• Total Net Revenue (Second Half 2024): USD 45.9 million, up 1.8% year over year.
• Event Production Revenue (Second Half 2024): USD 14.6 million, increased by 92.6% year over year.
• eSports Team Operations Revenue (Second Half 2024): USD 5.9 million, declined by 49.7% year over year.
• Talent Management Services Revenue (Second Half 2024): USD 25.4 million, down 1.3% year over year.
• Gross Profit (Second Half 2024): USD 0.6 million.
• Gross Margin (Second Half 2024): 1.4%, down from 10% in the prior year period.
• GAAP Net Loss (Second Half 2024): USD 8 million, compared to a net loss of USD 2 million in the prior year period.
• Adjusted EBITDA (Second Half 2024): Negative USD 7.3 million, compared to USD 1 million a year ago.
• Total Revenue (Full Year 2024): USD 85.3 million, up 1.9% over 2023.
• Event Production Revenue (Full Year 2024): USD 23.3 million, surged 147.5% year over year.
• eSports Team Revenue (Full Year 2024): USD 14.7 million, fell 32% year over year.
• Talent Management Revenue (Full Year 2024): USD 47.3 million, declined 10% year over year.
• Full Year Gross Profit (2024): USD 3 million.
• Full Year Gross Margin (2024): 3.5%, down from 8.6% a year ago.
• GAAP Net Loss (Full Year 2024): USD 12.7 million, narrowed from a net loss of USD 13.3 million the previous year.
• Adjusted EBITDA (Full Year 2024): USD 9.9 million, compared with negative USD 1.7 million in 2023.
• Cash and Equivalents (End of 2024): USD 9.6 million, up from USD 7.6 million a year earlier.

• Warning! GuruFocus has detected 2 Warning Signs with NIPG.

Release Date: April 30, 2025

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

Positive Points

• NIP Group Inc (NASDAQ:NIPG) reported a 1.8% year-over-year increase in total net revenues, reaching USD 45.9 million, driven by a significant 92.6% increase in event production revenue.
• The company has successfully diversified its business model, transitioning from a pure e-sports organization to a comprehensive gaming-centric digital entertainment company.
• NIP Group Inc (NASDAQ:NIPG) is receiving substantial funding support from strategic sources such as the Abu Dhabi Investment Office (ADIO) and the Guangxi government, which will improve cash position and operational flexibility.
• The establishment of a global headquarters in Abu Dhabi is expected to unlock efficiency gains and support regional expansion, benefiting from financial incentives and non-financial support.
• The company's strategic initiatives in game publishing and eSports hospitality are expected to contribute to incremental revenue and strengthen the broader ecosystem supporting long-term growth.

Negative Points

• Despite the overall revenue growth, NIP Group Inc (NASDAQ:NIPG) experienced a decline in e-sports team revenue by 49.7% year over year, reflecting softer advisor spending and sponsorships.
• Gross profit for the second half was only USD 0.6 million, with a gross margin of 1.4%, down from 10% in the prior year period, due to a heavier mix of large-scale music and e-sports events with lower margins.
• The company reported a GAAP net loss of USD 8 million, compared to a net loss of USD 2 million in the prior year period, mainly due to top line softness and higher marketing spend tied to the game publishing vertical.
• Adjusted EBITDA was negative USD 7.3 million, compared with USD 1 million a year ago, indicating challenges in achieving profitability.
• The restructuring of e-sports teams led to a temporary drop in rankings and revenue, impacting the company's financial performance in 2024.

Q & A Highlights

Q: What were the primary drivers of the 93% year-over-year growth in event production revenue in the second half of 2024, and is the lower margin profile of this segment a structural characteristic of large-scale music events? A: Mario Ho, Chairman & Co-CEO, explained that the growth was driven by hosting a higher number of events due to improved integration of resources. The margin dip was deliberate, with front-loaded staffing and marketing fees to secure tier-one festivals for 2025. Margins are expected to improve with infrastructure investments in Shenzhen NIP Arena and Guangxi Digital Sports Park, allowing for hosting events in-house and reducing third-party costs.

Q: Can you elaborate on your music festival pipeline and how they will contribute to overall profitability in 2025? A: Mario Ho stated that NIP Group plans to host 10 music festivals across major and regional cities in 2025, with ticket sales to tens of thousands. The company will also host top talent concerts, such as those by artist Yan Chen. Profitability is expected to improve as more events are self-funded, reducing reliance on third-party investors.

Q: Can you give us a sense of the health of e-sports team revenue in 2025 and whether you expect growth over 2024? A: Hicham Chahine, Co-CEO, noted that 2024 was a rebuilding year, impacting revenue. However, 2025 has started well, with improved performance and participation in tier-one events like PGL Astana. This will bring back revenue streams from prize money and digital itemization. The company also renewed its partnership with Red Bull and expects new partnerships, contributing to revenue growth.

Q: What are the benefits of joining the EWC, the eSports World Cup Foundation partner program, and how will these manifest in 2025? A: Hicham Chahine highlighted that being part of the EWC provides access to a USD 70 million revenue pool from club championships, marketing initiatives, and prize pools. It enhances global exposure and branding, aiding sponsorships and competitive performance. The program allows NIP Group to consolidate its teams and fan base, maximizing revenue share.

Q: Could you detail the execution timeline for the HQ build-out and the P&L impact of the ADIO incentives in fiscal 2025? A: Hicham Chahine explained that the HQ build-out in Abu Dhabi is underway, with staff redeployments and execution of the ADIO agreement, which provides USD 40 million over four years. The incentives are non-equity subsidies, impacting the company as they are triggered. Additionally, a 30% payroll subsidy for staff relocated to the UAE will significantly lower operational costs.

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