RKings acquisition continues to drive growth at Golden Matrix in Q2

| By Robert Fletcher
Virtual sports and gaming provider Golden Matrix put near-record revenue for the second quarter of its 2022 financial year primarily down to the impact of its acquisition of UK-based competitions brand RKings.

Revenue for the three months to 30 April was $8.5m (£6.8m/€7.9m), up 226.9% from $2.6m in the corresponding period in the previous financial year and just short of the quarterly record of $8.6m set in Q1 of 2022.

Golden Matrix said that this increase was largely due to its acquisition of an 80% controlling ownership RKings in November 2021, with this area of the business responsible for 60% of total revenue in Q2.

The provider also noted a 28.0% year-on-year increase in revenue from its traditional B2B segment during the quarter.

Golden Matrix in Q2 also began trading its common stock on the Nasdaq Capital Market in the US, via the ticker symbol ‘GMGI’. Plans for the listing were first announced in March of last year.

Turning to expenses for the quarter, the cost of goods sold amounted to $5.9m, up by 293.3% year-on-year, though the sharp rise in revenue meant gross profit was 127.3% higher at $2.5m.

Total operating expenses were up 80.0% to $1.8m, leaving an operating profit of $758,534 for the quarter, an increase of 436.2% on last year. Golden Matrix also noted a foreign exchange gain of $114,153, which meant pre-tax profit was $873,229, up 582.3% year-on-year.

The provider paid $171,780 in income tax and also noted $114,465 in profit attributable to its non-controlling interests, meaning net profit attributable to Golden Matrix was $586,984, up 351.6% from Q2 of 2021.

“We are pleased with the financial results of our second quarter as a company with both B2B and B2C verticals,” Golden Matrix chief executive Brian Goodman said. “During the quarter we implemented upgraded technology and stronger accounting controls to improve cash flow and profitability at RKings. 

“The acquisition of RKings has given us entry into a well-established B2C vertical in a new market outside of the Asia Pacific region. With its highly popular prize offerings coupled with nominal player acquisition costs, the RKings’ Tournament Platform is highly scalable; and we plan to introduce it into additional regulated markets worldwide, beginning with Mexico in the current quarter.”

In terms of its first-half performance, revenue for the six months to 30 April amounted to $17.4m, up 278.3% year-on-year.

Costs of goods sold jumped 433.3% to $12.8m and operating expenses were 70.0% higher at $3.4m, leaving an operating profit of $1.2m, up 578.9%.

Golden Matrix gained $198,829 on foreign exchange, which meant it was able to post a pre-tax profit of $1.4m, up 656.2% from $180,144 last year.

After also accounting for $247,184 in income tax payments and $178,757 in profit that was attributable to non-controlling interests, net profit for the half was $936,363, an increase of 419.8%.

 “We enter the remainder of this fiscal year with two robust operating divisions and a strong balance sheet,” Goodman said. “As stated previously, we continue to evaluate new opportunities in both the B2B and B2C spaces that will further accelerate our overall revenue growth and – in accordance with our acquisition strategy – are always accretive to earnings.”

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