Golden Matrix (GMGI) - 2025 Q3 - Quarterly Results

Q2 2025 Financial and Operational Review Golden Matrix reported Q2 2025 results with 10% YoY revenue growth, reaching $43.2 million. Despite challenging customer-friendly sports outcomes in Europe, operational metrics like wager volume (+30%) and new registrations (+124%) accelerated. Meridianbet, a key segment, achieved 16% YoY revenue growth to $29.2 million, with online revenue increasing 20%. The company remains on track for full-year revenue guidance Executive Summary Golden Matrix reported Q2 2025 results with 10% YoY revenue growth, reaching $43.2 million. Despite challenging customer-friendly sports outcomes in Europe, operational metrics like wager volume (+30%) and new registrations (+124%) accelerated. Meridianbet, a key segment, achieved 16% YoY revenue growth to $29.2 million, with online revenue increasing 20%. The company remains on track for full-year revenue guidance Overall Performance and CEO Commentary Golden Matrix's Q2 2025 revenue grew 10% year-over-year, reaching $43.2 million, despite challenging customer-friendly sports outcomes in the European business. Operational metrics accelerated, with wager volume at Meridianbet increasing by 30% and new registrations climbing 124%. The company remains on track for its full-year revenue guidance - Q2 2025 revenue grew 10% year-over-year, reaching $43.2 million, despite challenging customer-friendly sports outcomes in the European business[2][4] - Operational metrics accelerated, with wager volume at Meridianbet increasing by 30% and new registrations climbing 124%[1][5] - The company is on track for its full-year revenue guidance, confident in business strength and future opportunities[2] Meridianbet Performance and Strategic Focus Meridianbet, a key segment, achieved 16% YoY revenue growth to $29.2 million, with online revenue, a strategic focus, increasing 20%. This demonstrates strong momentum in core growth channels - Meridianbet's Q2 revenue grew 16% year-over-year to $29.2 million[4] - Online revenue, a key strategic focus for Meridianbet, increased by 20%, indicating strong momentum in core growth channels[4] Key Financial Highlights (Q2 2025) Golden Matrix reported total revenue of $43.2 million, a 9.6% YoY increase, with gross profit reaching $24.4 million (56% margin). However, the company recorded a net loss of $3.6 million ($0.03 per share) and a 37% decline in Adjusted EBITDA to $3.4 million, primarily due to increased operating costs for expansion and interest expense Key Financial Highlights (Q2 2025) | Metric | Q2 2025 ($) | Q2 2024 ($) | YoY Change | | :----- | :------ | :------ | :--------- | | Total Revenue | $43.2M | $39.4M | +9.6% | | Gross Profit | $24.4M | $21.7M | +12.4% | | Gross Margin (%) | ~56% | ~54.65% | +135 bps | | Net Income (Loss) ($) | $(3.6M) | $15.6K (Net Income) | $(3.6M) decline | | EPS (Loss) ($) | $(0.03) | $0.00 | $(0.03) decline | | Adjusted EBITDA ($) | $3.4M | $5.4M | -37% | - The net loss was attributed to operating costs growing $2.4 million more than incremental gross profit and $1.5 million in interest expense from debt prepayment[4] - Adjusted EBITDA decline was due to increased operating spend for geographical expansion, market share improvement, and gaming technology advancement[4] Operational Momentum and Strategic Initiatives The company saw significant operational advancements across its segments, including strong performance in raffle ticket businesses, successful expansion into Brazil, robust growth in casino operations, and increased user engagement metrics. Expanse Studios also expanded its partnerships and certifications Meridianbet Core Value Drivers Meridianbet's product enhancements led to a 30% increase in wager volume and a 124% rise in new registrations, demonstrating accelerated core value drivers - Product enhancements at Meridianbet drove a 30% increase in wager volume[1] - New registrations climbed 124%, indicating strong user acquisition[1] Raffle Ticket Businesses The company's raffle ticket businesses, particularly RKings Competitions, showed exceptional performance, beating its all-time daily revenue record by 12% in Q2 and by an additional 40% in early August, with over 30,000 orders in a single day - Raffle ticket businesses, supported by new state-of-the-art systems, showed strong engagement and exceptional performance[4] - RKings Competitions beat its all-time daily revenue record by 12% in Q2 and by an additional 40% on August 1st, achieving over 30,000 orders in a single day[4] Geographic Expansion (Brazil) Meridianbet is fully operational in Brazil with a license through 2029, positioning the company to capture share in a projected $5.6 billion market - Meridianbet is fully operational in Brazil with a license valid until 2029[5] - Brazil is projected to be a $5.6 billion market this year, offering significant growth opportunities[5] Casino Business Growth Meridianbet's casino businesses outperformed, with Gross Gaming Revenue (GGR) surging 29% and turnover reaching $434 million (up 30% YoY). The content library expanded by 2,500 games, leading to a 50% QoQ increase in casino turnover per player - Casino GGR surged 29%, with turnover increasing 30% year-over-year to $434 million[5] - Expanded content library by 2,500 games resulted in a 50% quarter-over-quarter increase in casino turnover per player[5] User Metrics and Engagement Active users increased 15% YoY, and new registrations climbed 124%, primarily driven by the Brazil launch. First deposits rose 165% QoQ, and Sports revenue per player grew 28% despite challenging conditions - Active users expanded 15% year-over-year, and new registrations climbed 124%, largely due to the Brazil launch[5] - First deposits increased 165% quarter-over-quarter[5] - Sports revenue per player grew 28% despite challenging market conditions[5] Expanse Studios Developments Expanse Studios, Meridianbet's game development arm, established 13 partnerships in the U.S. social casino segment, surpassed 1,000 B2B partners, secured certifications in multiple countries, and launched a new title - Expanse Studios established 13 partnerships in the U.S. social casino segment and crossed the 1,000 B2B partner milestone[5] - Secured certifications in Brazil, Peru, Croatia, and Romania, and launched the new title "Gates of Olympia"[5] Financial Outlook Golden Matrix expects full-year 2025 revenue to be between $185 million and $188 million, representing 22% to 24% growth over 2024. This guidance accounts for Q2's customer-friendly outcomes, with July revenue showing a recovery in the European business, up approximately 25% sequentially and YoY in constant currency. The CFO emphasized expanding in regulated markets, enhancing technology, and driving shareholder value Full-Year 2025 Guidance | Metric | Full-Year 2025 Guidance ($) | YoY Growth (vs 2024) | | :----- | :---------------------- | :------------------- | | Revenue | $185M - $188M | 22% - 24% | - July revenue from the European business recovered as expected, growing approximately 25% sequentially and over 2024 in constant currency[6] - The company remains focused on expanding its presence in regulated markets, enhancing proprietary technology, and driving shareholder value through disciplined capital allocation[7] Company Information This section provides an overview of Golden Matrix Group and its acquired Meridianbet Group, detailing their business models, international operations, and regulatory compliance About Golden Matrix Group Golden Matrix Group is a Las Vegas-based B2B and B2C gaming technology company operating internationally. Its B2B division licenses proprietary gaming platforms, while its B2C division, RKings, runs an e-commerce site for paid competitions. The company also owns MEXPLAY, a regulated online casino in Mexico - Golden Matrix Group is a B2B and B2C gaming technology company based in Las Vegas, NV, operating across multiple international markets[11] - Its B2B division develops and licenses proprietary gaming platforms, and its B2C division, RKings, operates a high-volume e-commerce site for paid competitions[11] - The company also owns and operates MEXPLAY, a regulated online casino in Mexico[11] About Meridianbet Group Meridianbet Group, acquired by Golden Matrix in 2024, is an established online sports betting and gaming group founded in 2001. It operates in 15 jurisdictions across Europe, Africa, and South America, utilizing proprietary technology and scalable systems with an omni-channel approach. The company's software strictly complies with US law by declining gaming requests from within the United States - Meridianbet Group, acquired by Golden Matrix in 2024, was founded in 2001 and is an online sports betting and gaming group[12] - It is licensed and operates in 15 jurisdictions across Europe, Africa, and South America, using proprietary technology and scalable systems with an omni-channel approach[12] - The company's sophisticated software automatically declines any gaming or redemption requests from within the United States, ensuring strict compliance with current US law[13] Consolidated Financial Statements This section presents Golden Matrix's consolidated financial statements, including balance sheets, statements of operations, and reconciliation of non-GAAP measures, providing a detailed view of the company's financial position and performance Consolidated Balance Sheets As of June 30, 2025, Golden Matrix reported total assets of $210.3 million, a slight decrease from $213.7 million at year-end 2024. Total liabilities decreased significantly from $104.8 million to $85.3 million, primarily due to a reduction in non-current liabilities. Total equity increased to $125.0 million from $109.0 million Consolidated Balance Sheets | Metric | June 30, 2025 (Unaudited) ($) | December 31, 2024 (Audited) ($) | Change ($) | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | ASSETS | | | | | Total Current Assets ($) | $38,967,045 | $45,066,481 | $(6,099,436) | | Total Non-Current Assets ($) | $171,307,457 | $168,651,112 | $2,656,345 | | Total Assets ($) | $210,274,502 | $213,717,593 | $(3,443,091) | | LIABILITIES | | | | | Total Current Liabilities ($) | $63,566,107 | $63,550,543 | $15,564 | | Total Non-Current Liabilities ($) | $21,725,872 | $41,216,470 | $(19,490,598) | | Total Liabilities ($) | $85,291,979 | $104,767,013 | $(19,475,034) | | SHAREHOLDERS' EQUITY | | | | | Total Equity ($) | $124,982,523 | $108,950,580 | $16,031,943 | - The decrease in total liabilities was largely driven by a significant reduction in non-current portion of consideration payable – related parties, which went from $15,000,000 to $0[22] - Additional paid-in capital increased substantially from $50.3 million to $70.4 million[22] Consolidated Statements of Operations and Comprehensive Income For Q2 2025, Golden Matrix reported revenues of $43.2 million, up 9.6% YoY, but incurred a net loss of $3.7 million, compared to a net income of $15.6K in Q2 2024. This shift was primarily due to a significant increase in selling, general, and administrative expenses and higher interest expense. For the six months ended June 30, 2025, the company also reported a net loss of $4.0 million, a decline from a net income of $4.0 million in the prior year period Consolidated Statements of Operations and Comprehensive Income | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues ($) | $43,245,368 | $39,415,242 | $85,968,421 | $64,265,829 | | Cost of goods sold ($) | $(18,868,349) | $(17,729,700) | $(37,395,441) | $(24,888,357) | | Gross profit ($) | $24,377,019 | $21,685,542 | $48,572,980 | $39,377,472 | | Selling, general and administrative expenses ($) | $26,681,869 | $21,560,430 | $50,983,847 | $35,558,239 | | Income (loss) from operations ($) | $(2,304,850) | $125,112 | $(2,410,867) | $3,819,233 | | Interest expense ($) | $(1,481,669) | $(32,484) | $(2,953,029) | $(36,855) | | Net income (loss) ($) | $(3,731,891) | $15,626 | $(3,990,108) | $3,964,648 | | Basic EPS ($) | $(0.03) | $0.00 | $(0.03) | $0.04 | | Diluted EPS ($) | $(0.03) | $0.00 | $(0.03) | $0.04 | - The significant increase in selling, general and administrative expenses (Q2 2025: $26.7M vs Q2 2024: $21.6M) and interest expense (Q2 2025: $1.48M vs Q2 2024: $32K) were major contributors to the net loss[23][24] Reconciliation of Non-GAAP Financial Measures The reconciliation shows that Adjusted EBITDA for Q2 2025 declined by 37% to $3.4 million from $5.4 million in Q2 2024. For the six months ended June 30, 2025, Adjusted EBITDA was $9.1 million, down from $11.3 million in the prior year period. This non-GAAP measure excludes items like interest, taxes, depreciation, amortization, stock-based compensation, and restructuring costs to provide a supplemental view of performance Reconciliation of Non-GAAP Financial Measures | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) ($) | $(3,731,891) | $15,626 | $(3,990,108) | $3,964,648 | | EBITDA ($) | $2,032,675 | $3,243,124 | $6,454,716 | $9,087,250 | | Adjusted EBITDA ($) | $3,448,989 | $5,428,162 | $9,061,289 | $11,318,651 | - Adjusted EBITDA declined by 37% in Q2 2025 compared to Q2 2024, primarily due to increased operating expenses as noted in the financial highlights[4][25] - Adjusted EBITDA is a non-GAAP measure that excludes interest, taxes, depreciation, amortization, stock-based compensation, and restructuring costs, providing a supplemental view of the company's performance[14][25] Disclosures and Investor Information This section provides important disclosures regarding non-GAAP financial measures and forward-looking statements, along with investor relations contact information Non-GAAP Financial Measures The report defines Adjusted EBITDA as a non-GAAP financial measure, representing net income before interest, taxes, depreciation, amortization, stock-based compensation, and restructuring costs. It is presented as a supplemental measure for investors due to various non-cash items but has limitations and should not be considered in isolation from GAAP results - Adjusted EBITDA (AEBITDA) is a non-GAAP financial measure that represents net income before interest expense, interest income, taxes, depreciation and amortization, stock-based compensation expense, and restructuring costs[14] - It is provided as a supplemental measure for investors due to non-cash items but has limitations, including not reflecting cash expenditures, working capital needs, or debt service requirements[14] - Investors should not consider Adjusted EBITDA in isolation or as a substitute for GAAP results[14] Forward-Looking Statements The document contains forward-looking statements identified by words like "expects," "plans," and "believes," which are subject to various risks and uncertainties. These include funding for repurchase programs, acquisition obligations, market conditions, regulatory changes, and competition. Actual results may differ materially, and the company cautions against undue reliance on these statements, undertaking no obligation to update them except as required by law - The press release contains forward-looking statements, identified by terms such as "strategy," "expects," "plans," and "believes," which are subject to risks and uncertainties[16] - Important factors that could cause actual results to differ include funding for acquisition obligations, business and economic conditions, regulatory changes, competition, and the ability to manage growth[17] - The company cautions that the list of factors is not complete and does not undertake to update any forward-looking statements except as required by applicable law[19] Investor Relations Investors can access the full visual presentation and earnings call on the Golden Matrix Group IR website. Contact information for investor and press inquiries is provided, with Rich Christensen listed as the contact person - The full visual presentation and earnings call are accessible on the Golden Matrix Group IR website at https://goldenmatrix.com/events-presentations/[9](index=9&type=chunk) - For investor and press inquiries, Rich Christensen can be contacted at ir@goldenmatrix.com[20]