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Introduction & Market Context
Golden Matrix Group Inc (NASDAQ:GMGI) released its Q1 2025 earnings presentation on May 8, 2025, reporting substantial revenue growth but facing significant margin pressure. The gaming and betting technology provider saw its stock trade at $1.85, down 1.6% on the day, and significantly below its 52-week high of $6.27, reflecting ongoing investor concerns about profitability despite top-line expansion.
The company’s Q1 results come after a "transformational" 2024, during which Golden Matrix positioned itself among the top five global gaming companies through strategic acquisitions and technology investments. However, the latest quarter shows the challenges of balancing growth with profitability in the competitive iGaming landscape.
Quarterly Performance Highlights
Golden Matrix reported Q1 2025 revenue of $42.7 million, representing a 72% year-over-year increase. However, this impressive top-line growth was accompanied by significant margin compression and a swing to a net loss.
As shown in the following financial summary:
While gross profit increased by 37% to $24.2 million, gross margin contracted substantially to 56.6%, representing a 1,456 basis point decline from the prior year. The company reported a net loss of $0.3 million, a $4.2 million decrease from the $3.9 million profit in Q1 2024. Adjusted EBITDA declined 5% to $5.6 million, with adjusted EBITDA margin falling 1,054 basis points to 13%.
The company noted that currency headwinds reduced the quarter’s growth rate by approximately 4%. Excluding the impact of currency and prior year acquisitions, organic revenue grew at a more modest 10% rate.
Segment Analysis
Golden Matrix’s performance varied significantly across its three business segments, with Meridianbet Group driving the majority of revenue while showing mixed profitability trends.
The segment breakdown reveals the following performance metrics:
Meridianbet Group, the company’s largest segment, generated $27.7 million in revenue (65% of total), growing 12% year-over-year. However, segment profit for Meridianbet declined 10%, indicating margin pressure in the core business. GMAG contributed $3.8 million in revenue with $0.2 million in segment profit, while RKings & CFAC added $11.2 million in revenue and $0.6 million in segment profit.
The Meridianbet segment showed strong operational metrics despite profit challenges:
These operational improvements included a 22% increase in new registrations, 56% growth in first-time deposits, 12% higher total deposits, and a 7% rise in active users. The company also expanded its geographic footprint by securing a Brazil license, launching B2B operations in Nigeria, and renewing its 10-year online license in Serbia.
Balance Sheet Improvements
Despite profitability challenges, Golden Matrix strengthened its balance sheet during the quarter, reducing debt and improving liquidity metrics.
The following chart illustrates the company’s debt and liquidity position:
Total (EPA:TTEF) debt decreased to $64.85 million from $71.02 million in Q4 2024, while cash remained relatively stable at $35.19 million. This resulted in net debt of $29.66 million, down from $38.40 million in the previous quarter. The company’s net debt leverage ratio improved to 1.6x from 1.8x in Q4 2024.
Working capital showed significant improvement, reaching $16.08 million compared to just $1.55 million in Q4 2024, providing the company with enhanced financial flexibility.
The detailed reconciliation of net debt and leverage calculation shows the positive trend:
Forward Guidance & Strategic Initiatives
Looking ahead, Golden Matrix provided revenue guidance for the full year 2025, projecting total revenue between $190 million and $195 million. This represents year-over-year growth of 26% to 29% compared to 2024.
The company’s strategic focus remains on expanding its regulated market access, enhancing its content portfolio, and driving operational efficiencies. Key initiatives include the expected Romanian online license in Q2, five new U.S. sweepstakes integrations, and strengthening its crash games portfolio.
Golden Matrix’s reconciliation of GAAP to non-GAAP metrics provides additional insight into the company’s underlying performance:
While the company reported a GAAP net loss of $258,217, adjustments for interest, taxes, depreciation, amortization, stock-based compensation, and restructuring costs resulted in adjusted EBITDA of $5.6 million. This represents a slight decline from $5.9 million in Q1 2024.
Conclusion
Golden Matrix’s Q1 2025 results present a mixed picture for investors. The company continues to deliver impressive revenue growth and has improved its balance sheet metrics, but profitability remains challenged by margin compression and increased operating expenses. As the company executes on its strategic initiatives and market expansions, investors will be closely watching whether Golden Matrix can translate its strong top-line performance into improved bottom-line results in the coming quarters.
The stock’s current trading level, significantly below its 52-week high, suggests investors remain cautious about the company’s path to sustainable profitability despite its continued revenue momentum.
Full presentation:
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