Q2 2025 Golden Matrix Group Inc Earnings Call

Collagen matrix group Saran, Malosovich CEO of Meridian, but rich Christians and CFO of Golden Matrix Group.

At the conclusion of this call the recording and supporting resources will be available on Golden matrix groups IR website.

As a reminder, today's call will contain forward looking statements certain statements made on this conference call, including our responses to questions may constitute forward looking information within the meaning of the applicable securities laws. These statements are based on various assumptions about future events, including market and economic conditions.

Ms prospects technological developments and regulatory changes, while we believe these assumptions are reasonable they are subject to risks and uncertainties that could cause actual results to differ materially for a complete discussion of these factors. Please refer to our most recent 10-K filing and other public disclosures non <unk>.

Measures will be discussed and reconciliation of these numbers can also be found in our recently filed 10-K and the earnings press release available on our website I will now hand, it over to Brian Goodman CEO of Golden Matrix Group.

Good morning, everyone.

And for joining us to review Goldman Matrix Group second quarter fiscal 2025 results.

Q2 was a challenging quarter with revenue growth of 10%.

Year below our expectation of roughly double that correct. This shortfall was driven unusual customer trains esports outcomes.

European business, we favorite teams one more often.

Historical averages.

Excluding this temporary impact we would have remained on track to meet our full year revenue guidance analysis supported by <unk> strong performance confirms that this volatility is random and not indicative of underlying trends with slower quarterly revenue growth coupled with <unk>.

Continued investment to grow active user base.

Earnings declined.

The operating leverage we have previously enjoyed worked against us during the quarter.

While we were able to identify and eliminate costs that will reduce our operating expenses by roughly $500000 per quarter. It was not in time to benefit this quarter.

We have recently built and deployed new said there'll be odd systems to support our rental businesses and the implementation of this new technology is already showing excellent results.

Largest rental ticket business all kings competitions deliberate several standup milestones this quarter.

Sure thing.

New all time daily revenue.

Although the $315000 supporting the mix based study of $281000 and more recently last week on the first of all this posted a remarkable all time record in daily sales, although the $440000 for that.

Dave which was driven by 13.

<unk> thousand orders in one day. Additionally, gross profit in the month of July for all Kings was over 26%.

This performance underscores the resilience strong engagement growing monetization potential of our rental ticket businesses and the massive potential that these businesses per barge.

I'll now hand, you over to our CFO rich Christensen to walk you through the financial performance for the quarter.

Thank you, Brian and good morning, everyone I'll.

I'll provide a summary of our second quarter of 2020 Five's performance and then turn the call over to <unk> to discuss our operational highlights from meridian debt.

Please note that all income statement measures discussed except for non-GAAP adjusted EBITDA on a GAAP basis first let's start with revenue.

Total revenue for the second quarter was $43 2 million representing.

Representing a nine 6% growth over last year.

Foreign exchange was a benefit of four 5%. This was roughly 10% weaker than what wed anticipated and was primarily due to the impact of customer from the outcomes within our European sports betting business as Brian mentioned, we see this as an anomaly and have since seen July returned to our expected growth trends.

If we were to exclude the impact of our prior year acquisition of classics for a cause and tour were to remove the four 5% positive impact of foreign exchange revenue was flat for 2024.

Moving to gross profit gross profit reached $24 4 million in the second quarter of 2025, reflecting a gross margin of approximately 56%.

This is a 135 basis point improvement over the prior year.

Our meridian bet segments gross margin of 70% was lower by 270 basis points compared to last year, primarily due to additional taxes assessed on gaming in Serbia.

With the transition of our core operations to Atlas, our fifth generation sports betting and gaming platform and releasing the second generation of sports recommend or we are now realizing meaningful economies of scale.

This migration is markedly enhanced operational efficiency unlocked greater scalability and elevated the user experience delivering a seamless intuitive and increasingly personalized journey for our players across markets.

Turning to the other two segments <unk> improved 444 basis points due to improved supplier terms and product mix and our raffle ticket businesses, which include our kings and classics for cause had a gross margin improvement of 546 basis points from the acquisition of classics.

For our cost which carries a higher gross profit.

Turning to operating expenses.

Operating expenses grew.

$5 1 million to $26 7 million in the second quarter of 2025.

This included $1 million from the classics for a cost of acquisition and $1 million in foreign currency from a weakening U S dollar.

The remaining $3 1 million was primarily tied to our meridian about segments and reflect strategic investments to expand geographically.

Grow market share and enhance scheming technology specifically they include first startup expenses for our Brazilian launch second marketing spend including social media campaigns and team sponsorship aimed at player acquisition and retention.

Third regulatory cost increases from higher minimum wages and taxes, primarily in Serbia, and finally depreciation on our Atlas platform, which was deployed late last year.

Additionally, we've made cost reductions that will reduce our operating expense burden by roughly 500000, a quarter starting in the third quarter of 2025.

We had a net loss of $3 6 million or <unk> <unk> a share.

This was a decline of $3 6 million and three cents a share from prior year and this was due to the increase in interest expense of $1 $5 million driven by our debt prepayments, which accelerated the amortization of debt discounts as well as accrued interest.

In addition to our operating costs growing by $2 4 million more than the incremental gross profit generated in the quarter gave rise to this loss exclude.

Excluding the additional interest expense adjusted EBITDA declined by $2 million or 37%.

$3 4 million.

Turning to liquidity at quarter end, we had $22 million in cash and cash equivalents and our net debt leverage ratio continues to improve now under one five turns.

Now I'll hand, it over to his or her and milosevic, our CEO of Meridian bet to discuss operational highlights.

Thank you rich.

Bet delivered solid operational performance in Q2 with revenue growing 16% year over year to $29 2 million U S.

Online revenue, which represents our strategic focus increased 20% demonstrating strong momentum in our core growth channels.

Our casino vertical.

Was the standout performer jgr serves 29% with turnover, reaching $434 million U S.

30% year over year.

<unk>, our content library by 2005 hundred games and the impact is clear casino I'll turn it over to play a jumped 50% quarter over quarter to nearly 4000 to us.

This validates our content strategy.

Player engagement initiatives.

The operational metrics remained strong.

Active users expanded 15% year over year.

And you were to just <unk> acquired 174% driven primarily by our <unk> launch.

Deposits increased 165% quarter over quarter.

Strong quality acquisition.

Sports revenue per player grew 28% despite challenging conditions.

In Brazil, we are now fully operational and the license through 10 and spend the night.

This is projected to be $5 6 billion market by 2025.

Our experience in the emerging markets across Africa, and the bulk of deal with playbook to capture share efficiency.

When it comes to sports betting margins June was particularly tough month for all possible globally.

When top soccer leagues, finishing my.

We are left with smaller leagues were favorites won more than usual.

<unk> shifted the pathways.

For example in June.

Sports margin came in at nine 9% versus historical average of 13, 3% as we had the convergence of major leagues endings, and unusual artery or favorite it's winning in remaining competitions.

What is important is that we are positioned exceptionally well to offset this.

Our diversified model means casino growth offsets or margin pressure and we're not dependent on any single vertical or outcome.

We continue investing in our technology platform.

All three of Commander version two is not alive, our new loyalty system connects all the retail touch points.

And we have enhanced our streaming capabilities.

Do you have the latest evolution of our proprietary technology.

Turning to expense studios.

The story is one of the exceptional execution.

Revenue jumped 652% year over year with nearly 500000 unique players.

449%.

This is our most profitable quarter to date.

Key achievements include.

<unk> 13 partnerships and use social casino segment positioning us for the next.

Recommendation wave.

Crossed 1000, B to B, Boston milestone, giving us one of the why does distribution networks in the industry.

Thank you Lord certifications in Brazil, Peru, Croatia, Romania.

Our launch success of <unk>, new title gates of Olympia.

The underlying metrics are equally strong jgr serves to 557% and the games business increased 273%. This shows real player engagements multi drug distribution growth.

The Q2 demonstrate exactly what <unk> built a resilient diversified business that's performed through cycles.

<unk> margins will normalize as always do.

Meanwhile, our casino vertical is accelerating Brazil is ramping and expenses shifting escape velocity.

The operating discipline, we invest in purpose and we are building for the long term.

The fundamentals are strong and getting stronger.

Thank you next to you rich.

Thanks norm as we look at our performance so far during 2025 and the impact of customer friendly outcomes experienced in the second quarter, we are reducing our full year revenue to between 185 and $188 million, representing a 22% to 24% growth rate over 2024.

We have seen July revenue growth from our European business recover as expected up both sequentially and over 2024 by roughly 25% in constant currency terms. This is a return to our expected trends and consistent with our transactional volumes.

We remain focused on expanding our presence in regulated markets enhancing our proprietary technology stack and driving shareholder value through disciplined capital allocation, we are well positioned to build on our success with a strong balance sheet and significant opportunities across both existing and new markets.

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In closing I want to thank our global teams for their continued dedication and execution. We look forward to updating you on our progress in the quarters ahead with that I'll turn over the call to Brian to wrap things up.

Thank you rich and thank you sorry.

Goldman matrix is entering the next phase of its evolution as a leading force in the global gaming market.

The underlying businesses are healthy and robust leveraging our consistent performance operational screen innovative platforms and expanding international footprint, we are well positioned to drive the company's continued growth.

Today's results underscore our financial resilience consistency and ability to deliver scalable sustainable growth.

With a focus on long term success, we remain committed to profitable expansion, while maintaining operational excellence. Looking ahead. We are excited about the opportunities in front of us and we will continue to drive shareholder value through technology leadership strategic mall.

Expansion into execution.

Thank you again for your continued support and we look forward to an exciting year.