points

• Super League Enterprise Inc (NASDAQ:SLE) faced structural shifts in the Roblox ad ecosystem, impacting its financial results in the latter half of 2024.
• The company is still in the market education phase, needing to convince brands of the value of targeting gaming audiences through playable advertising.
• There is a reliance on strategic partnerships and acquisitions to accelerate growth, with ongoing discussions but no binding agreements yet.
• The transition to a new CEO and leadership changes may introduce uncertainties during the company's transformational phase.
• The company acknowledges the need to reduce its burn rate and become more lean and scrappy, indicating current financial pressures.

Q & A Highlights

Q: Can you provide more context on discussions with potential acquisition targets and the status of the Infinite Reality deal? A: Ann Hand, CEO, explained that while nothing binding can be disclosed, discussions are ongoing with multiple companies, including Infinite Reality. The exclusivity period with Infinite Reality has expired, allowing Super League to explore other strategic opportunities that align better with their current strategy and goals.

Q: How is Super League addressing the changes in Roblox's ad ecosystem, and what are the biggest growth opportunities? A: Matt Edelman, President and Chief Commercial Officer, stated that Super League is part of Roblox's partner program, focusing on branded content opportunities. The company is adapting to Roblox's shift towards managing its own ads ecosystem and sees growth potential in mobile games and immersive platforms like Roblox, Minecraft, and Fortnite.

Q: What is the opportunity in mobile gaming, and how quickly can Super League launch mobile campaigns? A: Matt Edelman highlighted that Super League is focused on playable advertising and branded content in mobile games. Playable ads can be launched in less than a week, while branded content takes longer due to developer involvement. Mobile gaming is a fast-growing revenue stream, contributing significantly to the company's diversification strategy.

Q: How does Super League educate clients on the value of gaming advertising, and what role does data analytics play? A: Matt Edelman explained that educating clients is an ongoing process, supported by partnerships with major platforms like Roblox. Super League has developed products to facilitate data collection and reporting, helping clients understand the impact of gaming advertising and encouraging repeat business.

Q: What are the key growth vectors for Super League, and how do they support the company's vision? A: Matt Edelman emphasized the importance of diversification and exploring complementary product offerings. The company is expanding into mobile games and adjusting to changes in the Roblox ecosystem, aiming to reduce dependency on single platforms and drive meaningful growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.