Strathcona Resources Ltd

TSX:SCR

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the Score's First Quarter Fiscal Year 2021 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Alvin Lobo, Chief Financial Officer. Thank you. Please go ahead.

[Alvin Lobo, Chief Financial Officer]

Thanks, Rob. Hello, and good afternoon. Thanks for joining us on today's call and webcast for the Score's fiscal 2021 Q1 results. This is Alvin Lobo, the Score's, Chief Financial Officer. And presenting today with me are Founder and Chief Executive Officer, John Levy; and President and COO, Benjie Levy. At this time, we would like to caution our listeners that this presentation contains forward-looking statements. There are risks that actual results could differ materially from what is discussed, and that certain material factors or assumptions are applied in making these forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management and are presented for the purpose of assisting the Score's shareholders and analysts in understanding the Score's financial position, objectives and priorities and anticipated financial performance. Forward-looking statements may not be appropriate for other purposes. Additional information on items of note, the Score's reported results and factors and assumptions related to forward-looking information are all available in our financials and MD&A for Q1 fiscal 2021, both of which were filed on SEDAR a few moments ago, and are also available on our Investor Relations page at scoremediaandgaming.com. Our CEO, John Levy, will now begin the presentation.

[John S. Levy, Founder, Chairman & CEO]

Thanks, Alvin. Good afternoon, everyone, and thank you for joining us today as we review what has been a record-setting start to our new fiscal year. I'm pleased to report that the Score has turned in its best-ever quarter in terms of gaming handle and media revenue. These record results demonstrate how fans are increasingly engaging with our mobile sports media and betting platforms. We were prime and ready as sports resumed this quarter. As evidenced by the numbers, we're starting to unlock the potential of the Score and the Score Bet, showcasing the value of a fully integrated media and gaming business. As our gaming operations in the U.S. expand, we are simultaneously preparing for what is an enormous opportunity on the horizon in Canada, with the anticipated creation of a fully legalized and regulated sports betting and iGaming market. The Score's popularity in Canada is unmatched in the mobile sports space. And we are eager to deliver the Score Bet to our fans in our home territory. The momentum in Canada, coupled with these outstanding results, underscores our strong market position in mobile sports media and sports betting and the exciting opportunities ahead in these high-growth industries. We also further strengthened our balance sheet via the bought deal offering we closed in December, raising more than $46 million for working capital and other general corporate purposes. The proceeds support the multi-jurisdictional deployment and operation of the Score Bet and user acquisition and retention in jurisdictions where we are or will be operating. Also, today, in our earnings release, we announced that we are considering an additional public listing on a U.S. Stock Exchange. This strategy is one our management team has been studying, and we believe access to the U.S. capital markets would provide compelling benefits to the Score and our investor base. We'll further cover that news in today's call. First, though, I'd like to recap an impressive quarter for our gaming operations. When we launched our sports book, we applied our expertise in technology and mobile sports to create a completely differentiated betting experience, one that harnesses the power of media and gaming. It's an approach that is working. Gaming handle was up 535% year-over-year in Q1, reaching $55.8 million for the period as fans continued to gravitate to our unique combination of media and betting. This ongoing growth has been achieved as we deepen our market-leading media and gaming integration, including the launch of Bet Section on the Score app, which Benjie will share more on shortly. We are highly encouraged by the early foothold that we have established in this fast-growing industry. And we are well equipped to continue our expansion across North America. We believe the quarter with successful launches of the Score Bet in Colorado -- I'm sorry, we began the quarter with the successful launches of the Score Bet in Colorado and Indiana and we're preparing to debut in Iowa in the coming weeks, subject, of course, to regulatory approval. Now with marquee sporting events coming up, including the Super Bowl and our first NCAA tournament as an operator, we are extremely well positioned to continue on this growth trajectory. Of course, one of the markets we hope to be operating in soon is on our home turf in Canada. We estimate a market potential for online gaming here of between USD 3.8 billion and USD 5.4 billion in annual gross gaming revenue, based on historical data extrapolated from the legal online gaming markets in the U.S. and globally. Ontario alone is a huge market with population larger than all but 4 U.S. states. It is now clear that there is cross party support and strong momentum to amend Canada's outdated federal laws and enable legal sports betting market to flourish. And we have been actively participating in those conversations at both the federal and provincial levels. The Score is Canada's leading mobile sports brand with millions of loyal app users across this country, and we're in a great position to capitalize on the expansion of online gaming. We're hard at work preparing for this sizable opportunity and look forward to seeing legislation progress in 2021. As the only truly integrated mobile media and gaming company in North America, we are uniquely positioned for the tremendous opportunity ahead in gaming. Our industry, sports betting, mobile sports media and esports are high-growth and continue to rapidly develop. As previously mentioned, we are considering a listing on a U.S. Stock Exchange as the next step to achieve our business. In our view, it is timely for this consideration, and we believe the potential benefits for the Score and our investor base may include a significantly larger pool of capital, greater average daily trading volume, exposure to a larger number of U.S. retail and institutional investors and a potential increase in market valuation. In today's earnings release, we also announced that we'll be holding a virtual annual and special meeting of shareholders on February 10. At that meeting, and in conjunction with the potential listing, we'll be asking shareholders to approve a special resolution to authorize the Score's Board of Directors to elect a share consolidation. We've included details of the proposed share consolidation in our management information circular, which is being sent to shareholders in advance of the meeting and will be publicly available on our Investor Relations website. I'll now turn things over to Benjie, who will provide a summary of results in our media operations as well as a closer look at some other product and content initiatives this quarter. Benjie?

[Benjamin David Levy, President, COO & Executive Director]

Thanks, John, and good afternoon, everyone. In Q1, we achieved a new all-time record for media revenue, generating $10.6 million. Following the sports hiatus, brand partners have been eager to connect with our large and engaged mobile app audience. In the quarter, we ran campaigns for notable brands, including the NBA, Fox Sports and Trojan in the U.S. and Audi, Volkswagen and DAZN in Canada. Further, our app continues to be a relied upon source of sports news and content. We recorded an impressive 3.9 million monthly active users this quarter, each opening the Score an average of 116 times a month. These results were achieved in the absence of the traditional sports calendar with no regular season NBA or NHL action and are a strong indication of our brand loyalty with sports fans across North America. On to social media, where the power of our channels continues to attract both huge audiences as well as brand partners. We reached an audience of approximately 105 million users in Q1 across Twitter, Facebook, Instagram and TikTok, with Head & Shoulders and Subway activating on our platforms. Much like the user behavior we're seeing on our media app, fans are increasingly engaging with our social content, which serves not just as an opportunity to amplify the Score brand, but to drive advertising dollars as well. As John noted earlier, in Q1, we released that section on our media app, our most integrated and personalized suite of betting features ever. This new dedicated home for betting on our media app provides greater visibility for our gaming-related content and integrations with our sports book, including a deeper availability of markets and the ability to track your bets and receive cash out offers live, all within the Score. That section is an example of how we're successfully building integrations, enhancing our user ecosystem and driving cross-platform activity. Throughout this quarter, we've seen steady growth on the Score Bet, hitting record highs in new betters and overall betting activity during Thanksgiving week and then topping those numbers Christmas week as the NBA season tipped off. In both cases, we successfully execute integrated thematic campaigns by leveraging all of our content channels to onboard new users and drive betting activity. We'll be continuing this strategy, which is perfectly suited for our fully integrated media and betting platform. On Score Bet, product development work has been focused on our upcoming Iowa launch as well as ongoing enhancements to our user experience, including improving our already exceptional live betting experience. We're also starting to prepare for the anticipated launch of our online casino product in New Jersey later this year. Now turning to esports. We set a new all-time quarterly record for the third successive period, totaling 357 million video views across all platforms. Our esports division is thriving, and we remain one of the only traditional sports media players comprehensively covering esports, a testament to the model we've built and to the content we produce. As North America's preeminent esports media destination, we continue to secure brand partnerships with a list endemic and nonendemic companies such as GEICO, Ryot and Mastercard, who are interested in aligning with our award-winning programming and global reach. Last month, we also made our first foray into live event broadcasting as the exclusive English language broadcast partner for a marquee league of legends tournament from China. Our esports platforms offer huge audience reach and unrivaled brand recognition in the competitive gaming scene. It's no surprise that we will approach as the ideal partner to produce and distribute this event to fans worldwide. As the global esports landscape develops, we will continue to be opportunistic and aggressive in this space. I'll now turn things over to Alvin, who will talk in more detail about our financials.

[Alvin Lobo, Chief Financial Officer]

Thanks, Benjie. Before I provide a financial recap, let me take a moment to highlight a key development subsequent to the quarter. In December, we bolstered our balance sheet by closing our previously announced $40 million bought deal offering. With the full over allotment exercise, we issued an aggregate of 32.9 million Class A shares, raising gross proceeds of $46 million. Now to the financial recap of the quarter. Total revenue for Q1 fiscal 2021 was $8.5 million versus $9.2 million for the same period in the previous year. Media revenue in Q1 fiscal 2021 of $10.6 million was an all-time record for us in a single quarter, primarily driven by strong growth in direct to advertising revenue compared to the prior period. Gaming handle was $55.8 million in Q1 fiscal 2021. Gross gaming revenue was a negative $0.3 million in the quarter, when taking into account promotional costs and fair value adjustments on unsettled bets, this resulted in negative net gaming revenue of $2 million for the 3 months ended November 30. EBITDA loss in the quarter was $9.3 million versus an EBITDA loss of $4.8 million for the same period last year. Increase in EBITDA loss was primarily due to the result of additional expenses incurred in connection with the expansion of our gaming operations compared to the prior year. From a liquidity perspective, our November 30 pro forma cash balance is $62.4 million in both our $5 million revolving credit facility and our $6.25 million BCAP revolving credit facility are undrawn. That concludes the formal part of our presentation. Rob, we will now take questions from the analysts.

[Operator]

[Operator Instructions] And your first question comes from the line of Matthew Lee from Canaccord.

[Matthew James Lee, Associate Analyst of Telecom and Media]

Great choice of earnings call right on NHL opening night. So my first question is regarding to the, obviously, very solid handle numbers you guys posted. Can you maybe break that down in terms of the percentage that comes from New Jersey and that, that comes from other states?

[John S. Levy, Founder, Chairman & CEO]

So we don't -- we have not broken down the handle numbers on a state-by-state basis. The point that we usually talk to in that context is -- and the reason we don't is because of the nascent nature of the business operations in those states, Matt, as you know, we just basically launched in Colorado and Indiana. And we look at basically the total aggregate of what we're doing in a comparator overall. In the -- what we do see is in the numbers that we look at is that we're very encouraged by these early signs of what we're seeing actually in all the states. And we basically look towards, obviously, what the total handle is. And then we look at certain flag sort of tentpole events like Benjie mentioned when we had the special promotions on Thanksgiving. And then when we launched with the beginning of NBA, and also tonight, when we're starting in with the NHL, as you mentioned. And we see the number of new betters that are coming on board. It's very, very encouraging for us. But we don't break it out on a state-by-state basis.

[Alvin Lobo, Chief Financial Officer]

And Matt, just for additional context, like on a same-store basis, our growth was what we would expect and really healthy as well in terms of the comp year-over-year from a Jersey perspective?

[Matthew James Lee, Associate Analyst of Telecom and Media]

Right. Okay. That's very helpful. And then maybe on the media side, I mean, you guys talked about the fact that there was no NHL and NBA season. So naturally, your subscriber count was down. And sessions were down a little bit, but revenue was up significantly. So can you maybe help me understand what you're providing to advertisers year-over-year that really push them to come to the Score app and pay more per view?

[Benjamin David Levy, President, COO & Executive Director]

So I think, Matt, I can take that one. I think when you think about some of the dynamics in the market, I think, first of all, advertisers, we're very excited about the return to sports. Second, notwithstanding the fact that we didn't have NBA and NHL regular season action, we had tremendously strong engagement around the sports that we're in season with a monthly active user number that was more or less in line with what we had last year. So there was a tremendous amount of inventory. And I think we saw very strong performances from both our direct sales teams in Canada and the U.S. and that it stems from not just kind of the available inventory, but also some of the creativity and some of the packaging that we're able to put together, the custom units that we're able to deliver to our advertisers and the creative services that we're able to provide to them as well. So it really is a combination across the board of sports being back, inventory being available, and we're really seeing that momentum carry on now through December and into the new calendar year as advertisers are looking forward to regular season, NBA and NHL, looking ahead to March madness, which we missed last year. So couldn't be happier across the board with how our team has performed and how our advertisers have responded.

[Matthew James Lee, Associate Analyst of Telecom and Media]

That's fair enough. Okay. So just one last question for me, and I'll get back in line afterwards. Can you maybe discuss the Canadian legalization story in terms of what you believe is going to be the timing? And more importantly, how long would it take the Score to fix up its app in order to be able to launch in Canada post receiving a framework?

[Benjamin David Levy, President, COO & Executive Director]

Listen, I think you never want to predict exactly what a government time line is going to be. All of the information that we have to date, and the consensus seems to be there's momentum to get this done in 2021, which is something that's very exciting. And for our part, as John said earlier in the call, we're looking ahead. We want to be ready. We're laying the foundation from a platform perspective for that now. And so again, it is probably not right to put a stake in the ground and say exactly what the time line is going to be here, but we are on it, both from a government relations perspective and also from a product and platform perspective.

[Operator]

Your next question comes from the line of Suthan Sukumar from Eight Capital.

[Suthan Sukumar, Principal]

The first question for me is on the handle side of the business, on the betting side of the business. So obviously, impressive handle growth this quarter. Can you just provide some color on the level of cross select activity you saw during the quarter? More specifically, are you seeing an improvement quarter-over-quarter with respect to cross app usage and cross-sell activity compared to last quarter?

[Benjamin David Levy, President, COO & Executive Director]

I'll take a stab at this and then, John or Alvin, if you want to add in some color, okay? I think, Su, that we're still seeing that strong level of cross engagement between our media app and our betting app and with well over half of our users moving from one to the other. And I think when we look at what we rolled out in the fall with Bet Section, that was tremendously well received by our users. That is another significant integration point. I mean our -- first and foremost, users live on our box score pages during game time. And now we've introduced another area of the app for them to browse markets for them to track their bets for them to get personalized promotions and to engage around polling and other community-related features. So that has certainly strengthened the interconnection between media and betting over previous periods.

[John S. Levy, Founder, Chairman & CEO]

I guess the only thing I would add to that is we've always considered it as a complete ecosystem, right? And what we've always been looking for is this ability of our betters to seamlessly move back and forth from betting into the media app and actually making their best without even know which app they're in. And that's sort of the secret sauce and the beauty of our ability and the technology that we built into this thing. And the evidence that we're seeing that, that works is by the fact that we use the expression, we're getting better betters because once we get them, whether they come from Score Bet or the media app and become a better or whether we get them from -- through other efforts or through other promotions and they come in through the betting app, ultimately, it's -- they're part of this overall ecosystem. And as Benjie said, 50% of all of our betters, at least 50% of all of our betters are on both platforms. So that tremendously encouraging for us from a stickiness standpoint and also from a performance standpoint, when we think better betters, it's because they're hanging around longer and they're betting more. And it only makes sense because one of the attributes in sort of the betting world is that not only is there strong propensity for people to bet on props and for pregame and all that. But as you're well aware, more and more of it is tending towards in-game wagering. And when you have them part of your whole ecosystem and they're part of the brand, and they're in, looking at data and content, reading articles. And while the game is going on, that it's only a natural fit for them to continue to support their wager or reverse out of their wager or take some other wagers. So we're very, very excited about the fact that this idea of once they're a Score user, they're a Score user. And we think over time, what you're going to see is our Score users are going to be very, very loyal to the platform that we're offering.

[Suthan Sukumar, Principal]

Got it. And then with this high engagement on the betting side, how is this influencing user growth on the media app? Are you seeing any benefit from this on your overall user ecosystem?

[John S. Levy, Founder, Chairman & CEO]

So I'll take a stab at that. I guess the answer is we expect to see that. The issue is that from where we came from, and snapping out of COVID and then seeing that engagement come back strong is what was really encouraging for us. And then you also have to remember that with the sort of sports schedule being completely out of whack, right, I mean we're starting hockey tonight, very, very exciting. We started basketball, what, a week ago. Football sort of coming to a conclusion at the usual time and sort of -- so is the NCAA. So from week-to-week, these numbers change dramatically. So looking at it from a [ Bob ], we're very encouraged about how people snap back to the app. I think we reported something like their engagement was [ 129 a ] month. So snapping back to the high levels of engagement now that they've got something to follow and to look at. So I think once this sort of settles and god knows when that will be, sort of living day-to-day with the reality of the world we're in. I think you're going to start to see, again, this sort of whole concept of Score Bet creating more Score users -- Score users, obviously generating Score Bet. And as the brand becomes more and more expensive, the growth will continue to attribute to the brand.

[Suthan Sukumar, Principal]

The next question for me is on the win margins this quarter, they were negative this quarter on both a gross and net basis. Can you provide some color here on the delta? Was this really just kind of more so player favorable results and higher bonusing? Or are there other factors to consider?

[John S. Levy, Founder, Chairman & CEO]

Ben, do you want to take that?

[Benjamin David Levy, President, COO & Executive Director]

Sure. I mean, listen, on a net basis, the delta between gross and net, Suthan, is certainly on account of player promotions, and that's been consistent with us being in growth mode, opening up in new states. And on the growth side as well, it's a similar story. Listen, as we grow as the -- as our handle continues to grow and we continue to scale, we expect our gross margins to continue to normalize. And there isn't much more to it than that. I think we're very encouraged by what we -- by the strong growth in handle that we've seen and are looking forward to continuing to drive that in the 3 markets where we're open, opening up Iowa in the coming weeks and then continuing to build on that from there.

[Suthan Sukumar, Principal]

Great. Great. And just looking ahead in terms of new markets, you guys touch on Iowa, Michigan sounds like it's finally opening up as well. I believe you guys do have market access there. Where is that kind of on the priority list of new markets you're looking to enter? And are there any other states that are -- in addition to Canada and Ontario, are there any other jurisdictions that you're excited about in the near to midterm?

[Benjamin David Levy, President, COO & Executive Director]

Listen, I think there's not any states that we're -- we have a definitive additional state that we have definitive launch times in. We are very active from a market access perspective as we look to grow our footprint across the U.S. We have access, as you point out, in 13 states currently between our deal with Monmouth Park in New Jersey, our deal with Jacobs in Colorado, our multistate market access to [indiscernible]. But that's 13 of 50 states. And we are seeing legislatures across the country accelerate their consideration of sports betting, in large part due to the success they're seeing of the states that have legalized. And also the impact of COVID on their budget is driving states who were considering maybe doing it down the road to thinking about it now. The other interesting element that we're starting to see is that in addition to sports betting being considered by legislatures, iGaming is increasingly being picked up as well. We're seeing in Indiana and Iowa consideration of iGaming bills. Recall that in our agreement with Penn National, it includes market access for both sports betting and iGaming. And so that would be a natural extension of our iGaming offering that we're planning to debut in New Jersey in the second half of 2021 as part of our deal with Valleys Twin River.

[John S. Levy, Founder, Chairman & CEO]

The only thing I'd add, I'll add to what Benjie is saying, he is generally referencing the fact that things are opening up. We're involved in a whole bunch of very active discussions. I mean, obviously, we can't say anything until things actually occur. But we've always been more aggressive than most in the context of how fast we thought things were going to open up. And in fact, I've said this before that things are opening up even quicker than that. And we're building a team of people who are actively involved in all sorts of discussions and lobbying efforts and for states that have not yet come on board that are potentially coming on board sooner than we anticipate. So we -- let it be said that sort of a, number one, we're well plugged in, in all of the active opportunities that are out there. And we're really encouraged by the degree of potential for us to be able to secure more. Now of course, nothing is done until it's done. But we're expecting that over the course of the next -- whatever, hopefully, there's going to be more and more states coming on board, and we're going to be able to participate.

[Operator]

[Operator Instructions] Your next question comes from the line of David McFadgen from Cormark Securities.

[David John McFadgen, Director of Institutional Equity Research]

A couple of questions. Would you guys care to venture when you might see the win margin go positive and maybe even be mid-single digit?

[John S. Levy, Founder, Chairman & CEO]

I would say that we're seeing good progress. And it's -- a lot depends on additional states opening up and promotions and efforts that we're making in a state-by-state basis. And I think, David, the short answer to that is, we're seeing progress. We are -- we have targets for what we want to achieve. We know what it's going to look like when we get there because that's the way the industry develops, and that's the way it is across the board. And I can tell you it isn't going to take years to get there, and it's probably not going to happen in the next month or 2. So we're continuing to build. The momentum is working in that in our favor. And I don't think I can be any more specific than that, but we're starting to see encouraging results as we gain momentum in the states that exist. And hopefully, in the new state that come on board.

[David John McFadgen, Director of Institutional Equity Research]

Okay. Well, maybe just another question then. You gave a forecast for Canada for GGR up $3.8 to $5.4 billion. I think those were U.S. numbers, just asking for a clarification there. And secondly, is that a combination of sports betting and casino? Or is that just sports betting?

[Alvin Lobo, Chief Financial Officer]

It is U.S. dollars. Hey, David. And it's a combination of both sports betting and iGaming. And what that really -- that forecast is really just extrapolating the adult population in Canada. And looking at basically mature market, sports betting and iGaming, GGR markets and similar sort of mature markets like, I wouldn't even call them New Jersey [ immature ] market. Yes, I think there's still some ramp there. But in places like the U.K., Australia as well as Jersey, it's just extrapolating from more mature markets to what the growth potential we think is in this market?

[David John McFadgen, Director of Institutional Equity Research]

Like, would it make sense, in your opinion, to apply a 10:1 ratio, Canada, U.S.? I mean just or the other way around U.S. Canada? Because often, people will do that. And I don't know in your opinion, would that make sense to do that? And for this ballpark estimate?

[Benjamin David Levy, President, COO & Executive Director]

David, under normal circumstances, I would say that's right. I don't and I'm not trying to lead you in one direction or another. I think when we look at the 2 markets, we look at the dramatic differences in terms of our reach and our -- the brand recognition and -- look, everybody in Canada knows the Score. Everybody who's on mobile apps uses the Score. If you add up [ PSN, Sportsnet ], anybody else, they don't even come close to us. And the guys that you think are going to come in that we think are going to come in and compete in, hopefully, an open market environment, which I think that's what's being sort of suggested in Ontario, nobody's even close to us. So I'm not encouraging you to do a more than 10:1 or less than 10:1. I'm just saying when we look at our -- and try to think about how powerful the brand and our company is going to be. We have the pole position here. It's a lot different than in the states. And in the states, we're making great progress. But here, it's completely different. They're basically coming after us. We're not coming after them down there. So I -- we look at what the numbers are and we take our best guess as to what sort of market share and market penetration we're going to be able to achieve. And all I can say is it looks like it's a very, very exciting opportunity for us.

[David John McFadgen, Director of Institutional Equity Research]

No, no, I understand. But the $3.8 billion to $5.4 billion that's a market size, and you would obviously take whatever share you take, but that's the market size. I was just wondering that is the market size, correct? I'm just wondering if you can compare market size [indiscernible] it's sizing Can on a 10:1 ratio.

[John S. Levy, Founder, Chairman & CEO]

Oh, just the market size?

[David John McFadgen, Director of Institutional Equity Research]

Yes.

[Alvin Lobo, Chief Financial Officer]

I mean, David, again, like if you extrapolate, if you look at GGR per adult numbers for sports betting and iGaming, and you do the math, like if you assume 90% of the -- whatever the adult population is in the U.S., 250 million, 260 million or so. And you multiply that by those GGR per adult numbers and you assume that somewhere between 85% and 90% of that population over time will live in jurisdictions where fully remote online sports betting and iGaming is legal, and I would surmise that you get to that sort of extrapolation. It's just math again, when you're comparing 29 or so million Canadian adults relative to whatever that ratio is in the U.S. So it's probably not quite 10:1, it's probably 7:1 or 8:1. But again, this is all -- we're just talking about math. I'm not exactly sure what the exact numbers are, but on a one-on-one basis for however many adults there are in Canada relative to the U.S.

[Operator]

Your next question comes from the line of Matthew Lee from Canaccord.

[Matthew James Lee, Associate Analyst of Telecom and Media]

Can you maybe give us some color as to the amount in which the social media segment is driving revenue? Obviously, you're seeing great growth there. And you mentioned that there is some advertising attached to that. So could you maybe tell me how much -- or tell us how much advertising revenue is coming from that segment?

[Benjamin David Levy, President, COO & Executive Director]

Yes. Listen, Matt, I think, look, the ad sales are still dominated by our app. But we are seeing increasing growth both on our social media side and also on our esports side, where we're now seeing advertisers come to the table with 5 figure and 6 figure deals. So we're now getting beyond the stage of social media being an add-on to an existing sale. And these are sales that are now starting to take place as campaigns in their own right, with custom content being created and specific content and deliverables being -- put against those campaigns. So still, app dominated, but these are growing into meaningful contributors.

[Operator]

[Operator Instructions] And there are no further questions at this time. I'll turn the call back over to Alvin Lobo for some closing remarks.

[Alvin Lobo, Chief Financial Officer]

Thanks, Rob, and thank you, everyone, for joining us for our first results of fiscal 2021. We look forward to presenting to you again when we deliver Q2 results in mid-April.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.