North American esports organisation FaZe Clan has reported a net loss of $14.35m (~£11.27m) for Q2 2023, ending June 30th.
The organisation has also detailed a decrease in revenue and gross profit compared to the prior year. FaZe Clan’s revenue has dropped from $18.8m (~£14.8m) to $11.7m (~£9.2m).
Cost of revenues in Q2 2023 were lower, however, the organisation recorded a lower gross profit of $1.9m (~£1.5m), over $4m (~£3.1m) less than last year.
In the company’s letter to its Shareholders, FaZe stated that the decrease in revenue was largely due to a “deceleration” in brand sponsorship revenue. Whilst the organisation didn’t reveal the exact figure, FaZe Clan did highlight increased ‘esports revenue’ for the quarter.
The statement read: “In line with the overall macroeconomic climate, our current and prospective brand partners have experienced slower growth and higher business uncertainty in the first half of the year, leading to a much slower uptake in new sponsorships for FaZe.”
FaZe Clan also claimed that “unusual and highly public controversies” involving some FaZe founders exacerbated the organisation’s business impacts. Whilst this was not elaborated on, in May FaZe Rain engulfed the organisation in drama when he publicly criticised FaZe’s appointment of Stranger Things actor and streamer Grace Van Dien, whilst also claiming that the organisation loses six figures a month on esports.
Despite continued financial concerns, FaZe Clan does continue to competitively excel across a range of titles. In Q2 2023, FaZe won HCS Dreamhack Dallas (Halo), Brazil League 2023 – Stage 1 (Rainbow Six) and the FNCS 2023: Major 2 Brazil (Fortnite).
In July, FaZe also was involved in speculation regarding a potential acquisition. Enthusiast Gaming, one of the rumoured admirers, denied this interest, claiming it had not submitted an offer. However, GameSquare Esports, the other rumoured name, was unable to comment.
In the financial report, FaZe Clan provided an update on the “various capital structure alternatives” that the organisation is considering. “We are encouraged by the interest that various parties have expressed and look forward to arriving at the best possible outcome for our shareholders soon.”
FaZe Clan ended Q2 2023 with $21.2m (~£16.7m) in cash and equivalents.