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, NV, November 12, 2024 – 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 $105.3million, 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, highlighted the company's strategic advancements, emphasizing the integration of key acquisitions and the enhancement of their operations with their launch of Meridianbet’s 5
th generation platform resulting in what they consider to be the world's most advanced iGaming technology. He mentioned a commitment to maximizing cost efficiencies and leveraging synergies across their global operations to drive sustainable growth and profits. As Golden Matrix enters the fourth quarter, they are focused on operational efficiency and profitability, positioning themselves for a record performance in 2024.
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 at https://goldenmatrix.com/events-presentations/.
For more information, please visit our website at goldenmatrix.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.
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; 122,708,617 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 (loss) 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 gain (loss)
(219,060
)
366,183
(337,581
)
320,852
Other income
495,654
219,145
1,498,563
725,372
Total other income (expense)
(455,124
)
607,086
496,957
1,049,826
Net income (loss) 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 (loss)
$
(3,295,629
)
$
3,520,060
$
(669,019
)
$
11,886,052
Less: Net income attributable to noncontrolling interest
109,935
41,771
18,924
171,159
Net income (loss) 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 earnings (losses) 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 (loss)
$
(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 (loss)
(1,477,371
)
2,027,438
381,334
10,569,205
Less: Net income attributable to noncontrolling interest
109,935
41,771
18,924
171,159
Comprehensive income (loss) attributable to GMGI
$
(1,587,306
)
$
1,985,667
$
362,410
$
10,398,046
Reconciliation of EBITDA and Adjusted EBITDA to Net income (loss):
Three Months Period Ended
Nine Months Period Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Net income (loss)
$
(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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