Golden Matrix Group Inc (GMGI) 2025 Q1 法說會逐字稿

Good morning everyone and welcome to Golden Matrix Group's first quarter 2025 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.

Thank you and good morning everyone. Welcome to Golden Matrix Group's Q1 2025 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; 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're subject to risks and certainties 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 to call to Brian Goodman, CEO of Golden Matrix Group.

Good morning, everyone, and thank you for joining us to review Golden Matrix's first quarter 2025 results. We are proud to kick off the year with strong momentum fueled by platform innovations and continued expansion into high-growth regulated markets. The 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 roadmap 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 B2B technology solutions in dynamic B2C operations, positioning us at the forefront of the iGaming industry.

Our raffle business delivered record results in Q1, including all-time highs in revenue, ticket sales, and price values. We also added 26,000 new users during the quarter, a 146% increase compared to Q1 2024, highlighting the strength and momentum in this segment.

We have eliminated the Lind Partners' debt of approximately $9.6 million and completed the conversion of over $9.5 million 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.

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 2025.

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 2025 was $42.7 million, 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, we call 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 profits, gross profit reached $24.2 million in Q1 of 2025, reflecting a gross margin of approximately 57%. This was a decline of 14% points due to the aggregation of GMAG and the RKings and Classics for a Cause segments. Our prior year results include our Meridianbet segments at a gross margin of 71%. Meridianbet's gross margin improved to 72% in the first quarter of this year.

Our other two segments, GMAG and RKings 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 is optimized offering 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 $10.3 million to $24.3 million in the first quarter.

This included $4.6 million of acquired cost from GMAG and RKings, $1 million from the Classics for a Cause acquisition, and $1.4 million from amortization of intangibles related to those acquisitions.

The remaining $3.3 million 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, startup cost for a resilient 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 $0.00 per share. This was a decline of $4.2 million and $0.05 a share from last year. Net income declined due to an increase in amortization of $1.7 million. Interest expense of $1.5 million, and stock-based compensation of $1 million. Excluding these items, adjusted EBITDA declined $300,000 or 5% to $5.6 million. The additional operating expenses we incurred to accelerate growth offset the incremental gross profit generated in the first quarter.

Turning to liquidity. As of March 31, 2025, we had $29.7 million in cash and cash equivalents. Our net debt leverage ratio continues to improve and is now under 1.6 turns. Adjusting for the $9.5 million dollar debt conversion and the $9.6 million early debt repayment, our estimated net debt service ratio would fall just over 1.2 turns.

Now I'll hand it over to Zoran Milosevic, CEO of Meridianbet, to discuss operational highlights for Meridianbet.

Thank you, Rich. Meridianbet delivered strong operational performance in Q1, continuing to scale across regulated markets and deepening 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 users grew 7% while spending per player in both sports and casino continue 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 $5.6 billion in 2025 alone.

Our licensing is valid through 2029 and positions Meridianbet as a first mover in the high growth market entering a multi-year expansion phase with clear regulatory clarity. We launched B2B operations in Nigeria through a fully licensed local entity. With over 60 million betters and a 2 billion market, it's one of 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 mature jurisdictions where our infrastructure, brand, and scale are very deeply embedded.

We also continued our community investment. We delivered 56 community initiatives in Q1, 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.

Expanse Studios, our proprietary game development unit, also played a pivotal role in our content innovation and strategic reach. In the studio, we 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 in Q2, one 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're strengthening our [crash] 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, Q1 reflects the kind of execution we aim to sustain, strategic expansion, product ownership, and control access to e-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. Rich, back to you.

Thank you, Zoran. As we look at our performance in the first quarter of 2025 and continuing through April, we're excited about the growth opportunities for the year. We expect our full-year revenue to be between $190 million and $195 million representing a 26% to 29% growth rate over 2024.

We remain committed to discipline, capital allocation, and investments in 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.

Thank you, Rich, and thank you, Zoran. Golden 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.

This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful day.