Golden Matrix Group, Inc. (NASDAQ: GMGI) reported faster sales growth in the third quarter as the global gaming powerhouse saw strength across markets and continued to broaden its footprint through M&A and key regulatory wins.
The company, which offers tournaments and sports betting while also selling technology to other operators, said sales rose 85% in the third quarter after a 75% increase in the second quarter. The company continues to be profitable, with adjusted EBITDA of $4.3 million in the third quarter, reflecting health across segments.
“Golden Matrix’s Q3 performance demonstrates our commitment and success in building sustainable, long-term growth and strengthening our industry position,” Brian Goodman, CEO of Golden Matrix, said Tuesday. “Once again, we have delivered strong results across our divisions, supported by strategic acquisitions, platform upgrades, and the expansion of our iGaming portfolio.”
Golden Matrix has operations in more than 15 countries and continues to benefit from a boom in online gambling around the world. As more jurisdictions relax regulations, bettors worldwide can gamble in person or on smartphones around the clock.
Following the April purchase of MeridianBet Group for $300 million, the company continues to use its healthy balance sheet to support M&A. During the third quarter, Golden Matrix purchased an 80% stake in Australian discount platform Classics for a Cause Pty Ltd (CFAC).
The deal marks Golden Matrix’s first foray into the consumer rewards industry, complementing its existing operations in the gaming and sports betting sectors. CFAC runs a consumer platform that gives paying members access to a wide range of discounts from retailers across Australia, along with giveaways featuring luxury cars and vacations. Golden Matrix can take that business into other markets using its vast existing footprint.
During two months of ownership, CFAC added $2.1 million in revenue and $503,000 in EBITDA, expanding Golden Matrix’s market reach and contributing to overall profitability.
Tech innovation also continued in the quarter with the launch of The AI Bet Recommender, which is designed to offer real-time, personalized betting suggestions, tailored to individual player preferences and habits. Earlier this year, the company also introduced an AI-powered casino game recommender that introduces players to games (think of a TikTok-like algorithm that shows you the content you’re likely to enjoy).
Golden Matrix continues to secure key regulatory approvals that can open up enormous markets. The company’s Brazilian subsidiary, Meridian Gaming Brasil, has successfully passed another crucial round of Brazil’s exclusive licensing process for sports betting and iGaming. The company is on a shortlist of 89 operators and expects the approval process to finish by the end of 2024.
That market is projected to reach around $2.2 billion in 2024. The Brazilian gambling industry overall is forecasted to generate $34 billion in sports betting turnover by 2028, according to a report by the International Betting Integrity Association.
In nearby Mexico, the company’s online casino known as Mexplay reported a 56% increase in active players, further underscoring growth potential in Latin America. Gross gaming wagering rose 67% to $15 million, leading to gross gaming revenue of $575,000.
The recently-acquired MeridianBet division saw revenue rise 16%, led by a 19% online increase and 6% in retail. Deposits rose to $61.9 million with new registrations up 23% to 125K. Sports betting, which has an even better margin than casino gaming, rose 7.4% helped in part by the Olympics.
The company’s GMAG platform, which offers B2B technology and software for partner operators via in-house game production group Expanse Studios, posted another strong quarter. Wagering volume surged 84% to $1.4 billion, helped by enhanced customer retention tools and the addition of high-margin games that also drive profitability.
Turning to valuation, Golden Matrix targets $76 million in Ebitda next year, indicating a multiple of just 4.8 times. That compares with DraftKings Inc. at 23 times and Caesars Entertainment Inc. at 8.2 times, according to Bloomberg. That gap has widened in recent months even as Golden Matrix saw sales growth accelerate, indicating a potential window of opportunity for investors.
With momentum across divisions and plenty of M&A opportunities ahead, Golden Matrix shares look poised for action.