Net loss widens at Golden Matrix Group despite record revenue in 2023
Revenue was 22.8% higher year-on-year, with GMGI saying this was driven by its diversified portfolio. Record revenue in 2023 is in line with a forecast published by GMGI towards the end of last year.
However, the sticking point for GMGI is net loss, which increased from $454,065 in 2022 to $1.0m in the past year. GMGI put this down primarily to general and administrative non-cash expenses of $2.5m for stock-based compensation. Tax also increased, while it spent more on Mexplay operations and consulting fees.
GMGI CEO hails “significant” revenue growth
On the whole, GMGI’s CEO Brian Goodman was upbeat about the yearly performance. He picked out the revenue increase as a key highlight for the business and said he was positive about further growth in 2024.
“Year after year, we continue to achieve significant improvements in revenue,” Goodman said. “This solid momentum has delivered four consecutive years of revenue growth and shareholders’ equity increases.
“GMGI’s success in the past financial year was driven by our diversified portfolio, spanning B2B and B2C, in some of the fast-growing online gaming markets around the world.
“Increased costs incurred and investments made in our B2B and B2C platforms this past year have been critical to keeping us competitive and accelerating strong revenue growth. Our state-of-the-art gaming systems and superior gaming content continue to evolve to engage and increase our growing numbers of millions of participants.”
Mixed news as cost outweigh revenue growth at GMGI
Taking a closer look at the 12 months to 31 December 2023, GMGI said revenue from its B2B segment amounted to $15.6m and B2C $28.5m.
For the B2B business, GMGI current works with 785 gaming operators and has 8.2 million customers. Meanwhile, the RKings and Mexplay brands in the B2C segment now have over 325,000 and 61,000 registered users, respectively.
In terms of spending, cost of goods sold hiked 27.5% to $34.3m and total operating expenses jumped 15.6% to $10.4m. GMGI recouped $36,803 in other income, with this coming from interest earned during the year.
Pre-tax loss amounted to $489,444, in contrast to a $463,077 profit at the same point in 2022. GMGI paid $683,306 in income tax, leaving a net loss of $1.2m, wider than $250,038 in the previous year.
However, this loss shortened when taking into account $132,588 in positive foreign currency translation. As such, comprehensive loss attributable to GMGI amounted to $1.0m, compared to $454,065 in 2022.
“We believe that the results delivered over the last financial year demonstrate the ongoing resilience, competitiveness and diversification of our portfolio, IP and the sound fundamentals in the markets in which we operate,” Goodman said.
GMGI edging closer to MeridianBet deal
Meanwhile, GMGI updated the market on its pending acquisition of MeridianBet. GMGI agreed to buy MeridianBet in January 2023, in a deal worth approximately $300.0m.
GMGI hoped to close the acquisition in H1 of 2023. However, in July GMGI made several amendments to the deal, pushing the closing date back to Q4 of 2023.
In October, it was revealed talks between the two parties led to further amendments. The main change was an extension to the proposed closing date, pushing this back as far as Q1 2024.
Earlier this month, GMGI said it hoped to complete the purchase before the end of Q1. This, Goodman said, remains the goal for the business.
“[The acquisition] is expected to significantly advance GMGI’s global footprint and significantly increase revenues and profitability,” Goodman said.
“There will be numerous B2B and B2C product offerings in multiple regions worldwide and we believe that the combined company will be in a favourable position to participate in the online gambling markets in both the US and Canada.”