Golden Matrix Group Inc. Reports Strong Q3 2024 Earnings and Continued Operational Growth
Year-to-Date Revenue up 55% to $105.3 Million
Company’s Classics for a Cause Acquisition Successfully Integrated
LAS VEGAS, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Golden Matrix Group Inc. (NASDAQ: GMGI) (“Golden Matrix” or the “Company”), a global developer, licensor, and operator of online gaming platforms, today announced strong financial and operational results for the third quarter ended September 30, 2024. The results reflect the Company’s robust growth strategy and expansion efforts across key markets, including the successful acquisition and integration of Classics for a Cause.
Brian Goodman, CEO of Golden Matrix, commented, “ Golden Matrix’s Q3 performance demonstrates our commitment and success in building sustainable, long-term growth and strengthening our industry position. Once again, we have delivered strong results across our divisions, supported by strategic acquisitions, platform upgrades, and the expansion of our iGaming portfolio.”
Financial Highlights
- Revenue Growth: Q3 2024 consolidated revenue increased by 85% to $41 million, with year-to-date revenue up 55% to $105.3 million, driven by consistent performance across key markets.
- Gross Profit Increase: Gross profit grew 39% in Q3 to $22.4 million, with year-to-date gross profit rising 24% to $61.8 million, reflecting improvements in operational efficiency and product margins.
- AEBITDA: Adjusted EBITDA for Q3 reached $4.3 million, reflecting resilient performance across multiple revenue channels with marginal impacts from currency fluctuations across subsidiaries.
- Balance Sheet Strength: As of September 30, 2024, Golden Matrix maintained a robust financial position with over $38.4 million in cash and equivalents and short-term debt of $17.5 million. Shareholder equity also grew 60% to $94 million, reinforcing the Company’s ability to pursue strategic growth initiatives.
Operational Highlights
Golden Matrix achieved significant milestones during Q3 2024, including:
- Meridianbet Strong Growth Continues: Meridianbet’s Q3 revenue grew 16% YoY, led by a 19% online increase and 6% in retail. Deposits rose to $61.9M (+13% QoQ), with new registrations up 23% to 125K. Online casino GGR margin hit 3.37% (+21% turnover), sports betting rose 7.4% YoY with GGR at 9.5%, retail sports GGR at 10.3% (record 14.1% in August), and retail slots up 17.5% YoY.
- Expansion of GMAG Platform: The GMAG B2B aggregator platform saw substantial growth, with wagering volume increasing 84% to $1.4 billion. Enhanced customer retention tools and the addition of high-margin games have driven engagement and profitability.
- Classics for a Cause Acquisition: This newly acquired Australian business added $2.1 million in revenue and $503,000 in EBITDA within two months, expanding Golden Matrix’s market reach and contributing to overall profitability.
- Mexplay Growth: Mexplay, the Company’s online casino in Mexico, reported a 56% increase in active players and a rise in gross gaming revenue to $15 million, underscoring growth potential in Latin America.
Zoran Milosevic, CEO of Meridianbet, also commented: “We achieved some remarkable milestones, with our strategic acquisitions now fully integrated and our ground-breaking 5th generation platform setting a new benchmark in the global betting and iGaming industry. Our global operations are delivering exceptional synergies and efficiencies, setting us up for unprecedented growth. All indicators point to FY2024 being a landmark year for performance."
For additional information on Golden Matrix’s financial performance, please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which has been filed with the SEC today and is available at https://www.nasdaq.com/market-activity/stocks/gmgi/sec-filings or www.sec.gov.
* Adjusted EBITDA is a non-GAAP financial measure. See also “Non-GAAP Financial Measures” and “Reconciliation of Net Income to Adjusted Earnings excluding Interest Expense, Interest Income, Tax, Depreciation Expense, Amortization Expense, Stock-based Compensation Expense and Restructuring Costs", included in the tables at the end of this release.
In terms of GAAP accounting and Meridianbet being the accounting acquirer, the comparisons presented are correctly stated and are reflective of our new structure. Comparisons presented in terms of GAAP are the consolidated Company’s results against Meridianbet Group historical results and not against Golden Matrix Group's historical results.
The full visual presentation and the earnings call can be accessed at 8am ET on the Golden Matrix Group website athttps://goldenmatrix.com/events-presentations/.
For more information, please visit our website atgoldenmatrix.com.
About Golden Matrix
Golden Matrix Group, based in Las Vegas NV, is an established B2B and B2C gaming technology company operating across multiple international markets. The B2B division of Golden Matrix develops and licenses proprietary gaming platforms for its extensive list of clients and RKings, its B2C division, operates a high-volume eCommerce site enabling end users to enter paid-for competitions on its proprietary platform in authorized markets. The Company also owns and operates MEXPLAY, a regulated online casino in Mexico.
Meridianbet Group, founded in 2001 and acquired by Golden Matrix in 2024, is a well-established online sports betting and gaming group, licensed and currently operating in 15 jurisdictions across Europe, Africa and South America. Meridianbet Group’s successful business model utilizes proprietary technology and scalable systems, thus allowing it to operate in multiple countries and currencies and with an omni-channel approach to markets, including retail, desktop online and mobile.
The companies’ sophisticated software automatically declines any gaming or redemption requests from within the United States, in strict compliance with current US law.
Non-GAAP Financial Measures
Adjusted EBITDA or AEBITDA, is a “non-GAAP financial measures” presented as a supplemental measure of the Company’s performance. Adjusted EBITDA, Net Debt and Net Debt Leverage are not presented in accordance with accounting principles generally accepted in the United States, or GAAP. Adjusted EBITDA represents net income before interest expense, interest income, taxes, depreciation and amortization, and also excludes stock-based compensation expense and restructuring costs. Net Debt is defined as total debt less cash and cash equivalents. Net Debt Leverage Ratio is defined as net debt as of the balance sheet date divided by annualized adjusted EBITDA for the quarter then ended. We believe that using Net Debt and Net Debt Leverage Ratio is useful to investors in determining our leverage ratio since we could choose to use cash and cash equivalents to retire debt. Adjusted EBITDA is presented because we believe it provides additional useful information to investors due to the various noncash items during the period. Adjusted EBITDA, Net Debt and Net Debt Leverage are not recognized in accordance with GAAP, are unaudited, and have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. Some of these limitations are: Adjusted EBITDA, Net Debt and Net Debt Leverage do not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments; Adjusted EBITDA, Net Debt and Net Debt Leverage do not reflect changes in, or cash requirements for, working capital needs; Adjusted EBITDA, Net Debt and Net Debt Leverage do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments; although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA, Net Debt and Net Debt Leverage do not reflect any cash requirements for such replacements; and other companies in this industry may calculate Adjusted EBITDA, Net Debt and Net Debt Leverage differently than the Company does, limiting their usefulness as a comparative measure. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. For more information on these non-GAAP financial measures, please see the section titled “Reconciliation of Net Income to Adjusted Earnings excluding Interest Expense, Interest Income, Depreciation Expense, Amortization Expense, Stock-based Compensation Expense and Restructuring Costs” and “Reconciliation of Net Debt and Leverage Calculation”, included at the end of this release.
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release contain forward-looking information within the meaning of applicable securities laws, including within the meaning of the Private Securities Litigation Reform Act of 1995 (“forward-looking statements”). Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.
Important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, the amount, timing, and sources of funding for the Company’s repurchase program, the fact that common share repurchases may not be conducted in the timeframe or in the manner the Company expects, or at all, the ability of the Company to obtain the funding required to pay certain Meridianbet Group acquisition post-closing obligations, the terms of such funding, potential dilution caused thereby and/or covenants agreed to in connection therewith; potential lawsuits regarding the acquisition; dilution caused by the terms of an outstanding convertible note and warrants, the Company’s ability to pay amounts due under the convertible note and covenants associated therewith and penalties which could be due under the convertible note and securities purchase agreement related thereto for failure to comply with the terms thereof; the business, economic and political conditions in the markets in which the Company operates; the effect on the Company and its operations of the ongoing Ukraine/Russia conflict and the conflict in Israel, changing interest rates and inflation, and risks of recessions; the need for additional financing, the terms of such financing and the availability of such financing; the ability of the Company and/or its subsidiaries to obtain additional gaming licenses; the ability of the Company to manage growth; the Company’s ability to complete acquisitions and the availability of funding for such acquisitions; disruptions caused by acquisitions; dilution caused by fund raising, the conversion of outstanding preferred stock, convertible securities and/or acquisitions; the Company’s ability to maintain the listing of its common stock on the Nasdaq Capital Market; the Company’s expectations for future growth, revenues, and profitability; the Company’s expectations regarding future plans and timing thereof; the Company’s reliance on its management; the fact that the sellers of the Meridianbet Group hold voting control over the Company; related party relationships; the potential effect of economic downturns, recessions, increases in interest rates and inflation, and market conditions, decreases in discretionary spending and therefore demand for our products and services, and increases in the cost of capital, related thereto, among other affects thereof, on the Company’s operations and prospects; the Company’s ability to protect proprietary information; the ability of the Company to compete in its market; the effect of current and future regulation, the Company’s ability to comply with regulations and potential penalties in the event it fails to comply with such regulations and changes in the enforcement and interpretation of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our business; the risks associated with gaming fraud, user cheating and cyber-attacks; risks associated with systems failures and failures of technology and infrastructure on which the Company’s programs rely; foreign exchange and currency risks; the outcome of contingencies, including legal proceedings in the normal course of business; the ability to compete against existing and new competitors; the ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; and general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products, including potential recessions and global economic slowdowns. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this press release are reasonable, we provide no assurance that these plans, intentions or expectations will be achieved.
Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly-filed reports, including, but not limited to, under the “Special Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC, including the Form 10-Qs and Form 10-Ks, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended October 31, 2023 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and future periodic reports on Form 10-K and Form 10‑Q. These reports are available at www.sec.gov.
The Company cautions that the foregoing list of important factors is not complete, and does not undertake to update any forward-looking statements except as required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this press release are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that is not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
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| Golden Matrix Group, Inc. and Subsidiaries | |||||||
| Consolidated Balance Sheets | |||||||
| As of | As of | ||||||
| 30-Sep-24 | 31-Dec-23 | ||||||
| (Unaudited) | (Audited) | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 38,404,951 | $ | 20,405,296 | |||
| Accounts receivable, net | 8,496,716 | 2,674,967 | |||||
| Accounts receivable – related parties | 663,636 | 399,580 | |||||
| Taxes receivable | 301,349 | 997,778 | |||||
| Inventory | 4,414,399 | 133,905 | |||||
| Prepaid expenses | 1,374,534 | 328,400 | |||||
| Other current assets | 3,013,530 | 1,989,476 | |||||
| Total current assets | 56,669,115 | 26,929,402 | |||||
| Non-current assets: | |||||||
| Goodwill & intangible assets, net | 117,351,145 | 15,107,422 | |||||
| Property, plant & equipment, net | 29,180,941 | 27,826,594 | |||||
| Investments | 240,152 | 237,828 | |||||
| Deposits | 5,997,157 | 5,586,495 | |||||
| Operating lease right-of-use assets | 4,036,771 | 4,147,375 | |||||
| Other non-current assets | 16,484 | 17,864 | |||||
| Total non-current assets | 156,822,650 | 52,923,578 | |||||
| Total assets | $ | 213,491,765 | $ | 79,852,980 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 12,252,903 | $ | 8,751,562 | |||
| Accounts payable - related parties | 21,555 | 12,605 | |||||
| Current portion of operating lease liability | 1,427,983 | 2,299,317 | |||||
| Current portion of long-term loan | 17,491,098 | - | |||||
| Taxes payable | 3,310,929 | 6,137,513 | |||||
| Other current liabilities | 1,164,523 | 581,644 | |||||
| Deferred revenues | 1,251,287 | - | |||||
| Contingent liability | 2,139,122 | - | |||||
| Current portion of consideration payable | 30,331,867 | - | |||||
| Total current liabilities | 69,391,267 | 17,782,641 | |||||
| Non-current liabilities: | |||||||
| Non-current portion of operating lease liability | 2,603,992 | 1,795,870 | |||||
| Non-current portion of long-term loan | 16,167,631 | - | |||||
| Other non-current liabilities | 134,176 | 287,920 | |||||
| Non-current portion of consideration payable - Meridian acquisition | 25,000,000 | - | |||||
| Convertible note | 1,606,882 | - | |||||
| Total non-current liabilities | 45,512,681 | 2,083,790 | |||||
| Total liabilities | $ | 114,903,948 | $ | 19,866,431 | |||
| Shareholders’ equity: | |||||||
| Preferred stock: $0.00001 par value; 20,000,000 shares authorized | - | - | |||||
| Preferred stock, Series B: $0.00001 par value, 1,000 shares designated, 1,000 and 0 shares issued and outstanding, respectively | - | - | |||||
| Preferred stock, Series C: $0.00001 par value, 1,000 shares designated, 1,000 and 1,000 shares issued and outstanding, respectively | - | - | |||||
| Common stock: $0.00001 par value; 300,000,000 shares authorized; 120,801,977 and 83,475,190 shares issued and outstanding, respectively | $ | 1,227 | $ | 835 | |||
| Stock payable | 120,000 | - | |||||
| Stock payable - related party | 120,664 | - | |||||
| Additional paid-in capital | 38,431,527 | 3,044,894 | |||||
| Treasury stock, at cost (September 2024 – 700 shares) | (1,671 | ) | - | ||||
| Accumulated other comprehensive income (loss) | (3,595,263 | ) | (3,307,578 | ) | |||
| Accumulated earnings | 59,177,236 | 59,296,675 | |||||
| Total shareholders’ equity of GMGI | 94,253,720 | 59,034,826 | |||||
| Noncontrolling interests | 4,334,097 | 951,723 | |||||
| Total equity | 98,587,817 | 59,986,549 | |||||
| Total liabilities and equity | $ | 213,491,765 | $ | 79,852,980 | |||
| Golden Matrix Group, Inc and Subsidiaries | |||||||||||||
| Consolidated Statements of Operations and Comprehensive Income | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Revenues | $ | 40,992,329 | $ | 22,209,657 | $ | 105,258,158 | $ | 67,724,779 | |||||
| Cost of goods sold | (18,589,162 | ) | (6,116,688 | ) | (43,477,519 | ) | (17,943,260 | ) | |||||
| Gross profit | 22,403,167 | 16,092,969 | 61,780,639 | 49,781,519 | |||||||||
| Operating expenses | |||||||||||||
| Selling, general and administrative expenses | 23,379,550 | 12,863,262 | 58,937,789 | 37,797,023 | |||||||||
| Income from operations | (976,383 | ) | 3,229,707 | 2,842,850 | 11,984,496 | ||||||||
| Other income (expense): | |||||||||||||
| Interest expense | (790,193 | ) | (4,049 | ) | (827,048 | ) | (31,930 | ) | |||||
| Interest earned | 58,475 | 25,807 | 163,023 | 35,532 | |||||||||
| Foreign exchange loss | (219,060 | ) | 366,183 | (337,581 | ) | 320,852 | |||||||
| Other income | 495,654 | 219,145 | 1,498,563 | 725,372 | |||||||||
| Total other income | (455,124 | ) | 607,086 | 496,957 | 1,049,826 | ||||||||
| Net income before tax | (1,431,507 | ) | 3,836,793 | 3,339,807 | 13,034,322 | ||||||||
| Provision for income taxes | 1,864,122 | 316,733 | 2,670,788 | 1,148,270 | |||||||||
| Net income | $ | (3,295,629 | ) | $ | 3,520,060 | $ | 669,019 | $ | 11,886,052 | ||||
| Less: Net income (loss) attributable to noncontrolling interest | 109,935 | 41,771 | 18,924 | 171,159 | |||||||||
| Net income attributable to GMGI | $ | (3,405,564 | ) | $ | 3,478,289 | $ | 650,095 | $ | 11,714,893 | ||||
| Weighted average ordinary shares outstanding: | |||||||||||||
| Basic | 121,510,697 | 83,475,190 | 108,570,269 | 83,475,190 | |||||||||
| Diluted | 121,510,697 | 83,475,190 | 115,016,974 | 83,475,190 | |||||||||
| Net income per ordinary share attributable to GMGI: | |||||||||||||
| Basic | $ | (0.03 | ) | $ | 0.04 | $ | 0.01 | $ | 0.14 | ||||
| Diluted | $ | (0.03 | ) | $ | 0.04 | $ | 0.01 | $ | 0.14 | ||||
| Net income | (3,295,629 | ) | 3,520,060 | 669,019 | 11,886,052 | ||||||||
| Foreign currency translation adjustments | 1,818,258 | (1,492,622 | ) | (287,685 | ) | (1,316,847 | ) | ||||||
| Comprehensive income | (1,477,371 | ) | 2,027,438 | 381,334 | 10,569,205 | ||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 109,935 | 41,771 | 18,924 | 171,159 | |||||||||
| Comprehensive income attributable to GMGI | (1,587,306 | ) | 1,985,667 | 362,410 | 10,398,046 | ||||||||
| Reconciliation of Net Income to Adjusted Earnings excluding Interest Expense, Interest Income, Tax, Depreciation Expense, Amortization Expense, Stock-based Compensation Expense, and Restructuring Costs. | ||||||||||||
| Three Months Period Ended | Nine Months Period Ended | |||||||||||
| 30-Sep-24 | 30-Sep-23 | 30-Sep-24 | 30-Sep-23 | |||||||||
| Net income | $ | (3,295,629 | ) | $ | 3,520,060 | $ | 669,019 | $ | 11,886,052 | |||
| + Interest expense | 790,193 | 4,049 | 827,048 | 31,930 | ||||||||
| - Interest income | (58,475 | ) | (25,807 | ) | (163,023 | ) | (35,532 | ) | ||||
| + Taxes | 1,864,122 | 316,733 | 2,670,788 | 1,148,270 | ||||||||
| + Depreciation | 1,145,210 | 878,516 | 3,173,473 | 2,670,258 | ||||||||
| + Amortization | 1,962,157 | 473,047 | 4,317,523 | 1,357,453 | ||||||||
| EBITDA | $ | 2,407,578 | $ | 5,166,598 | $ | 11,494,828 | $ | 17,058,431 | ||||
| + Stock-based compensation | 1,614,751 | - | 3,252,803 | - | ||||||||
| + Restructuring costs | 314,555 | 112,488 | 906,286 | 313,699 | ||||||||
| Adjusted EBITDA | $ | 4,336,884 | $ | 5,279,086 | $ | 15,653,917 | $ | 17,372,130 | ||||
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