By M. Marin
NASDAQ:GMGI
READ THE FULL GMGI RESEARCH REPORT
Double digit organic revenue growth as growth initiatives contribute to strong momentum
Golden Matrix Group (NASDAQ:GMGI), an iGaming group providing a broad array of gaming products and software solutions on a B2B and B2C basis, reported 1Q25 results last week, registering year-over-year revenue growth of 72% to $42.7 million, despite a roughly 4% negative FX impact. Organic revenue growth was 10%, with 12% growth at the Meridianbet Group segment. The company’s raffle segment registered record revenue, ticket sales, and prize values, according to GMGI and the user base increased 146% year-over-year, as 26,000 new users registered in 1Q25.
The company is seeing stronger user engagement which it attributes largely to the benefits of its AI-driven technology and concurrently expanding its geographic reach as it attains new licenses in regulated markets in order to strengthen its global position in the iGaming space. Among the most significant are Brazil, which represents an estimated $5.6 billion gross gaming revenue market, Africa and Serbia, where GMGI renewed a 10-year online license. The company also expects to obtain an online license for Romania shortly and also indicated that it continues to achieve operating leverage and economies of scale, particularly as it has completely transitioned to its newest technology platform.
In terms of revenue breakdown by operating unit, Meridianbet is the company’s largest operating segment and an expected key engine for growth. It accounted for about 65% of total 1Q25 revenue. As GMGI had anticipated when it acquired Meridianbet in 2024, the acquisition is proving to be a transformative one. Meridianbet was founded in 2001. It operates in more than 15 jurisdictions across Europe, Africa and Central and South America. Meridianbet leverages its proprietary technology and scalable systems to operate in multiple countries and currencies with an omni-channel approach to markets. RKings and Classics for a Cause (CFAC) contributed about 26% of total revenue and GMAG accounted for another nearly 9%. The company believes its acquisitions of Meridianbet and Classics for a Cause expanded its revenue base and brand value.
Balance sheet; leverage at 2Q24 level & pro forma level even lower with recent debt reduction
Importantly, the company has strengthened its balance sheet by paying down debt. GMGI had issued Lind Global Asset Management a $12.0 million secured convertible note in July 2024. GMGI subsequently has made monthly payments on this note through cash and share payments and fully repaid it last month, with a recent $7.2 million payment to cover the balance that remained as of April 28, 2025. GMGI incurred no prepayment penalties by repaying this note before it came due.
The debt repayment returns the company’s leverage ratio to 2Q24 levels prior to the acquisition of Meridianbet and assumption of debt related to that transaction. The company estimates that its pro forma leverage ratio adjusted for the Lind note payment would be about 1.2x. Moreover, since the consummation of the transaction, GMGI has reduced the consideration payable to the former owners of MeridianBet Group to about $34.9 million from $70.0 million, through payments in cash and shares.
The recent debt payment on the Lind note was funded using cash on hand, with no share issuance. We believe the elimination of this debt enhances the company’s financial flexibility to support its multiple growth initiatives. The company had cash and equivalents of just shy of $30 million at the end of 1Q25.
In addition to debt reduction, the company’s capital allocation strategy also includes a share repurchase plan. GMGI’s goal is to maintain sufficient liquidity and financial flexibility to fund operations and growth. To fund acquisitions, the company has used a combination of cash and shares, as well as earnouts.
Company issued full year 2025 guidance; revenue expected up 26%-29% year-over-year
The company issued full year 2025 guidance. Golden Matrix expects full-year 2025 revenue to range from $190 million to $195 million, reflecting a growth rate of about 26% to 29% compared to 2024, as GMGI continues to invest in technology, content and new licenses to drive growth and shareholder value.
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