Versus Systems Inc (VSSYW)VSSYW

Versus Systems Inc. (Nasdaq: VS)

Company Profile

Detailed history and background:

Versus Systems, Inc., formerly known as TradeUP Global Corporation and then CBB Banc Group, Inc, was founded in 2003 as a banking services provider. In 2018, the company changed its name and shifted towards providing esports technology including a tournament and event management platform called UpCIRCUIT and an esports content management system known as UMG Media, as well as content production, marketing, and distribution channels.

Description of the company’s core business areas:

• Esports infrastructure platform (UpCircuit): Providing services to esports organizations for hosting and managing online and live events, including tools for matchmaking, tournament administration, and data analytics.
• Esports media platform (UMG Media): Offering video production and content distribution for esports tournaments and content creators through various channels including YouTube, Facebook, and Twitch.
• Esports marketing services: Consulting, strategic development, partnerships, marketing campaigns, and influencer management.
• Game publishers, developers, and esports teams: providing a range of services including content creation, tournament hosting, influencer partnerships, and event promotion.

Overview of the company’s leadership team and corporate structure:

• Matthew Pierce: Chairman & CEO
• Kenneth LaFors: CFO
• Matthew Tomsich: Chief Technology Officer
• David Sluss: President, Esports Media
• Board members: Robert E. Martin, J. Douglas Bihl, Michael A. Miller
• Headquartered in Dallas, Texas, with additional operations in Florida and New Jersey.

Top Products and Market Share

Identification and description of Versus Systems Inc's top products and offerings:

• UpCircuit: An industry-leading esports tournament management platform used for organizing, hosting, and managing esports competitions across multiple games, with features for scheduling matches, tracking scores, managing brackets, and integrating with streaming and broadcast platforms.
• UMG Media: An esports video content platform used by organizations and content creators for video editing, distribution, and monetization. UMG media also provides services like tournament broadcasts for brands like ESPN, NBCUniversal Telemundo Deportes, CBS Sports and Ligan de Futbol Profesional (Mexican professional soccer league).

Analysis of market share: Versus Systems claims the largest market share of the esports tournament platform market. According to the company, UpCirciuit powers close to 590,000 tournaments a year, which translates to a significant portion of the estimated over 3.2 million total tournaments hosted annually in the global gaming market.

Comparison of product performance and market reception against competitors: Versus competitors within esports platform sector include companies like Battlefy and Toornament. UpCircuit is often praised for its comprehensive tournament platform features, scalability and customization, while its competitors may offer less advanced features or cater to smaller tournaments.

Total Addressable Market

The global Esports Market reached a total market volume of 1,084.1 million US dollars in 2021. It is estimated to grow at 13.44% CAGR from 2022 onwards, leading the market size is predicted to reach a volume of 2,172.3 million US dollars.

Financial Performance

The financial statements for Versus Systems, as reported on November 3rd 2023, revealed the following:

Revenue:

• 2021: $32.47M
• 2022: $41.15M
• 2023 (Q1 2023 to Q2 2023): $14.8M
• Net income**: *2021 *: $-21.87 M 2022: $-26.42 M
• 2023 (Q1 2023 to Q2 2023): $-3.3M Profit margins
• Gross Margin 2022: 36.44%
• Operating Margin 2022: -70.24% Profit Margin 2022: -71.36%. Earnings per share (EPS): *2021 *: $ -2.24 *2022: $-2.72 *2023: (TTM): $-2.92

Dividends and Shareholder Returns

The company currently does not pay dividends, and therefore no data on previous payouts exists. As the company is still in a growth stage with net losses in recent periods, dividend payments are likely not a focus at this point, and they may be used for further investment and expansion.

Shareholder returns:

• 5 year return (till Nov. 2, 2023) : -82.44%
• 1 year (till November 2, 2023): -60.34%

Growth Trajectory The company has shown revenue growth in recent periods. Despite net losses, they are investing heavily on growth and their platform Upciruit has the highest market share in its sector which positions it well for gaining market leadership and increasing profitability as the esports market expands in the coming years.

Market Dynamics

The Esports industry is growing steadily and expected to continue to see high levels of growth in the coming years, driven by increasing popularity, rising investments from brands and media organizations, as well as technological innovations. Versus is well positioned in this growing industry with strong market positions in its main business lines.

AI-Based Fundamental Rating

An evaluation of Versus Systems’s stock fundamentals using the AI-based model below.

Score: 6 out of 10.

The AI model factors the company’s current financials, market positions and growth trajectory. While Versus has strong market position in esports platform, its current financials and negative earnings raise concern. With investments, the platform shows promise for capturing market share in a fast growing sector, which justifies its current 6 rating out of 10 with potential to increase as its business matures and becomes profitable.

Disclaimers