Golden Matrix Group (GMGI) is an established B2B and B2C gaming technology company that has been making waves in the rapidly evolving online gaming industry. With a strong presence across various international markets and a diverse portfolio of offerings, Golden Matrix has positioned itself as a formidable player, capable of delivering consistent financial performance and driving long-term shareholder value.
Chronicling the Company's Journey
Golden Matrix Group was founded in 2016 with the goal of developing and licensing innovative online gaming platforms, systems, and content. The company's early years were marked by strategic acquisitions and partnerships that laid the foundation for its current success. In January 2021, Golden Matrix acquired a 100% stake in Global Technology Group Pty Ltd (GTG), an Australian company that provides mobile and desktop casino gaming solutions. Later that year, in November 2021, the company acquired an 80% stake in RKingsCompetitions Ltd., a Northern Ireland-based company that operates prize competition platforms. Golden Matrix later acquired the remaining 20% stake in RKingsCompetitions in November 2022.
The company's expansion continued with the acquisition of a 99.99% stake in Golden Matrix MX, S.A. DE C.V., marking its entry into the growing Mexican online casino market. In 2022, Golden Matrix acquired 100% of GMG Assets Limited, a Northern Ireland-based company that facilitates its RKings business. This was followed by the acquisition of 100% of Golden Matrix IOM Limited, based in the Isle of Man, in November 2023.
The transformative event, however, occurred in 2024 when Golden Matrix completed the acquisition of the MeridianBet Group, a well-established sports betting and online casino operator. This strategic move not only strengthened Golden Matrix's position in the global gaming market but also added significant synergies and cross-selling opportunities to the combined entity.
Operational Highlights and Financial Performance
Golden Matrix's financial performance has been nothing short of impressive. In the latest reported quarter, the company achieved an 85% year-over-year surge in consolidated revenues, reaching $41 million. This robust growth was driven by strong contributions across the company's key business segments, including RKings Competitions, GMAG (the B2B aggregator platform), and the newly acquired Classics for a Cause division.
The company's adjusted EBITDA for the third quarter stood at $4.3 million, demonstrating its ability to generate profitable growth. Golden Matrix has also maintained a healthy balance sheet, reporting over $38.4 million in cash and equivalents as of September 30, 2024, with short-term debt of only $17.5 million.
Divisional Performance Highlights
RKings Competitions, the UK-based tournament platform, experienced a brief challenge in one of its customer acquisition channels, which marginally impacted its performance in the third quarter. However, the company has now overcome this hurdle, and RKings is already seeing an exceptionally strong recovery, with revenue in October up 11.1% compared to September. The division is expected to regain its record-setting accomplishments and continue to make a substantial contribution to the group's overall profitability.
GMAG, the company's B2B aggregator platform, has continued to deliver impressive results, with a focus on increasing gross margins by diversifying its game portfolio and introducing popular high-margin games. The addition of high-demand Crash games and improvements in AI-driven customer retention strategies have resulted in a substantial increase in wagering volume and active player numbers on the GMAG platform.
The recently acquired Classics for a Cause division, a unique offering in the Australian market, has already made significant contributions to Golden Matrix's overall business, generating $2.1 million in revenues and $503,000 in EBITDA in the two months since the acquisition.
Mixed Play, Golden Matrix's Mexican online casino, has also scaled significantly, with a 56% increase in active players and a 25% jump in cash deposits during the third quarter compared to the previous quarter.
Merdianbet's Standout Performance
Zoran Milošević, CEO of Merdianbet, a subsidiary of Golden Matrix, also shared impressive results for the third quarter. Merdianbet's total revenue increased by 16% compared to the same period last year, driven by a 19% increase in the online segment and a 6% growth in the retail segment. The company also achieved a notable 13% increase in total deposits, reaching $61.9 million, and a 23% year-over-year growth in new online registrations.
Merdianbet's online casino performance was particularly strong, with the gross gaming revenue margin rising to 3.37%, the highest level since the second quarter of 2023. Quarterly turnover reached $356.4 million, marking a robust 21% year-over-year increase, fueled by the addition of over 1,500 new games, including the popular Superheli title developed by the company's in-house Expanse Studio.
In the sports betting vertical, Merdianbet saw a 7.4% increase in revenue year-over-year, despite some challenging outcomes in July and September. The company's online sports GGR margin improved to 9.5%, up from 8.1% in the third quarter of 2023, supported by targeted marketing campaigns during the Europe 2024 and Olympic events.
Merdianbet's retail casino performance also stood out, with slot machine revenue increasing by 17.5% year-over-year in the third quarter, driven by the addition of 120 new machines.
Innovative Technology Advancements
Golden Matrix and its subsidiaries have also been at the forefront of technological innovation, with the introduction of two AI-powered tools that are reshaping user engagement and experiences. The AI Casino Recommender, which leverages player behavior and preferences to deliver personalized game recommendations, has resulted in a over 10% increase in engagement with recommended games and a 9% boost in interactions with new game titles.
Additionally, the AI Bet Recommender, designed for real-time sports betting, analyzes extensive sports data to provide tailored bet suggestions to individual players, improving user segmentation, engagement, retention, and overall experience.
Financials
Golden Matrix's financial performance has been impressive, with a significant increase in consolidated revenues and a strong adjusted EBITDA. The company's balance sheet remains healthy, with substantial cash reserves and manageable short-term debt.
For the most recent fiscal year (as of October 31, 2023), Golden Matrix reported revenue of $44.17 million, a net loss of $1.17 million, operating cash flow of $2.21 million, and free cash flow of $2.14 million. In the most recent quarter (Q3 2024), the company achieved revenue of $41 million, representing an 85% year-over-year growth. Net income for the quarter was $15,630, with operating cash flow of $321,510 and free cash flow of $321,500.
The company operates in two main business segments: B2B and B2C. In the B2B segment, which contributed 11% of total revenue in the quarter ended June 30, 2024, GMGI charges gaming operators for the use of its unique intellectual property and technology systems, and earns royalties on third-party gaming content. The B2C segment, accounting for 89% of total revenue, includes retail and online betting and casino operations, prize competition ticket sales, and revenues from bars.
Golden Matrix's operations span various geographical regions, including Europe, Central and South America, Africa, Asia Pacific, and the UK. The B2C segment generates the majority of the company's revenue, with the UK and Europe (excluding UK) being the largest contributors.
Liquidity
The company's liquidity position is strong, with $32.83 million in cash as of June 30, 2024. Golden Matrix has a $21.6 million credit facility with Unicredit Bank Serbia, entered into on May 16, 2024. The company's current ratio stands at 7.10, and its quick ratio is 6.68, indicating a strong ability to meet short-term obligations. The debt-to-equity ratio is low at 0.005779 as of October 31, 2023, suggesting a conservative capital structure.
Outlook and Growth Strategy
Looking ahead, Golden Matrix remains laser-focused on implementing cost efficiencies and cost rationalization across the company, primarily through reducing overall costs, identifying product and distribution synergies, and optimizing operations globally. The company has started the fourth quarter strongly and is on track to set new records, with a clear strategy, a strong balance sheet, and a world-class team driving its expansion.
Golden Matrix's growth strategy includes continued investment in its people, technology, and products, coupled with a focus on organic revenue growth, geographic expansion, and selective acquisitions. The company's recent acquisition of Classics for a Cause in Australia has already contributed significantly to its overall business, and the company remains confident in its ability to identify and integrate complementary businesses that will further strengthen its market position.
The online gaming industry where GMGI operates is characterized by rapid technological advances, evolving standards, and frequent new product introductions and enhancements. To remain competitive, the company is focused on continuously modifying and enhancing its technology platform and service offerings. This includes investments in new technologies, such as the integration of advanced machine learning into its sports betting platform to personalize the betting experience and reduce the need for manual oversight.
While the company has not provided specific numerical guidance for the future, management has expressed a bullish outlook for strong ongoing growth and sustainable results. Golden Matrix started Q4 2024 strongly and expects to set new records, supported by its clear strategy, strong balance sheet, and world-class team.
Conclusion
Golden Matrix Group's impressive third-quarter results and continued operational progress demonstrate the company's ability to execute its growth strategy and capitalize on the dynamic global gaming market. With a diverse portfolio of offerings, a strong balance sheet, and a commitment to innovation, Golden Matrix is well-positioned to sustain its momentum and deliver long-term value to its shareholders. Throughout its history, the company has faced various challenges, including intensifying competition in the online gaming industry, evolving regulatory environments in its global markets, and the need to continuously innovate and enhance its technology platforms. However, Golden Matrix has successfully navigated these challenges through strategic acquisitions, diversification of its product portfolio, and a focus on delivering high-quality gaming experiences to its customers worldwide.
The company's performance across its various segments, including the strong showing of Merdianbet and the successful integration of Classics for a Cause, underscores its ability to execute on its growth strategies. With the online gaming industry experiencing robust growth, driven by the shift towards mobile and online platforms, Golden Matrix is well-positioned to capitalize on this trend through its diversified product offerings, proprietary technology, and strategic acquisitions. As the company continues to invest in cutting-edge technologies like AI-powered tools and expands its geographical footprint, it is poised for sustained growth and success in the evolving global gaming landscape.