Can you please break down your Q2 results for us?
It’s a little bit of a case of comparing apples and oranges, because before we made the MeridianBet acquisition, our year end was different. However, the company has, primarily, always made money. I think it had one quarter that had a slight negative position. But Meridian is the larger company, which means it is now the acquiring company. Therefore, because they were the bigger company and we went out and acquired them, they became the acquirer in terms of the SEC laws. In terms of accounts, if the company that you're buying is bigger than you, then their financials become the dominant financial. Therefore, when we do a comparison to our Q1, we're comparing our current numbers to their numbers that previously didn’t include our numbers.
Going back in time to when the company started off, it was an OTCQX company at one stage and, due to its bottom-line profitability, we uplifted to NASDAQ. We never raised any money. We naturally uplifted onto NASDAQ because of the success of the company. From there, Golden Matrix acquired a tournament business in the UK called RKings Competitions, which has been very successful. It became more than 50% of our revenue and profits at one stage. Then, after that, we obviously looked to acquire MeridianBet. It took us a little longer than we anticipated, but ultimately, we finalised that acquisition and, like I say, our most recent revenues are reflective of that purchase.
So yes, our latest results were quite phenomenal because I think just in terms of revenues, we were up 75% on their previous comparative quarter. It’s an exciting time because we've just acquired another company, which is also a tournament-type company, in Australia. Not everybody realises that Australia is one of the largest gaming markets in the world. It's a good position for us to be in.
The MeridianBet Group acquisition passed in Q2; how has this development affected your operations in the burgeoning LatAm & African markets?
As I say, their operations are our operations, and they have operations in around 17 licensed jurisdictions and regulated markets globally. There are plans to enter the American market as well. In terms of that, we (Golden Matrix) have a lot of synergies in that we build systems. We deliver white-label solutions to gaming operators. But what Meridian brings to the table is a few things we never had. We never had any experience in sportsbook – and they bring technology as well as experience. We would claim their technology is the world's best when it comes to sportsbook.
It's a simple formula. I tell everybody and they look at me as if I'm crazy. How simple can it get? It's simply a matter of how much you pay for the player as opposed to how much you can get from the player – and that's extremely important
Moreover, they bring a global footprint, which gives us the ability to enter new markets. They have their own slot games. We never had that. We always sold third-party games. We continue to sell third-party games, but we will now use our distribution network, which is fairly big. We have over 800 operators on our systems and we have over 2 million players; we will use that network to distribute Meridian’s content. There has also been an update on the market in New Jersey; once we become licensed in the US, we'll look to distribute those games in the US, too. That will be our entry into the American market. Best of all, though, I almost left out Brazil. Of course, everybody's asking what's happening in Brazil!
That leads perfectly onto my next question: how are you expecting your Brazilian sportsbook to develop with the market’s pending regulation?
We're confident we'll get a licence. We've just gone through the second round of qualifications a week ago. We believe a lot of those people on the current list actually won't make the new requirements. Anyway, we have an operation already on the ground and it performs well.
When I talk about we, I'm talking about the original Golden Matrix company. Right now, obviously, Meridian is one of the strongest sports brands in Europe and in terms of Latin America it has an existing operation. We have technology we believe is best of breed. We think we’re going to be very competitive in Brazil, just by virtue of the fact that we already have an operation underway. Obviously, Meridian brings the additional expertise, too.
Your stock repurchase programme is set to end in July 2025. What was the thinking behind initiating this programme and how do you hope to reflect on it by this time next year?
It’s difficult in terms of stock programmes because they are not open-ended periods when you could buy stock. They are governed by certain rules. The SEC has some strict rules regarding buyback programmes and windows. Then, on top of that, you may not acquire stock in the marketplace when you have material information that the public doesn't have.
Now, what's happened to us is – and I don't want to give too much information away because I can't – but we were unable to acquire stock when we were finalising the deal for this new tournament company we acquired. Every time we enter an acquisition or a binding agreement, we're in possession of material information, so we cannot get in there and buy a stock because it will put the public at a disadvantage.
You can tailor certain games to certain markets, but then certain games can just end up being popular everywhere. We believe it's a matter of good mathematics and good visuals, that's what makes the game a success
How do you approach developing both B2B & B2C content across a range of very different markets?
We not only have game content, but we also have systems – and our systems are well regarded. Golden Matrix is known for its loyalty systems. As I’m sure you know, any casino’s make and break is basically its customer retention. It's one thing to buy the players. It's another thing to retain them and gain value from them. But it's a simple formula. I tell everybody and they look at me as if I'm crazy. How simple can it get? It's simply a matter of how much you pay for the player as opposed to how much you can get from the player – and that's extremely important. Honestly, it's critical, because if you're paying more for the player than you're getting from them, well, it's a black hole – because the more players you buy, the worse your business becomes.
That margin is generally managed by CRM-type processes in today's world, even more so now with artificial intelligence. When you have millions of players on your system, which we have, you can't really chase after individual players on a one-on-one basis. The system learns behaviour and it reacts to that behaviour based on what the person likes. On both sides, on the Golden Matrix side as well as the Meridian side, we have very advanced artificial intelligence. It offers players products that they want, rather than products you think they want based off very little knowledge of their consumer habits.
Getting back to your original question regarding content, when you put out a game – and it doesn't matter who you are – you can think that game is going to be the most successful game ever, and then you put it out and maybe it doesn't perform that well. You never know until the game is out there. However, we use high-quality developers, people with a track history, good mathematics and visuals. So that’s enabled us to have a good amount of success. I'm not going to get into names – but there are companies out there that have maybe one game that has blown the world apart. You can probably guess who I mean. You can tailor certain games to certain markets, but then certain games can just end up being popular everywhere. We believe it's a matter of good mathematics and good visuals, that's what makes the game a success.
Of course, everybody's asking what's happening in Brazil!
Having reported your highest quarterly revenue in Q2 2024, where do the goals now lie for Golden Matrix in the second half of the year?
As we talked about with acquisition, the core business has grown really well; you can see by the numbers. This quarter, we’ve had double-digit growth across the board. Looking forward, the company will remain fairly conservative in that it would never buy a company that loses or burns money. That's how we'll scale this company. The business is very diverse as well, because when you look at another big operator, for instance, in America, you'll find that they're primarily a sports company. In terms of diversity, it's difficult for us to present a singular message because we do so many things, but it gives us that ability to have synergies.
We're doing tournaments, we're doing sportsbook, we're doing casino, we’re doing B2B & B2C. On top of all that diversity, we try to diversify by operating in a lot of countries, too. We will continue to grow that footprint, with Brazil for one; we've also just been awarded a South African licence. So, we will continue to grow our footprint as well as looking to offer a diverse range of products across the board.
