Yesterday after market close, Playmaker Capital reported strong Q2/22 financial results. Similar to Q1, PMKR beat our estimate on revenue but missed on profitability due to increased corporate expenses. Organic growth came in at 10% YoY (amidst a tough comparable period) and 34% over the LTM, led by unique monthly users growing 27% YoY and total sessions growing 40% YoY. Per Comscore, PMKR had the 4th highest total visits among sports media groups in the Americas for June 2022, beating out major brands like Sports Illustrated and CBS Sports. Playmaker continues to focus on ramping up direct sales, citing a 50% YoY increase with direct sales now accounting for over half of revenue.

Playmaker completed one acquisition during the quarter (The Sports Drop) and two acquisitions subsequent to the quarter (World Soccer Talk and JuanFutbol). We would again like to reiterate our conviction in the PMKR management team and ecosystem itself, which still trades at a discount to its traditional media and B2B gambling peers.

Highlights from the quarter include:

• Revenue of $7.0M (+130% YoY including +10% organic growth) vs. our estimate of $6.6M.

• Gross margin of 90% vs. our estimate of 90% and 87% in Q1.

• Adjusted EBITDA (ex. corporate) of $1.8M (26% margin) vs. our estimate of $1.9M (29% margin). Adjusted EBITDA including corporate came in at $0.4M vs. our estimate of $1.0M.

• PF Revenue came in at $7.4M and PF Adj. EBITDA came in at $1.9M

• PMKR ended the quarter with a cash balance of $2.5M

Acquisitions: During Q2, PMKR acquired The Sports Drop for an undisclosed amount. The Sports Drop is a U.S. based sports media company with 3M monthly users, 30M monthly page views and 200M monthly ad impressions. This acquisition strategically expands Playmaker’s footprint in the U.S. and diversifies its audience away from Soccer/Latin America (Latin America now only represents 40% of revenue). Subsequently to Q2, PMKR acquired World Soccer Talk for $1.15M and JuanFutbol for $2.8M. World Soccer Talk is a U.S. based soccer-focused media business, expanding PMKR’s business model into affiliate revenue generation from sports streaming services. JuanFutbol operates social media pages, digital channels and web properties in Mexican and Hispanic U.S. markets; this acquisition supports PMKR’s geographic expansion into North America and adds 6M social media followers and 50M monthly viewers. For further details on the previous acquisitions, please refer to our last two notes.