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Net loss remains at Galaxy Gaming despite revenue increase in 2023

| By Robert Fletcher
Galaxy Gaming remained at a net loss for its 2023 financial year despite reporting an 18.8% increase in group revenue to $27.8m (£22.0m/€25.7m).
Svenksa Spel revenue

Revenue was higher across both land-based and digital operations in 2023. However, with costs also increasing in several areas, Galaxy Gaming again posted a net loss.

CEO and president Matt Reback was, on the whole, pleased with the mixed set of results. Reback joined Galaxy in November to replace  Todd Cravens, who stepped down after leading the business since mid-2017.

Analysing the results, Reback highlighted revenue growth as a major positive for Galaxy. He also spoke of his excitement about future prospects for the business.

“We believe that the opportunistic sales of perpetual licences peaked in 2023,” Reback said. “We will return to a sustainable growth model relying principally on recurring revenue generated from our robust library of core and premium felt products, our emerging line of GOS products and our igaming business in 2024.

“I am now four and a half months into my tenure at Galaxy and am very excited about the prospects for the company. 

“Over the intermediate term, we will develop a strategic plan that will allow us to continue to deliver double-digit revenue growth rates through a combination of organic growth and potential tuck-in acquisitions.”

Land-based leads the way for Galaxy

Breaking down the 2023 figures, the GG Core land-based business remained the primary source of revenue. During the year, revenue from this segment increased 25.7% to $19.3m.

Galaxy said this increase was attributable to revenue from the sale of perpetual licences to customers of $3.7m, up 1,226.5%. Other increases were attributed to revenues from a new distribution agreement.

Turning to the GG Digital business, revenue was also higher year-on-year, but at the levels of GG Core. Digital revenue climbed 4.8% from $8.0m in 2022 to $8.4m in the past year.

Galaxy said this rise was due to online customers experiencing growth in traditional markets and their entry into new markets.

As for where revenue came from, some $17.0m was generated across the Americas, a rise of 34.9%. The other $10.8m was drawn from Europe, the Middle East and Africa, down 0.9% from 2022.

Higher spending hits bottom line as net loss remains

Turning to costs, operating expenses were 21.3% higher for 2023 at $21.1m. This was mainly due to a 25.6% rise in selling, general and administrative spending to $15.7m.

Operating profit increased by 9.8% to $6.7m. However, higher net finance-related expenses, which hit $8.5m meant a pre-tax loss of $1.7m, compared to $1.6m in the previous year.

Galaxy paid $79,228 in total tax but did note a positive foreign currency translation impact of $51,612. This meant it ended the year with a net loss of $1.8m, level with the previous year.

However, there was a slight rise in adjusted EBITDA, with this edging up 1.0% to $10.6m.

Similar story in Q4

As for the final quarter of the year, Galaxy only published certain figures for the three-month period. These included a 6.4% increase in net revenue to $6.7m.

GG Core revenue was 18.0% higher at $4.6m but GG Digital revenue slipped 12.5% to $2.1m.

Group net loss for the quarter reached $820,000, in contrast to a $55,000 profit in 2022. In addition, adjusted EBITDA declined 10.0% to $2.8m.

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