Earnings call transcript: Golden Matrix Q1 2025 shows 72% revenue growth

Golden Matrix Group Inc. reported a robust performance in its Q1 2025 earnings, with revenue reaching $42.7 million, marking a significant 72% year-over-year increase. Despite this growth, the company recorded a net loss of $300,000, translating to 0¢ per share, aligning with market forecasts. Following the announcement, Golden Matrix’s stock price fell by 3.24%, closing at $1.85. According to InvestingPro analysis, the company appears slightly undervalued at current levels, with analysts maintaining a consensus buy recommendation and setting price targets between $3.10 and $4.00.

Key Takeaways

• Revenue for Q1 2025 surged by 72% year-over-year.
• The company launched its 5th generation sports betting platform, Atlas.
• Stock price declined by 3.24% post-earnings.
• Golden Matrix expanded its market presence in Brazil and Nigeria.

Company Performance

Golden Matrix demonstrated strong revenue growth in Q1 2025, driven by its diversified revenue streams and expansion into new markets. The company’s strategic initiatives, such as launching the Atlas platform and securing a permanent online betting license in Brazil, contributed to its performance. However, the net loss of $300,000 indicates challenges in maintaining profitability.

Financial Highlights

• Revenue: $42.7 million, a 72% increase from the previous year.
• Gross profit: $24.2 million, representing a 57% gross margin.
• Net loss: $300,000, equating to 0¢ per share.
• Cash and cash equivalents: $29.7 million.

Earnings vs. Forecast

Golden Matrix’s revenue surpassed the forecast of $43.12 million, while EPS met expectations at 0¢ per share. The slight revenue beat highlights the company’s strong market position and growth strategies.

Market Reaction

Despite the positive revenue performance, Golden Matrix’s stock fell by 3.24% to $1.85. This decline may reflect investor concerns over the net loss and future earnings potential. The stock remains within its 52-week range, indicating potential market volatility.

Outlook & Guidance

The company projects full-year revenue between $190 million and $195 million, with a growth rate of 26-29% anticipated for 2024. Golden Matrix plans to continue expanding its market presence and investing in technology innovation.

Executive Commentary

CEO Brian Goodman stated, "We are well positioned to continue building the company." Zoran Milosevic, CEO of MeridianBet, emphasized the strategic focus: "Our strategy is simple: grow smart, operate hard and return value." CFO Rich Christensen expressed optimism, saying, "We are excited about the growth opportunities for the year."

Risks and Challenges

• The company faces challenges in turning revenue growth into profitability.
• Future EPS forecasts indicate potential losses, which could affect investor confidence.
• Expansion into new markets carries risks related to regulatory compliance and competition.

Golden Matrix’s Q1 2025 earnings report highlights significant revenue growth and strategic market expansion, though challenges remain in achieving profitability and maintaining investor confidence. For deeper insights into Golden Matrix’s financial health, valuation metrics, and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

Full transcript - Golden Matrix Group Inc (GMGI) Q1 2025:

Conference Operator: Good morning, everyone, and welcome to Golden Matrix Group’s First Quarter twenty twenty five Earnings Call. We appreciate you joining us today. I will now hand the call over to Brett Melott, Managing Director of ICR. Brett, please go ahead.

Brett Melott, Managing Director of ICR, ICR: Thank you, and good morning, everyone. Welcome to Golden Matrix Group’s Q1 twenty twenty five earnings call. We appreciate you joining us today. On today’s call are Brian Goodman, CEO of Golden Matrix Group Zora Milosevic, CEO of MeridianBet and Rich Christensen, CFO of Golden Matrix Group. At the conclusion of this call, recording and supporting the resources will be available on Golden Matrix Group’s IR website.

As a reminder, today’s call will contain forward looking statements. Certain statements made on this conference call, including our responses to questions, may constitute forward looking information within the meaning of applicable securities laws. These statements are based on various assumptions about future events, including market and economic conditions, business prospects, technological developments and regulatory changes. While we believe these assumptions are reasonable, they are subject to risks and uncertainties that could cause actual results to differ materially. For a complete discussion of these factors, please refer to our most recent 10 Q filing and other public disclosures.

Non GAAP measures will be discussed and reconciliation of these numbers can also be found in our recently filed 10 Q and earnings press release available on our website. I will now hand over the call to Brian Goodman, CEO of Goldman Sachs Group.

Brian Goodman, CEO, Golden Matrix Group: Good morning, everyone, and thank you for joining us to review Golden Matrix’s first quarter twenty twenty five results. We are proud to kick off the year with strong momentum fueled by platform innovations and continued expansion into high growth regulated markets. Our first quarter reflects excellent group performance and elevated operating efficiency across the entire organization. Revenue grew at a robust rate, further demonstrating the strength of our business underpinned by our strategic road map and our geographic and operational diversity. We not only have unique diversity in terms of our extensive global footprint, but also in our diverse and scalable revenue streams, spanning scalable b to b technology solutions and dynamic b to c operations, positioning us at the forefront of the iGaming industry.

Our raffle business delivered record results in q one, including all time highs in revenue, ticket sales, and price values. We also added 26,000 news new users during the quarter, a 46% increase compared to q one two thousand and twenty four, highlighting the strength and momentum in this segment. We have eliminated the Lind Partners’ debt of approximately $9,600,000 and completed the conversion of over $9,500,000 in acquisition related debt by Meridian founders into equity. These actions have resulted in greater financial strength and flexibility and send a strong message that we are well positioned to focus on growth and drive long term shareholder value.

Rich Christensen, CFO, Golden Matrix Group: We’re excited to take you through the highlights, and I’ll now hand you over to our CFO, Rich Christensen, to walk you through the financial performance for the quarter. Thank you, Brian. Golden Matrix had a strong start to fiscal twenty twenty five. While the first quarter is our slowest quarter seasonally, we have continued to invest in our technology, execute in our existing markets, and expand in new markets to accelerate growth throughout the year. First, let’s start with revenue.

Total revenue for the first quarter of twenty twenty five was 42,700,000.0, representing a 72% increase year over year. Foreign exchange rates negatively impact the growth rate by roughly 4%, so constant currency growth was 76%. If we were to exclude the impact of our prior year acquisitions of both Golden Matrix and Classics for a Cause, recall that the MeridianBet acquisition was treated as a reverse merger, and so last year’s results only include MeridianBet. Revenue grew organically at 10%. Moving to gross profit.

Gross profit reached 24,200,000.0 in q one of twenty twenty five, reflecting a gross margin of approximately 57%. This was a decline of 14 percentage points due to the aggregation of GMAG and the RKINGS and Classics for a Cause segments. Our prior year results include our MRIdian BET segments at a grow at a gross margin of 71%. MRIdian BET’s gross margin improved to 72% in the first quarter of this year. Our other two segments, GMAG and R Kings and Classics for a Cause, combined had a gross margin of 29%, which was a 3% improvement over 2024.

We continue to see economies of scale now that we’ve completed our full transition of our core operations to Atlas, our fifth generation sports betting and iGaming platform. This migration has optimized after operational efficiency, enhanced scalability, and significantly improved the user experience, ensuring a seamless and more personalized journey for our players. Turning to operating expenses. Operating expenses grew 10,300,000 to 24,300,000.0 in the first quarter. This included 4,600,000.0 of acquired costs from GMAG and ARKINS, one million from the Classics for a Cause acquisition, and 1,400,000.0 from amortization of intangibles related to those acquisitions.

The remaining 3,300,000 relates to costs within our MeridianBet segment primarily to expand our business geographically, improve our market share, and advance our gaming technology. They include four things. First, start up costs for a Brazilian business. Second, promotional campaigns on social media and team sponsorship agreements focused on player acquisition and retention. Third, statutory increase in the minimum wage and taxes in Serbia, One of our largest European markets.

And fourth, the depreciation of our gaming platform Atlas, which we put in service late last year. We had a net loss of $300,000 or 0¢ per share. This was a decline of 4,200,000.0 and 5¢ a share from last year. Net income declined due to an increase in amortization of 1,700,000.0, interest expense of 1,500,000.0, and stock based compensation of 1,000,000. Excluding these items, adjusted EBITDA declined $300,000 or 5% to 5,600,000.0.

The additional operating expenses we incurred to accelerate growth offset the incremental gross profit generated in the first quarter. Turning to liquidity. As of 03/31/2025, we had 29,700,000 in cash and cash equivalents. Our net debt leverage ratio continues to improve and is now under 1.6 turns. Adjusting for the $9,500,000 debt conversion and the 9,600,000.0 early debt repayment, our estimated net debt service ratio would fall just over 1.2 turns.

Now I’ll hand it over to Zoranz Milosevic, CEO of MeridianBet, to discuss operational highlights for MeridianBet.

Zoran Milosevic, CEO, MeridianBet: Thank you, Rich. MeridianBet delivered strong operational performance in Q1, continuing to scale across regulated markets and deepen engagement with our core user base. New registrations increased by 22% driven by targeted campaigns and market specific activations. First time deposits surged over 56%, signaling higher conversion and stronger user intent. Total deposits rose 12%, reflecting both volume growth and deeper wallet share.

Active user grow 7% while spending per player in both sports and casino continuing to climb, supported by personalized engagement and broader content depth. This quarter also marked a major step forward in market access. We secured a permanent online betting license in Brazil, unlocking full national coverage in one of the world’s most valuable regulated gaming markets with projected GGR of over 5,600,000,000.0 in 2025 alone. Our licensing is valid through 2029 and positions Meridian Debt as the first mover in the high growth market entering a multiyear expansion phase with clear regulatory clarity. We launched b to b operations in Nigeria through a fully licensed local entity.

With over 60,000,000 bettors and a 2,000,000,000 market, it’s one of the Africa’s most dynamic gaming economies. Our entry builds on two decades of experience now backed by fully regulated approval for both sportsbook and casino. This gives us regulatory stability in a mature jurisdictions where our infrastructure, brand, and scale are very deeply embedded. We also continued our community investment. We delivered 56 community initiatives in q one, including health donations, global scholarships, responsible betting education, and sustainability projects.

Our global book donation campaign improved access to education in underserved regions. We also supported the Epic Trail, a multi country event connecting communities across Europe. These efforts strengthened our brand where it matters most, with the people and communities shaping our long term success. Expand Studios, our proprietary game development unit, also played a pivotal role in our content innovation and strategic reach. In the studio completed five new integrations with US based sweepstakes casino, expanding its footprint across the social gaming segment and introducing its proprietary titles in a broad North American user base.

We expect to receive our online license in Romania through Q2, ’1 of the key Eastern European iGaming markets. This will further expand our regulated footprint and open new distribution channels for our in house content. We are strengthening our trash game portfolio with a new in house title featuring distinctive mechanics and gameplay. It is a part of our broader push to expand proprietary content and deliver fresh experiences to our partners and players. Altogether, q one reflects the kind of execution we aim to sustain, strategic expansion, product ownership and control access to key growth markets.

We operate in some of the world’s most dynamic markets with focus, speed and control, and our strategy is simple, grow smart, operate hard and return value. Thanks for your time. I’ll reach back to you.

Rich Christensen, CFO, Golden Matrix Group: Thank you, Zorn. As we look at our performance in the first quarter of twenty twenty five and continuing through April, we are excited about the growth opportunities for the year. We expect our full year revenue to be between 190,000,000 and $195,000,000 representing a 26% to 29% growth rate over 2024. We remain committed to disciplined capital allocation and investments in that enhance growth and long term value for our shareholders. We are well positioned to build on our success with a strong balance sheet and significant opportunities across both existing and new markets.

Brian Goodman, CEO, Golden Matrix Group: Thank you, Rich, and thank you, Zoran. Goldman Matrix is entering the next phase of its evolution as a leading force in the global iGaming market with a powerful combination of consistent performance, operational strength, platform innovation, and expanding geographic reach, we are well positioned to continue building the company. Today’s results highlight our financial resilience and our ability to deliver scalable growth. The company is well positioned for long term success, and our commitment to profitable, sustainable growth remains stronger than ever. We are excited about the future and the opportunities that lie ahead, and we will continue to drive value through technology, leadership, strategic market expansion, and superior execution.

Thank you again for your continued support, and we look forward to an exciting and successful year ahead.

Conference Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time, and have a wonderful day.

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