Earnings call transcript: Golden Matrix Q2 2025 shows mixed results

Golden Matrix Group Inc. (GMGI) reported its second-quarter 2025 earnings, revealing a net loss of $3.6 million, or $0.03 per share, falling short of the forecasted loss of $0.0033 per share. Revenue also missed expectations, coming in at $43.25 million against a forecast of $46.38 million. The market responded with a 6% drop in GMGI’s stock price, closing at $1.41, which is near its 52-week low of $1.33. The stock has struggled this year, with a year-to-date decline of nearly 29%. InvestingPro analysis reveals several key challenges facing the company, with 6 additional exclusive ProTips available to subscribers.

Key Takeaways

• Revenue grew 9.6% year-over-year, reaching $43.2 million.
• Net loss of $3.6 million or $0.03 per share, missing forecasts.
• Stock price fell 6% post-earnings report.
• Expanded casino content library and launched new sports betting platform.
• Revised full-year revenue guidance to $185-$188 million.

Company Performance

Golden Matrix reported a 9.6% increase in revenue compared to the same quarter last year, driven by growth in its casino vertical and the launch of new products. Looking at the broader picture, InvestingPro data shows impressive revenue growth of 54.66% over the last twelve months. Despite this growth, the company faced challenges, resulting in a net loss. The company’s strategic expansions into new markets like Brazil and the Balkans highlight its efforts to diversify and strengthen its international presence, though financial health metrics indicate some concerns with short-term liquidity.

Financial Highlights

• Revenue: $43.2 million, up 9.6% year-over-year.
• Gross profit: $24.4 million, with a 56% gross margin.
• Net loss: $3.6 million, or $0.03 per share.
• Cash and cash equivalents: $22 million.
• Net debt leverage ratio: Under 1.5x.

Earnings vs. Forecast

Golden Matrix’s earnings missed expectations, with a reported EPS of -$0.03 compared to the forecasted -$0.0033. This represents an 809.09% negative surprise. Revenue also fell short, with a 6.75% miss against expectations. This underperformance contrasts with the company’s recent trend of meeting or exceeding forecasts.

Market Reaction

Following the earnings announcement, GMGI’s stock declined by 6%, closing at $1.41. This reaction places the stock near its 52-week low of $1.33, reflecting investor disappointment with the earnings miss. According to InvestingPro Fair Value analysis, the stock appears undervalued at current levels, suggesting potential upside for long-term investors. The broader market’s performance and sector trends did not favorably impact the stock’s movement. Detailed valuation metrics and comprehensive analysis are available in the exclusive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.

Outlook & Guidance

Golden Matrix revised its full-year revenue guidance to a range of $185-$188 million, indicating an expected growth of 22-24%. The company remains focused on regulated markets and continues to invest in technology and market expansion, aiming for profitable and sustainable growth.

Executive Commentary

"We operate with discipline, we invest with purpose, and we are building for the long term," stated Zoran Milosevic, MeridianBet CEO. Brian Goodman, CEO, emphasized the health and robustness of the underlying businesses, while Milosevic noted the diversified model’s ability to offset sports margin pressures.

Risks and Challenges

• Volatility in the sports betting market could impact future earnings.
• The temporary slowdown in revenue growth needs addressing.
• Expansion into new markets poses regulatory and operational challenges.
• Competition in the international market could pressure margins.
• Macroeconomic factors may affect consumer spending in key markets.

Q&A

During the earnings call, analysts questioned the volatility in sports betting margins observed in June and the temporary slowdown in revenue growth. The company addressed these concerns by highlighting a recovery in performance in July and emphasizing its diversified business model to mitigate market pressures.

Full transcript - Golden Matrix Group Inc (GMGI) Q2 2025:

Moderator/Operator, Golden Matrix Group: Thank you, and good morning, everyone. Welcome to Golden Matrix Group’s Q2 twenty twenty five earnings call. We appreciate you joining us today. On today’s call are Brian Goodman, CEO of Golden Matrix Group, Zoran Milosevic, CEO of MeridianBet, Rich Christensen, CFO of Golden Matrix Group. At the conclusion of this call, the recording and supporting 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 k 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 ks and earnings press release available on our website. I will now hand it over to Brian Goodman, CEO of Golden Matrix Group.

Brian Goodman, CEO, Golden Matrix Group: Good morning, everyone, and thank you for joining us to review Golden Matrix Group’s second quarter fiscal twenty twenty five results. Q2 was a challenging quarter with revenue growth of only 10% year over year, below our expectation of roughly double that rate. The shortfall was driven by unusual customer friendly sports outcomes in our European business where favorite teams won more often than historical averages. Excluding this temporary impact, we would have remained on track to meet our full year revenue guidance. Our analysis supported by July strong performance confirms that this volatility is random and not indicative of underlying trends.

With slower quarterly revenue growth coupled with continued investment to grow our active user base, our earnings declined. The operating leverage we have previously enjoyed worked against us during the quarter. While we were able to identify and eliminate costs, they will reduce our operating expenses by roughly $500,000 per quarter. It was not in time to benefit this quarter. We have recently built and deployed new state of the art systems to support our rental ticket businesses and the implementation of this new technology is already showing excellent results.

Our largest rental ticket business, Arkens Competitions, delivered several standout milestones this quarter, setting a new all time daily revenue high of over 3 and $15,000 surpassing the next best day of $281,000. And more recently, last week, on the August 1, posted a remarkable all time record in daily sales of over $440,000 for the day, which was driven by over 30,000 orders in one day. Additionally, gross profit in the month of July for ARKINS was over 26%. This performance underscores the resilience, strong engagement, growing monetization potential of our raffle ticket businesses and the massive potential that these businesses provide. I’ll now hand you over to our CFO, Rich Christensen, to walk you through the financial performance for the quarter.

Rich Christensen, CFO, Golden Matrix Group: Thank you, Brian, and good morning, everyone. I’ll provide a summary of our second quarter of twenty twenty five’s performance and then turn the call over to Zorin to discuss our operational highlights from MeridianBet. Please note that all income statement measures discussed except for non GAAP adjusted EBITDA are on a GAAP basis. First, let’s start with revenue. Total revenue for the second quarter was $43,200,000 representing a 9.6% growth over last year.

Foreign exchange was a benefit of 4.5%. This was roughly 10% weaker than what we’d anticipated and was primarily due to the impact of customer from the outcomes within our European sports betting business. As Brian mentioned, we see this as an anomaly and have since seen July return to our expected growth trends. If we were to exclude the impact of our prior year acquisition of Classics for a Cause and to were were to remove the 4.5% positive impact of foreign exchange, revenue was flat for 2024. Moving to gross profit.

Gross profit reached $24,400,000 in the 2025, reflecting a gross margin of approximately 56%. This is a 135 basis point improvement over the prior year. Our MeridianBets segment’s gross margin of 70% was lower by two seventy basis points compared to last year, primarily due to additional taxes assessed on gaming in Serbia. With the transition of our core operations to Atlas, our fifth generation sports betting and iGaming platform, and releasing the second generation of sports recommender, we are now realizing meaningful economies of scale. This migration has markedly enhanced operational efficiency, unlocked greater scalability, and elevated the user experience, delivering a seamless, intuitive, and increasingly personalized journey for our players across markets.

Turning to the other two segments, GMAG improved 444 basis points due to improved supplier terms and product mix. And our raffle ticket businesses, which include RKINGS and Classics for a Cause, had a gross margin improvement of 546 basis points from the acquisition of Classics for a Cause, which carries a higher gross profit. Turning to operating expenses. Operating expenses grew $5,100,000 to $26,700,000 in the 2025. This included 1,000,000 from the Classics for a Cause acquisition and 1,000,000 in foreign currency from a weakening US dollar.

The remaining 3,100,000.0 was primarily tied to our Meridian debt segments and reflects strategic investments to expand geographically, grow market share, and enhance gaming technology. Specifically, they include first startup expenses for our Brazilian launch. Second, marketing spend, including social media campaigns and team sponsorship aimed at player acquisition and retention. Third, regulatory cost increases from higher minimum wages and taxes primarily in Serbia. And finally, depreciation on our Atlas platform, was deployed late last year.

Additionally, we’ve made cost reductions that will reduce our operating expense burden by roughly $500,000 a quarter starting in the 2025. We had a net loss of $3,600,000 or $03 a share. This was a decline of 3,600,000.0 and 3¢ a share from prior year, and this was due to the increase in interest expense of 1,500,000.0 driven by our debt prepayment, which accelerated the amortization of debt discounts as well as accrued interest. This, in addition to our operating costs growing by $2,400,000 more than the incremental gross profit generated in the quarter gave rise to this loss. Excluding the additional interest expense, adjusted EBITDA declined by $2,000,000 or 37% to $3,400,000 Turning to liquidity.

At quarter end, we had $22,000,000 in cash and cash equivalents, and our net debt leverage ratio continues to improve, now under 1.5 turns. Now I’ll hand it over to Zorin Milosevic, our CEO of MeridianBet, to discuss operational highlights. Thank you, Rich.

Zoran Milosevic, CEO, MeridianBet: MeridianBet delivered solid operational performance in Q2, with revenue growing 16% year over year to 29,200,000.0 US. Online revenue, which represents our strategic focus, increased 20%, demonstrating strong momentum in our core growth channels. Our casino vertical was the standout performer. GGR surged 29% with turnover reaching 434,000,000 US, up 30% year over year. We expanded our content library by 2,500 games, and the impact is clear.

Casino turnover per player jumped 50% quarter over quarter to nearly 4,000 US. This validates our content strategy and player engagement initiatives. The operational metrics remain strong. Active users expanded 15% year over year. New registrations climbed 124% driven primarily by our Brazil launch.

First deposits increased 165% quarter over quarter, showing quality acquisition. Sports revenue per player grew 28% despite challenging conditions. In Brazil, we are now fully operational and licensed through 2029. This is projected to be 5,600,000,000.0 market by 2025. Our experience in emerging markets across Africa and The Balkans give us playbook to capture share efficiently.

When it comes to sports betting margins, June was particularly tough month for all sports globally. When top soccer leagues finished in May, we were left with smaller leagues where favorites won more than usual. Players hit the parlays. For example, in June, our sports margin came in at 9.9% versus historical average of 13.3% as we had the convergence of major leagues endings and unusual pattern of favorites winning in remaining competitions. What is important is that we are positioned exceptionally well to offset this.

Our diversified model means casino growth offsets sports margin pressure, and we are not dependent on any single vertical or outcome. We continue investing in our technology platform. Sports Recommender version two is now live. Our new loyalty system connects all retail touch points, and we have enhanced our streaming capabilities. They are the latest evolution of our proprietary technology.

Turning to expand studios, where the story is one of the exceptional execution. Revenue jumped 652% year over year. We reached nearly 500,000 unique players, up 449%. This is our most profitable quarter to date. Key achievements include established 13 partnerships in US Social Casino segment positioning us for the next regulation wave, crossed 1,000 B2B partner milestone, giving us one of the widest distribution networks in the industry, secured certifications in Brazil, Peru, Croatia, and Romania, launched successful new title, Gates of Olympia.

The underlying metrics are equally strong. GGR surged 557%, and the game’s spins increased 273%. This shows real player engagements, not just distribution growth. The q two demonstrate exactly what we’ve built, a resilient, diversified business that performed through cycles. Sports margin will normalize as always do.

Meanwhile, our casino vertical is accelerating. Brazil is ramping and expense is hitting escape velocity. We operate with discipline, we invest with purpose, and we are building for the long term. The fundamentals are strong and getting stronger. Thank you.

Back to you, Rich.

Rich Christensen, CFO, Golden Matrix Group: Thanks, Doran. As we look at our performance so far during 2025 and the impact of customer friendly outcomes experienced in the second quarter, we are reducing our full year revenue to between $185,000,000 and $188,000,000 representing a 22% to 24% growth rate over 2024. We have seen July revenue growth from our European business recover as expected, up both sequentially and over 2024 by roughly 25% in constant currency terms. This is a return to our expected trends and consistent with our transactional volumes. We remain focused on expanding our presence in regulated markets, enhancing our proprietary technology stack and driving shareholder value through disciplined capital allocation.

We are well positioned to build on our success with a strong balance sheet and significant opportunities across both existing and new markets. In closing, I wanna thank our global teams for their continued dedication and execution. We look forward to updating you on our progress in the quarters ahead. With that, I’ll turn over the call to Brian to wrap things up.

Brian Goodman, CEO, Golden Matrix Group: Thank you, Rich, and thank you, Zorin. Goldman Sachs is entering the next phase of its evolution as a leading force in the global iGaming market. The underlying businesses are healthy and robust. Leveraging our consistent performance, operational strength, innovative platforms and expanding international footprint, we are well positioned to drive the company’s continued growth. Today’s results underscore our financial resilience, consistency and ability to deliver scalable, sustainable growth.

With a focus on long term success, we remain committed to profitable expansion while maintaining operational excellence. Looking ahead, we are excited about the opportunities in front of us and we will continue to drive shareholder value through technology, leadership, strategic market expansion and superior execution. Thank you again for your continued support, and we look forward to an exciting year

Moderator/Operator, Golden Matrix Group: at

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