EAST SIDE GAMES GROUP ANNOUNCES SECOND QUARTER 2026 RESULTS

VANCOUVER, BC, Aug. 13, 2026 /CNW/ -- East Side Games Group (TSX: EAGR) (OTC: EAGRF) ("ESGG" or the "Company"), today reported its financial results for the second quarter ended June 30th, 2026.

Second Quarter 2026 Financial Highlights:

• Revenue of $10.3M (down 46% YoY) 
• A-EBITDA of $1.36M (down 11% YoY) 
• A-EBITDA Margin of 13.2% (up 65% YoY) 
• DAU (Daily Active Users): 118,872 (down 41% YoY) 
• ARPDAU (Average Revenue Per Daily Active User):  $0.95  (down 9% YoY) 
• DAU/MAU (stickiness rate):  29.6% (up 22% YoY)

Second Quarter 2026 Commentary:

The second quarter of 2026 was focused on Adjusted EBITDA and maintaining disciplined cash management across the business. Operating within the borrowing constraints of our credit facility, the Company significantly reduced User Acquisition spend, concentrating investment on its most profitable player cohorts to preserve cash and maximize return on every marketing dollar deployed.

The Company completed a $2.95 million capital raise to support working capital and reduce debt.

The Company also resolved its litigation with Truly Social Games eliminating a significant contingent liability, removing ongoing legal costs, and allowing management to fully focus on the business. Under the settlement, the Company made an initial payment of $1.0 million, with the remaining $2.0 million payable in four equal installments of $500,000 every six months.

These actions reflect the Company's continued focus on strengthening its cash position, minimizing risk, and improving long-term shareholder value.

Corporate Update & Strategy: 

The Company's current User Acquisition strategy targets a 30-day return on ad spend, allowing it to focus on acquiring the most profitable player cohorts while maintaining overall capital efficiency. Management remains focused on generating cash flow and reducing debt over time. We have an offer in hand for a new credit facility providing the flexibility to invest in high-return User Acquisition while continuing to strengthen the balance sheet.

While this disciplined spending approach has significantly moderated near-term top-line revenue, it has improved capital efficiency and supports the Company's long-term strategy of building a stronger, more profitable business.

Outlook:

Beginning in mid August, the Company intends to materially expand its User Acquisition strategy by increasing daily spend with a focus on profitable cohorts in the highest-margin games. Each dollar spent will be closely measured and returned within short- to mid-term payback windows. This broader investment approach is expected to support higher revenue while maintaining a disciplined focus on long-term profitability.

Through the continued use of AI tools, the company has been able to better target players in its User Acquisition campaigns, iterate on advertising creative, and improve coding efficiency. New initiatives are being built with AI as a core tenet, with the expectation that they will be delivered in accelerated time frames and at a much reduced cost.

In light of the UA campaigns only being increased in mid-August instead of the previously anticipated timeframe, management is restating guidance at $40-44M for 2026, with A-EBITDA of $4-4.7M, a margin of approximately 10-12%.

Looking ahead, the Company remains focused on disciplined execution, strengthening its balance sheet, and driving sustainable, profitable growth through the remainder of 2026.

ABOUT EAST SIDE GAMES GROUP

ESGG is a leader in free-to-play mobile gaming, thrilling players with unforgettable experiences that spark lifelong fandom. Fueled by an entrepreneurial spirit, we are driven by creativity, flawless execution, and a laser-focused strategy. We develop and publish both original and licensed IP titles, license our cutting-edge GameKit(s) platforms, and strategically acquire studios or games to expand our family.

Headquartered in Vancouver with around 100 talent-dense team members, we operate over a dozen titles under East Side Games ("ESG") and LDRLY (Technologies) Inc. ("LDRLY"). Together, we're crafting, launching, and publishing mobile games across our own studios and an extended Game Kit partner network--reaching players on iOS and Android worldwide.

We power our success through in-app purchases ("IAP")--offering exclusive, game-enhancing virtual items--and in-game advertising. To keep growing, we focus on captivating audiences, keeping them engaged, and unlocking exciting new ways to monetize. We'll drive this momentum by launching bold new titles, enriching our current lineup, innovating discovery, expanding into fresh markets, and exploring new distribution platforms.

Additional information about the Company continues to be available under its legal name, East Side Games Group Inc., at www.sedar.com.

Forward-looking Information

Certain statements in this news release constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "expects," "anticipates," "plans," "intends," "believes," "estimates," "projects," "may," "will," "would," "could," "should," and similar expressions. Forward-looking statements in this news release include, without limitation, statements regarding the Company's 2026 outlook, including expected revenue and A-EBITDA margin; expected debt reduction, profitability and EBITDA performance; anticipated benefits from cost reduction initiatives, user acquisition changes and off-platform payments; the expected impact of changes to platform fees; the Company's ability to secure additional work-for-hire contracts or other fully funded development opportunities; and the status or outcome of discussions with RBC, including any tolerance, waiver or other accommodation in respect of covenant non-compliance. Forward-looking statements are based on management's current expectations, estimates, projections and assumptions, including assumptions regarding operating performance, player engagement and monetization, platform policies and fee structures, the implementation and impact of restructuring initiatives, the timing and amount of one-time costs, the availability of new commercial opportunities, and the Company's continued relationship with its lender. Such forward-looking statements are subject to significant risks, uncertainties and other factors that could cause actual results or events to differ materially from those expressed or implied by such statements, including, without limitation, risks relating to the Company's ability to execute on its strategic priorities, generate sufficient cash flow, satisfy or obtain relief from financial covenant requirements, complete restructuring initiatives as planned, realize anticipated cost savings or profitability improvements, maintain or grow player engagement and monetization, benefit from platform fee or policy changes, secure new contracts or platform opportunities, and general economic, market and industry conditions. Readers are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

SOURCE East Side Games Group Inc.

For Further Information: Media Inquiries: [email protected]; Investor Relations: [email protected]; 3104 - 1055 Dunsmuir Street, Vancouver BC V7X 1G4