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Golden Matrix Group, Inc. (GMGI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 9.6% year over year to $43.2M, while gross margin was ~56%; diluted EPS was -$0.03 as operating spend and interest from debt actions outweighed gross profit gains .
  • Management cut FY2025 revenue guidance to $185–$188M from $190–$195M, citing “customer‑friendly” sports outcomes in Europe; July revenue rebounded ~25% sequentially and vs. 2024 (constant FX) .
  • Meridianbet’s casino drove strength: GGR +29%, turnover $434M (+30% YoY), with online revenue +20%; user metrics were robust (active users +15% YoY, registrations +124%) .
  • Raffle segment hit records (RKings daily revenue records; >30,000 orders/day Aug 1) and remains a positive offset amid sports margin pressure .
  • Near-term stock catalysts: guidance reset and visibility on sports margin normalization; medium-term catalysts include Brazil ramp (license through 2029), platform (Atlas) efficiencies, and improving leverage (<1.5x net debt/EBITDA) .

What Went Well and What Went Wrong

  • What Went Well
    • Meridianbet casino outperformed: GGR +29%, turnover $434M (+30% YoY), online revenue +20%, validating content and engagement strategy; “Casino turnover per player jumped 50% QoQ” .
    • Strong user acquisition and engagement: active users +15% YoY, new registrations +124% (Brazil launch), first deposits +165% QoQ; sports revenue per player +28% despite margin headwinds .
    • Raffle businesses posted standout performance; CEO: “RKings… beat the all‑time daily revenue record by 12%… and on August 1… an additional 40%, with more than 30,000 orders in a single day” .
  • What Went Wrong
    • Sports betting margin compression from “customer‑friendly outcomes” in Europe; June sports margin 9.9% vs historical ~13.3% (favorites won more than usual), impacting revenue/mix .
    • Operating expenses rose $5.1M YoY (to $26.7M) including Brazil startup, higher marketing, regulatory cost increases in Serbia, and depreciation on Atlas; increased OpEx outpaced incremental gross profit by $2.4M in Q2 .
    • Interest expense spiked ($1.48M in Q2) from debt prepayment and discount amortization; net loss -$3.73M vs +$0.02M in Q2 2024, pressuring EPS and adjusted EBITDA (-37% YoY to $3.45M) .

Financial Results

Multi-period headline metrics (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$46.0 $42.723 $43.245
Gross Profit ($USD Millions)$27.0 $24.196 $24.377
Gross Margin %58.7% (calc from $27.0/$46.0) 57% 56%
Net Income ($USD Millions)$(2.079) $(0.258) $(3.732)
Diluted EPS ($)N/A$0.00 $(0.03)
EBITDA ($USD Millions)$3.807 $4.422 $2.033
Adjusted EBITDA ($USD Millions)$6.540 $5.612 $3.449
EBITDA Margin %8.3% (calc) 10.3% (calc) 4.7% (calc)
Adjusted EBITDA Margin %14.2% (calc) 13.1% (calc) 8.0% (calc)

Q2 year-over-year comparison

MetricQ2 2024Q2 2025YoY Change
Revenue ($USD Millions)$39.415 $43.245 +9.6%
Gross Profit ($USD Millions)$21.686 $24.377 +12.4%
Net Income ($USD Millions)$0.016 $(3.732) Declined
Diluted EPS ($)$0.00 $(0.03) Declined
Adjusted EBITDA ($USD Millions)$5.428 $3.449 -36.5%

Segment/product breakdown (Q2 2025 vs Q2 2024)

Revenue by Product ($USD)Q2 2024Q2 2025
Online Casino$9,833,025 $12,723,710
Online Sports Betting$8,985,332 $9,870,514
Retail Sports Betting & Retail Casino$5,656,849 $5,806,601
GMAG (B2B)$4,595,897 $3,630,068
RKings (UK)$9,656,962 $8,376,630
Classics for a Cause (AU)$0 $2,029,926
Meridianbet (disclosed sub-segment highlight)$25.17M est. (implied from totals; not disclosed)$29.2M (+16% YoY)

Key KPIs (Q2 2025 highlights)

KPIQ2 2025Context
Meridianbet casino GGR+29% YoY Turnover $434M (+30% YoY)
Online revenue (Meridianbet)+20% YoY Core growth channel
Active users+15% YoY (Meridianbet) Engagement rising
New registrations+124% YoY (driven by Brazil) Brazil license through 2029
First deposits+165% QoQ Quality acquisition
Sports revenue per player+28% Despite margin pressure
Sports margin (June)9.9% vs ~13.3% historical “Favorites” winning pattern
Raffle (RKings) daily revenue records+12% then +40% vs prior record; >30k orders/day (Aug 1) Momentum continues
Net debt leverage<1.5x (improving) Liquidity: $22.1M cash

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)FY 2025$190–$195M $185–$188M Lowered
July revenue trend (Europe)Jul 2025 run-rateN/A~25% up sequentially and vs. 2024 (constant currency) Recovery sign
Other metrics (margins, OpEx, tax, dividends)FY 2025Not providedNot providedN/A

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Technology platform (Atlas)Completed full transition; scalability and UX gains Economies of scale realized; efficiency gains Continued efficiencies; supports margin and scale Improving
AI initiativesAI casino recommender: +10% monthly engagement, +9% interactions Continued personalization push Sports Recommender v2 live; enhanced loyalty/streaming Improving
Brazil market/regulatoryExpansion priority (no license disclosed) Secured permanent online betting license through 2029 Fully operational; Brazil a ~$5.6B market; robust ramp Accelerating
Serbia regulatory/taxesBasis of business; growth Statutory wage/tax increases raised costs Additional gaming taxes reduced gross margin ~270 bps in segment Headwind persists
Product performance (casino)Online casino GGR +24% YoY; strong content Stable contribution Casino GGR +29%, turnover +30% YoY; per-player turnover +50% QoQ Improving
Raffle segmentRecord year; notable comps and prizes Record Q1 across revenue/tickets/prize values Daily revenue records, >30k orders/day Aug 1; July GP ~26% Strong
Leverage & liquidityNet debt leverage ~1.8x; $30M cash Net leverage <1.6x; $29.7M cash Net leverage <1.5x; $22.1M cash; debt repaid/converted Improving

Management Commentary

  • CEO Brian Goodman: “Our Second quarter was a challenging Quarter… due to customer‑friendly sports outcomes within our European business… Adjusting for this, we remain on track for our full‑year revenue guidance…” .
  • CFO Rich Christensen: “We remain focused on expanding our presence in regulated markets, enhancing our proprietary technology stack, and driving shareholder value through disciplined capital allocation” .
  • Meridianbet CEO Zoran Milošević: “Meridianbet delivered solid operational performance in Q2… Online revenue… increased 20%… Casino… GGR surged 29% with turnover reaching $434 million – up 30% year‑over‑year” .
  • CFO detail on costs: OpEx drivers included Brazil startup, marketing, Serbia regulatory increases, and Atlas depreciation; cost reductions will lower OpEx by ~$500K per quarter going forward .
  • Sports margin context: “June was particularly tough… favorites won more than usual… sports margin came in at 9.9% vs historical average of 13.3%” .

Q&A Highlights

  • The published Q2 transcript contains prepared remarks only; no separate Q&A section was provided. Guidance clarification was addressed in remarks: FY2025 revenue lowered to $185–$188M, with July European revenue up ~25% sequentially and vs. 2024 (constant currency), signaling normalization after anomalous outcomes .
  • Cost actions and leverage discussed: net debt leverage <1.5x; OpEx to reduce by ~$500K per quarter from identified efficiencies .

Estimates Context

  • Wall Street consensus (S&P Global) for GMGI was unavailable for Q2 2025 and FY 2025 during this review; therefore no beat/miss analysis vs. estimates is provided.
  • Implication: Sell-side models likely need to reflect lower FY revenue ($185–$188M) and Q2 margin outcomes; July rebound suggests limited need to cut outer‑quarter volumes where casino strength and Brazil ramp persist .

Key Takeaways for Investors

  • Guidance reset with quick post‑quarter recovery: FY2025 revenue trimmed to $185–$188M, but July revenue was ~25% higher sequentially and vs. 2024 in Europe (constant currency), supporting normalization narrative .
  • Mix resilience: Casino strength (GGR +29%, turnover +30% YoY) and robust user KPIs offset temporary sports margin volatility; diversified verticals (casino, raffle) reduce outcome risk .
  • Platform and AI investments are paying off: Atlas and recommender systems enhance scalability, UX, and personalization; expected to support margin and LTV over time .
  • Cost discipline and deleveraging: Net debt leverage improved to <1.5x; targeted OpEx cuts of ~$500K per quarter begin to take effect, aiding EBITDA trajectory into H2 .
  • Brazil is a multi‑year growth driver: fully operational with license through 2029; strong registration/deposit momentum positions Meridianbet for share gains in a ~$5.6B market .
  • Raffle momentum remains a differentiator: RKings delivered record days (>30k orders) and healthy July gross profit, offering a stable, high‑engagement B2C stream amid sports volatility .
  • Watch for sports margin normalization and regional tax/regulatory changes (Serbia); these remain key variables for quarterly earnings cadence .

Additional Notes

  • Other relevant Q2 press release: Meridianbet ESG initiatives (cleanup events; multi‑country projects) underscore brand and community engagement, supporting long‑term positioning .
  • Prior quarters for trend analysis: Q1 2025 revenue $42.7M, gross margin ~57%, adjusted EBITDA $5.6M; Q4 2024 revenue $46.0M, adjusted EBITDA $6.54M, with strong casino and raffle trends and Atlas/AI rollout benefits .