North American esports organisation FaZe Clan has announced a net loss of $14.04m (~£11.2m) for the first quarter of 2023, ending March 31st.
This is an increase over the organisation’s $9.54m (~£7.61m) net loss recorded during the same period last year. On top of an increase in loss, FaZe Clan also reported that revenues and gross profit had also decreased in Q1.
For Q1 2023, FaZe Clan’s revenues totalled $12.55m (~£10m), a decrease of approximately 20% from last year’s amount ($15.8m). Due to the cost of revenues largely staying the same across both quarters, this resulted in the company garnering a gross profit of $469,000 (~£374,000).
Brand sponsorships remain the organisation’s largest sum of income, generating $6.26m in Q1 2023. This is followed by ‘content’ revenue, which amasses just over $3m. In Q1 2023, FaZe Clan’s esports revenue was $2.84m (~£2.26m), which is the only revenue subsection that increased from Q1 2022 ($2.42m).
In the SEC Filing, FaZe Clan noted a variety of key factors that will affect the organisation’s current and future financial results. This includes making sure the organisation navigates the evolving digital economy, holds on to and recruits talent, and retains market share within the ecosystem.
The after-effects of the COVID-19 pandemic as well as overall market and economic conditions were also attributed as limiting factors. The impact of these events, according to the FaZe Clan’s filing, may reduce the organisation’s ability to access capital, thus impacting its liquidity. However, FaZe Clan went on to state that it still has ‘sufficient resources’ to fund its operations for a further 12 months from the date of the financial results.
FaZe also detailed that the organisation had nine ‘significant sponsors’ — active deals worth over $500,000 — in Q1 2023, the same amount as last year.
In a press release, Lee Trink, FaZe Clan’s Chief Executive Officer, reiterated the company’s focus to drive brand sponsorships, enhance its network of talent and manage its costs.
“Despite the macro headwinds impacting our industry, we’re pursuing various opportunities in the US as well as internationally that we believe will deliver future growth and value creation,” Trink stated.
FaZe Clan has recorded notable competitive successes in 2023. This includes winning CS:GO’s $1m Intel Grand Slam prize, as well as Atlanta FaZe winning the Call of Duty League 2023: Major 2. The organisation was also announced as a PUBG Esports global partner.
