Golden Matrix slips to Q3 loss despite record revenue

Las Vegas-based Golden Matrix Group has reported a 22 per cent increase in revenue to $32.4 million for the first nine months of its 2023 fiscal year, benefiting from a record performance in the third quarter.

As revealed last month, revenue for the third quarter ended 31 July surpassed $11 million for the first time, growing by 24 per cent year-on-year to $11.3 million.

This was driven by a 58 per cent increase in B2C revenue to $7.6 million, which offset a 13 per cent decline in B2B revenue to €3.7 million.

Within the B2C segment, RKings Competitions had over 311,000 registered users on its tournament platform at the end of Q3, while its Mexplay online casino in Mexico had over 32,800 registered users.

The UK was Golden Matrix’s biggest market in as revenue grew by 54 per cent to $7.5 million in the third quarter, offsetting a 13 per cent drop in Asia Pacific revenue to $3.7 million, with Latin America contributing $156,181 in revenue.

Cost of goods sold rose 39 per cent to $9.2 million, while operating expenses were 73 per cent higher at $3.0 million. As a result the company posted a net loss of $1.0 million for the quarter, compared to net income of $0.7 million a year ago.

“We have continued the year with strong momentum and delivered solid results,” said Golden Matrix CEO Brian Goodman. “The company achieved record revenues and posted its 7th consecutive quarter with positive cash flow from operations.

“With respect to the reported net loss of $965,628, profitability in Q3 was impacted by several factors, including a significant increase in one-off legal and due-diligence expenses associated with the anticipated acquisition of the MeridianBet Group, as well as the start-up marketing costs related to the roll-out of Mexplay, the company’s B2C online casino in Mexico.

“We have made important investments during the quarter in systems and people to accelerate the growth of our B2C segments, both RKings and Mexplay,” Goodman continued. “At the same time, there was significant progress in seeking to secure the financing required to close, and working towards closing, the pending acquisition of the MeridianBet Group and its related companies.”

For the first nine months of 2023, total revenue increased by 22 per cent to $32.4 million, generating a net loss of $1.9 million versus net income of $1.8 million in the prior year period.

“Upon the successful acquisition of MeridianBet, the combined enterprise is expected to be generating multiple streams of gaming revenue and profit in regulated jurisdictions worldwide, and offering highly popular best-in-class products, including casino games and sports betting,” added Goodman. “Closing of the MeridianBet acquisition will be a watershed event which is expected to catapult Golden Matrix into the global gaming markets as a highly competitive participant.”

As at 31 July the company held cash of $16.1 million compared to $14.9 million at the end of October 2022.

Shares in Golden Matrix Group Inc (NASDAQ:GMGI) closed 9.86 per cent higher at $3.12 per share in New York Friday.