By M. Marin
NASDAQ: MRDN
READ THE FULL MRDN RESEARCH REPORT
2Q26 revenue up 16% y/y; many customers acquired in late June made only marginal 2Q contributions but form part of growing customer base MRDN expects to monetize going forward
Meridian Holdings Inc. (NASDAQ: MRDN) reported 2Q26 results yesterday, with revenue increasing 16% year over year to $50.2 million, driven by record new customer registrations and double-digit growth in wagering and deposit volumes across its key Meridianbet operations. Growth was partially offset by bettor-friendly FIFA results early in the World Cup tournament.
MDRN subsidiary Meridianbet Group represented more than 70% of total revenue with segment topline of $35.8 million advancing 23% year-over-year. Meridianbet segment operating income nearly doubled (up 91% year-over-year) to $6.1 million, representing net margin of 17%. Importantly, the World Cup brought new players to the company’s platform and new customer registrations increased 37% year-over-year and first-time depositors grew 24% year-over-year. Total deposit volume was up 24%. Betting gross gaming revenue grew 37% year-over-year on record wagering activity. However, the World Cup games led to some higher than average bettor-friendly FIFA results, which – along with two major casino wins that totaled more than $1.2 million in 2Q26 – negatively impacted MRDN results.
1H 2026 revenue rose 17% year over year to a record $100.3 million, marking the first time the company has surpassed $100 million in 1H revenue. Management attributes this to the company's growing scale and continues to focus on boosting operational efficiencies, technology integration, and disciplined capital allocation to support growth.
Expanse Studios, the company's proprietary game studio, continued to expand its content and distribution footprint. Expanse Studios recently signed a strategic distribution agreement with MaxBet, one of Serbia’s leading omni-channel gaming operators and a subsidiary of Flutter Entertainment plc (NYSE: FLUT, nr). Expanse also launched with new distribution partners such as MaxBet Serbia (part of Flutter Entertainment), Synottip, and Joker.lv, while also entering a North American distribution partnership with Bragg Gaming. Expanse Studios is a leading B2B iGaming content provider that specializes in slots, crash games, turn-based strategies, and card games. Expanse has a growing portfolio of more than 70 proprietary titles and 1,500+ casino brands across Europe, LATAM, and North America. The studio secured certifications in Latvia, Colombia, Portugal, and Slovenia, and enhanced player engagement with the launch of jackpots, tournaments, and its Achievo gamification platform. Reflecting expanded footprint and content access, Expanse 2Q26 revenue advanced 138% year-over-year and gross gaming revenue rose 90%.
Combined RKings Competitions and Classics For A Cause revenue of $10.8 million was 4% higher compared to 2Q25. This represented 22% of consolidated MRDN revenue. RKings revenue grew about 5% year-over-year to $7.0 million. Classics for a Cause new users rose about 28% year-over-year, and active VIP subscriptions were roughly 10,100 at quarter-end.
GMAG revenue was $3.6 million, essentially flat compared with $3.6 million in 2Q25. The segment deployed 2,382 new games in 2Q26. MexPlay online casino revenue was up 31%, with new customer registrations up 50% year-over-year and first-time depositors up 53%.
Consolidated MRDN gross profit advanced 10% year-over-year to $26.9 million and gross margin was 53.5%, compared with 56.4% in 2Q25. As noted, lower sportsbook and casino hold during the quarter constrained quarterly margin, and the company also expensed customer-acquisition investment related to the World Cup during the quarter and, conversely, many newly acquired customers came onto the platform late in June and so made only marginal contributions during the period. Nevertheless, they form part of the growing customer base that MRDN expects to further monetize in coming quarters.
Net income attributable to Meridian Holdings was $2.2 million, or $0.17 per share, compared with a net loss of $3.6 million, or ($0.31) / share, in 2Q25. This marked MRDN’s second consecutive quarter of GAAP profitability. Adjusted EBITDA increased 43% year-over-year to $5.9 million compared with $4.1 million in the prior-year period, and operating cash flow reached $7.8 million, compared to $2.4 million in 2Q25. The company expects its improving operating cash flow to support continued deleveraging efforts (see below) and investments in operations and growth initiatives.
Balance sheet strengthening measures
MRDN has also strengthened its balance sheet, reducing net debt by 65% year-over-year in 2Q26 through debt repayments and cost containment measures to conserve and grow the cash balance. The net debt leverage at the end of 2Q26 equated to under 1.0x (0.39x) annual adjusted EBITDA, down from a leverage ratio of about 1.5x at the end of 1H 2025. This enhances the company’s financial flexibility to support its multiple growth initiatives, in our view.
MRDN had cash of $17.3 million at the end of 2Q26 and $9.4 million in net debt. Following six sequential quarters of deleveraging, interest expense declined roughly 80% year-over-year. The company did not grant any new equity awards during the quarter and the share count was basically flat, with shares outstanding up only 0.23%, reflecting vesting and settlement of previously granted employee awards.
New CEO has extensive company experience; CFO departure
Following its report of 2Q26 results, MRDN announced several executive changes, including the departure of the CFO, and board appointments. The company believes the new management structure will facilitate its ability to execute the next planned stage of its international growth strategy. Zoran Milosevic, Meridianbet CEO, who led Meridianbet for more than 18 years and oversaw its acquisition by MRDN, has been appointed CEO of the consolidated company (and remains CEO of Meridianbet), while Interim CEO William Scott, who served in that capacity since late 2025, will transition to the CFO role and continue to serve as board chairman. He has a strong background in accounting and finance, as well as gaming. Separately, Michael Prescott has been appointed as an Independent Director and will serve on the Audit Committee, further strengthening the Board's governance, regulatory and public company oversight capabilities. The company noted that former CFO Rich Christensen will provide transition and consulting services.
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