FaZe owner GameSquare nearly doubles sales in first quarter of 2026

Revenue of US$14.5 million in three months, against US$7.4 million a year earlier: GameSquare Holdings, the Nasdaq-listed company that owns FaZe Clan and runs its competitive teams as FaZe Esports, published its results for the first quarter of 2026 on May 14. The press release, issued from Frisco, Texas and filed with the US securities regulator, puts the rise at 95.0%.

The last line of the income statement went the other way. The net loss from continuing operations, meaning the businesses the company still runs, was US$17.6 million, against US$3.8 million in the first quarter of 2025. The company kept its targets for the full year unchanged.

The release does not give a figure for FaZe Esports, and it does not split revenue by business. The numbers below are those of the whole company, and all of them are unaudited.

GameSquare Holdings press release of May 14, 2026, for the three months ended March 31, 2026. Unaudited figures.

Sales up 95.0%, margin down four points

Revenue for the three months ended March 31, 2026 was US$14,503,721, the income statement of the release shows, against US$7,439,124 in the same quarter of 2025. That is US$7.1 million more.

The cost of earning that revenue grew faster than the revenue itself. Cost of revenue, the direct expense of delivering what was sold, more than doubled, from US$4.3 million to US$8.9 million. What is left after it is the gross profit: US$5.6 million, against US$3.2 million, a rise of 76.5%. Gross margin is that profit as a share of revenue. It was 38.4%, down from 42.5%, a loss of about four percentage points.

Below the gross profit come the operating expenses, the cost of running the company itself. They rose 23.2%, far less than sales, and the operating loss narrowed as a result.

Inside the operating expenses, the largest line is general and administrative costs, US$4.4 million against US$3.7 million. Selling and marketing rose the most in dollars, to US$2.1 million from US$1.3 million. Research and development was nearly flat at US$0.6 million. Depreciation and amortization, the charges that spread the cost of assets over the years they are used, doubled to US$0.4 million. Contract exit costs, what the company paid to leave agreements, fell to US$0.2 million from US$0.6 million.

Why the net loss reached US$17.6 million

The operating loss was US$3.4 million. The net loss from continuing operations was more than five times that amount, and about 4.7 times the net loss of a year earlier. The difference sits in the lines that come after the operating result.

Of the US$17.6 million, US$14.6 million is a loss the release records on the company's digital assets and a related fund investment, which leaves about US$3.0 million for everything else. Interest also changed sign: the company paid about US$0.3 million of interest in the quarter, where it had earned a small amount a year earlier. In the other direction, a fall in the value of a warrant liability, an obligation tied to rights to buy the company's shares, produced a gain of US$0.7 million.

The release names one more cost that it treats as exceptional: US$1.1 million of one-time transaction costs linked to the TubeBuddy acquisition.

Activities the company has sold or closed are reported apart, as discontinued operations. They cost US$94,320 in the quarter, against US$3.4 million a year earlier. With them, the total net loss was US$17.7 million, or 18 cents per share, against 14 cents. The per-share figure is spread over many more shares than a year ago: the weighted average count was 97.3 million, against 36.7 million.

The measure the company steers by

GameSquare asks to be judged on adjusted EBITDA. EBITDA stands for earnings before interest, taxes, depreciation and amortization. In the adjusted version, the company also removes a list of items it considers outside its day-to-day business. The reconciliation table of the release shows them: share-based payments of US$0.5 million, the transaction costs of US$1.1 million, the contract exit costs, the changes in fair value mentioned above and the result of discontinued operations, among others. It is a measure defined by the company, not by accounting standards.

On that basis the quarter ended with a loss of US$1,096,089, which the release rounds to US$1.1 million, against a loss of US$2,583,980 a year earlier. Set against revenue, the loss equals 7.6% of sales, where it was 34.7% in the first quarter of 2025.

Justin Kenna, the chief executive, describes the results in the release as in line with the company's expectations, and says sales momentum picked up at the start of the second quarter.

What the guidance asks of the next nine months

The company reaffirmed the guidance it had given for 2026: pro forma revenue of US$85 million to US$90 million, a gross margin of 35% to 40% and adjusted EBITDA of more than US$5 million.

The first quarter, on the same pro forma basis, brought US$15.8 million of revenue. That is between 17.6% and 18.6% of the year the company is guiding to, depending on the end of the range. It leaves US$69.2 million to US$74.2 million to come between April and December, or an average of US$23.1 million to US$24.7 million per quarter. On adjusted EBITDA, a pro forma loss of US$0.7 million after three months means more than US$5.7 million has to be earned over the rest of the year to pass the target. The pro forma margin of the quarter, 43.1%, is above the range.

TubeBuddy is a software service for people who publish videos on YouTube. GameSquare agreed to buy it from BENlabs on February 20, 2026, the release says; the company's annual report for 2025 describes it as a set of search, workflow, analytics and productivity tools for creators.

Where GameSquare's revenue comes from

FaZe Esports is one business among several. GameSquare's annual report for 2025, a Form 10-K filed with the US securities regulator, lists the others: Zoned, a gaming and lifestyle marketing agency; Code Red Esports, a talent agency based in the United Kingdom; Click, a gaming and esports talent agency based in Australia; Fourth Frame Studios, a production studio; Mission Supply, a merchandise business; Stream Hatchet, a platform that measures live streaming audiences; Sideqik, a platform for influencer marketing; and Gaming Community Network, a digital media company.

The same report breaks revenue from continuing operations down by type rather than by company. Agency revenue, which the report describes as coming from representing players, influencers and on-screen talent and from consulting on and brokering brand activations, is the largest line and the one that grew most: US$26.5 million in 2025, against US$12.1 million in 2024.

Owned and operated IP rose 24.6% from US$10.3 million. Software and managed services fell 11.8% from US$5.2 million. The report does not say how much of any line FaZe Esports represents. It describes FaZe as a lifestyle and media brand rooted in gaming and youth culture, earning from brand sponsorships, consumer products and esports.

The first-quarter release credits the agency and creator side for the period. It says the company supported Capcom's launch of Resident Evil Requiem, and that Hungryboy Hot Sauce, a brand created with the YouTube group The Boys, went on sale at the retailer H-E-B before reaching Spencer's and nearly 300 World Market stores. Click, its wholly owned talent agency, named Justin Miclat chief growth officer and signed several creators, among them Steak, whom the release presents as the second-largest Roblox creator. Management expects the new talent to add more than US$5 million of revenue a year.

The annual report counts about 144 employees on March 31, 2026: 84 in the United States, 35 in Spain, 15 in Australia, four in the United Kingdom, three in India and three in Canada.

Cash, borrowings and buybacks

GameSquare held US$2.4 million in cash on March 31, 2026, against US$4.6 million three months earlier, plus US$1.8 million of restricted cash, money set aside that it cannot spend freely.

Short-term borrowing grew. Current promissory notes, a form of loan due within a year, stood at US$9.5 million, against US$2.0 million at the end of 2025. Total liabilities were US$48.7 million against US$43.6 million, and shareholders' equity, what would be left for owners after all debts, fell to US$17.7 million from US$35.7 million. The annual report says, among its risk factors, that the auditors' report on the 2025 accounts includes an explanatory paragraph on the company's ability to continue as a going concern, the accounting term for a business expected to keep operating.

Two lines point to activity. Money owed by customers rose to US$10.7 million from US$8.7 million. Deferred revenue, cash received for services not yet delivered, was US$5.8 million, 46.0% above the US$4.0 million of December 31, 2025. Goodwill, the part of an acquisition price that exceeds the assets bought, rose to US$8.6 million from US$5.9 million.

The company also kept buying back its own shares, which reduces the number in circulation. It bought 2.07 million shares for US$0.75 million during the quarter. Since the program began in October 2025 and through May 13, 2026, the total is 7.35 million shares for US$3.6 million, and about US$11.4 million of the authorization remains.

FaZe Clan on the server

The part of the group that fans follow has had a difficult spring. GameSquare completed its acquisition of FaZe Clan in March 2024, HLTV reported at the time, a week after selling another organization, Complexity, to a group led by its founder for US$10.36 million. HLTV explained that sale by a rule: under Valve's rulebook, one owner cannot field two teams in the Counter-Strike Majors, the game's flagship tournaments.

In Counter-Strike 2, FaZe parted ways with head coach NEO on March 16, 2026 and then failed to qualify for the Cologne Major, which ended a run of 16 Majors in a row, according to HLTV. The team named enkay J head coach on April 16 and confirmed four days later the departure of karrigan, a member of the team since February 2021. On April 23 it announced Neityu as a stand-in, a temporary replacement, for its next events.

None of this shows as a line in the accounts. The Major starts on June 2 without FaZe. Kenna and the chief financial officer, Mike Munoz, were due to present the first-quarter figures on a conference call at 5:00 pm Eastern time on the day of the release.

The .esports registry publishes Esports Observer, so the whole scene can read its news for free.