- Gaming operator Golden Matrix Group, Inc. (NASDAQ: GMGI) reported a 75% surge in second quarter sales on strength across divisions
- First quarterly result after April purchase of MeridianBet Group for $300 million
- Golden Matrix continues to be profitable with cash on hand doubling to $40 million from $20 million at year end 2023
- Tracking to target of $76 million of Ebitda expected in 2025
- Second quarter boosted by 43% revenue growth in R Kings, a tournament platform
- MeridianBet division’s sale rose 11.4% in strength across online and retail
- B2B platform GMAG saw second quarter wagering rise 124% to $1.2 billion, boosted by in-house production group Expanse Studios
- Secured license for Bulgarian market and pursuing Brazil, Croatia, Romania, U.S. via New Jersey
- Financed conservatively with just 1.6x leverage
- Implementing AI to introduce players to games they’re likely to play, already driving results
- Combined company has enterprise value of $340 million or 4.5x 2025 Ebitda, well below multiples for DraftKings Inc. and Caesars Entertainment Inc.
Just a few months after closing a deal to buy MeridianBet Group, global gaming powerhouse Golden Matrix Group, Inc. reported a 75% surge in second-quarter revenue, clearing the way for long-term growth.
Golden Matrix offers iGames, tournaments and sports betting while also selling technology to other operators in more than 15 markets from Serbia to Mexico. The company is poised to benefit from a boom in online gambling around the world, fueled by the ubiquity of smartphones and more-relaxed regulations, giving bettors 24/7 access to a wide array of sports and casino-style games.
Indeed, global online gambling revenues are expected to rise to $184 billion in 2032 from $64 billion in 2022, according to Emergen Research. But while most casino and gaming stocks are focused on one or two (often highly competitive) countries, shares of Golden Matrix provide investors a unique way to profit from footholds in an array of jurisdictions where the company has both expertise and leading market share.
The second quarter results reflect both a seamless integration of MeridianBet and growth in every business unit. The company’s tournament platform, R Kings Competitions, posted another record second quarter with revenues of over $9.6 million, an increase of over 43%. The platform boasts 386,000 players, with 53,000 added so far in 2024 at a low acquisition cost of $7.60 per player.
The company’s GMAG platform, which offers B2B technology and software for partner operators, saw second quarter wagering rise 124% to $1.2 billion, boosted by in-house game production group Expanse Studios. GMAG commands an audience of more-than two million active players it the GMAG system, and continues to add operator partners.
A standout game was “Super Heli” from Expanse Studios, which ranked second in the player engagement among a library of 6,500 games from various providers. “Super Heli” is a so-called crash game where players can place three distinct bets within one round (visit here to try the game).
The newly-acquired MeridianBet division reported an 11.4% rise in revenue, led by strength across online and retail. Total deposits amounted to $59.2 million, reflecting 16% growth. The number of new online registration also increased to 136,000, marking a 17% year-over-year growth.
The company continues to expand its global footprint, creating revenue opportunities and further diversification. It’s poised to enter Brazil, a market projected at approximately $20 billion with a potential player base of 106 million by 2025.
In Europe, the company has been awarded a license in Bulgaria and aims to secure similar licenses in Croatia and Romania. It’s also seeking entry to the U.S. with an application for a New Jersey casino service industry enterprise license.
Tech investments are also paying off handsomely. The company has developed an AI-powered casino game recommender that introduces players to games (think of a TikTok-like algorithm that shows you the content you’re likely to enjoy).
It’s already proving itself a success in just one month – with metrics to back it up. The company says the recommender has driven a 3% increase in engagement with recommended games and a 9% boost in engagement with new games introduced by the AI.
The company’s financial position is also rock solid. Golden Matrix’s cash on hand has doubled to $40 million from $20 million at the end of the year, and its leverage is a conservative 1.6 times. That gives the company an arsenal of both stock and cash to fund acquisitions around the world.
“We will continue to take a disciplined approach towards M&A as we have done to date, only planning to deploy capital towards profitable, cash positive and robust businesses,” Golden Matrix CEO Brian Goodman said on last week’s investor call.
The company expects a healthy $76 million in Ebitda next year, indicating a valuation multiple of just 4.5 times. That’s sharply lower than DraftKings Inc. at 17 times and Caesars Entertainment Inc. at 7.9 times, according to Bloomberg.
With a seamless acquisition, organic growth and firepower for more deals, Golden Matrix’s hot streak should continue for years to come.
Contact:
X/Twitter: @IPOEdge
Instagram: @IPOEdge
