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Operator: Good day, and welcome to the Golden Matrix Group Second Quarter 2024 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note today’s event is being recorded. I would now like to turn the conference over to Brett Milotte, Senior Vice President of ICR. Please go ahead.

Brett Milotte: Thank you, and welcome, everyone, to Golden Matrix Group’s second quarter 2024 earnings call. Joining us today is Brian Goodman, CEO of Golden Matrix Group; and Zoran Milosevic, CEO of Meridianbet. On this call, we will review Golden Matrix financial and operating results for the second quarter of 2024. Today’s call will contain forward-looking statements, and I will read some brief cautionary remarks regarding certain statements that may be made on this call. Certain statements made on this conference call and our response to various questions may constitute forward-looking information or future-oriented financial information within the meaning of the applicable security law. Statements about expected growth, prospective results, strategic outlook and financial operating expectations, opportunities and projections rely on several assumptions concerning future events, including market and economic conditions, business prospects or opportunity, future plan or strategy, technological development and anticipated events, trends and regulatory changes that may affect the corporation and its subsidiaries and in respective customers, industries.

While we believe these assumptions may be reasonable, they are subject to a number of risks, uncertainties and other factors, many of which outside – are outside the company’s control and which could cause the actual results, performance or achievement of the company to be materially different. There can be no assurances that these assumptions or estimates are accurate or that any of these expectations will prove accurate. For a complete discussion of these factors, please refer to our recently filed 10-Q, press release and other publicly available disclosures. Non-GAAP measures will also be discussed, and reconciliation of these numbers can be found in the recently filed 10-Q in the earnings press release that can also be found on the Golden Matrix Group Investor Relations website.

I will now hand the call over to Brian Goodman, CEO and Co-Founder of Golden Matrix Group.

Brian Goodman: Thank you, and welcome, everyone, to our second quarter 2024 earnings call. I’m pleased to announce that this is our first earnings report since our successful combination with Meridianbet. And joining me on today’s call is Meridianbet’s CEO, Zoran Milosevic. On this call, we will review Golden Matrix’ operational highlights, financial performance, divisional performance and the overall outlook for the company. Our second quarter delivered exceptional results, driven by operational success across all business units. We have maintained half performance through product diversity and cross-platform initiatives, and our dedicated team has executed on all of our short-term objectives. I am pleased to report that the consolidation of Meridianbet has been seamless, and we have gained strong momentum as a result of the recent acquisition, as evidenced by our successful results since the transformation.

We have now confirmed ourselves as a major player in the sports betting and iGaming industry with a robust road map, and we expect to continue achieving strong growth in all sectors of the business. We have not only built on historical momentum but plan to continue to build on new found tailwind as a result of the now completed consolidation. Before we move on to the financial highlights, I’d like to clarify some important items. Due to the relative size of the Meridianbet business in comparison to the Golden Matrix Group, Meridianbet was deemed the accounting acquirer. As a result and in terms of the financial reporting, it is important to note that the financials I’m about to present are a comparison of the consolidated company’s results against Meridianbet’s historical financials and performance and not against GMGI’s historical performance.

It is also important to note that a comparison of the consolidated company’s performance against Golden Matrix’ historical performance would have resulted in much higher growth trends and improved results. However, in terms of GAAP accounting and Meridianbet being the accounting acquirer, the comparisons I will present are correctly stated and are reflective of our new structure. On to financial highlights. As I’m sure everyone is aware, sports betting and iGaming are the fastest-growing segments in gaming, and we are very proud to be part of this rapidly evolving sector. We have posted strong financial performance across the business. Second quarter consolidated revenue grew 75% to $39.4 million, a continuation of the strong trends shown in the last quarter, whilst year-to-date revenue grew by 41% to $64.3 million.

Net income in this quarter was $15,000. This was impacted by non-cash items as well as considerable one-off acquisition costs and restructuring and implementation costs related to the recent acquisition. Second quarter consolidated adjusted EBITDA was consistent at $5.4 million after recognizing the non-cash items, one-off costs, the completion and implementation of the Meridianbet acquisition. Second quarter consolidated gross profit increased by 31% to $21.7 million, and year-to-date gross profit also increased by 17% to $39.4 million. Our balance sheet. The company has continued to maintain a healthy balance sheet. As at the 31st of July, the company had over $40 million in cash and equivalents, a 96% increase over December 2023 of $20.4 million.

Our debt position remains healthy as well with a net debt leverage ratio of only 1.6. Shareholder equity at the company grew 52% to $89.7 million. Now turning to the business units, where we have continued strong momentum. I’ll begin with our high-performing tournament platform, R Kings Competitions. R Kings and its related company, GMG Assets, posted yet another record second quarter with revenues of over $9.6 million, an increase of over 43% over last year. Players now total 386,000 as of 30 June 2024 and over 53,000 new players have been acquired year-to-date. Acquisition costs remain at a very low level of only $7.60 per player. Total active players now total 140,000. A remarkable total of over 5 million tickets have been sold year-to-date through 1.1 million purchases.

Turning to GMAG, our B2B aggregator gaming platform. Our recent focus has been on improving our gross margins in this business unit. We are achieving this by distributing our newly acquired state-of-the-art gaming portfolio, Expanse games, through our large number of clientele. We are diversifying our overall portfolio of games by adding the highly popular crash games, which have shown very strong performance in both the revenue generation and high margins. Second quarter wagering grew by 124% to $1.2 billion, and year-to-date wagering also increased by staggering 141% to $2.2 billion. Second quarter gross gaming revenue generated on the GMAG platform grew by 187% to $38 million, and year-to-date growth gaming revenue on the GMAG system grew by 186% to $68 million.

We now have over two million active players on our GMAG system, and we continue to sign new operators on a regular basis. We are currently implementing AI tools and state-of-the-art loyalty systems into the GMAG system to improve customer retention and results and revenues, and we expect the positive trend to continue. Now on to our MexPlay, Mexican-licensed casino. Whilst MexPlay is a relatively new casino operation, it has already shown solid growth trends. We have a monthly average of over 9,000 active players. Second quarter cash deposits increased 297% to $1.2 million. Second quarter wagering grew by 100% to $9.3 million, and gross gaming revenues grew by 154% to $422,000. I’ll now hand you over to Zoran Milosevic, CEO of Meridianbet, to talk about the Meridianbet results.

Zoran Milosevic: Thank you, Brian, and welcome, everyone. We are excited to share our strong quarterly results marked by significant achievements and promising opportunities. Let’s first review Meridian’s key performance indicators for this quarter, which reflect our strong performance, ongoing growth and market expansion. Revenue growth. In Q2, our revenues saw a robust increase of 11.4% compared to Q2 2023. The online segment led with 14% rise, while retail grew by 6%. Total deposits amounted to US$59.2 million, reflecting 16% growth compared to Q2 2023. The number of new online registration also increased to 136,000, marking a 17% year-over-year growth. Online casino success. The online casino sector recorded 17% revenue growth in Q2 2024 compared to Q2 2023, significantly bolstered by the addition of approximately 1,500 new games.

A standard achievement in Q2 was the game Super Heli from our Expanse Studios, which ranked second in the player engagement among all others offered. This is particularly impressive given the extensive library of 6,500 games from various providers. Sports betting. Sports betting revenue, including both in retail and online, rose by 7.3% in Q2 2024 compared to Q2 2023. Despite tough outcomes in April and May, we maintained robust growth. Our online sports gross gaming revenue margin for Q2 2024 improved to 9.9%, up from 8.3% posted in retrospective of Q2 2023, thanks to targeted marketing during European soccer championship. Retail sports performance. The second quarter of 2024 retail sports gross gaming revenue margin dropped to 13% from 14.4% in Q2 2023, influenced by unfavorable football results during the month of April and May in the second quarter of 2024.

However, June set a new monthly record of 16% GGR, above the average for the first half of 2024. Online casino margin. The online casino margin in Q2 2024 slightly decreased to 3.07% from 3.52% in Q2 2023. This was due to a 34% rise in amount of wagers and our expanded game library. Retail growth. Revenue from retail slot machines in Q2 2024 grew by 16% year-over-year, driven by addition of 120 new machines, enhancing our offerings and customer satisfaction. New jurisdictions. Since becoming part of Golden Matrix in April this year, Meridianbet continues to expand its global footprint. Leveraging our combined strength, we believe we are poised for a next major market entry, Brazil. As one of the select global operators with pending federal licenses, we believe we are uniquely positioned to access Brazilian substantial market projected at approximately US$20 billion with a potential player base of 106 million by 2025.

We believe that this access ensures that we are well positioned to leverage potential substantial growth opportunities across one of the planet’s fastest-growing betting and gaming market. Our strategic expansion hasn’t stopped there, of course. We have secured our new licenses in Peru, and the iGaming industry is valued at US$1.2 billion and is growing at 6.4% annually and South Africa, where digital gaming revenue is expected to reach $828.5 million in 2024. We expect our upward trajectory to continue and believe that we are not just participating in the global gaming market. We are actively shaping it. Investment in tech and AI. This quarter has been marked by our continued investment in AI as well. That’s why we are thrilled to highlight our latest innovation, an AI-powered casino game recommender that is already transforming player experiences and driving results steering wise.

In just one month, we have seen 3% increase in engagement with recommended games, a 9% boost of new – for new games introduced by AI. It’s innovations like this that we anticipate will keep us at the forefront of our industry and position us for continued success. I’m also pleased to announce that we have transitioned our core market operations to our new software platform called Atlas. This marks the most significant software upgrade in our history and represents the final phase of a five-year journey to completely overhaul our gaming infrastructure. With Atlas, we believe we are now positioned to compete with industry leaders like bet365 and Betano, who also utilize the latest generation software. We are on track to complete transition in all remaining countries by Q3 of 2024.

Expanse Studios. Expanse Studios is making significant strides in expanding its market presence. We are in the process of entering competitive U.S. iGaming market by applying for the New Jersey casino service industry enterprise license. The application process is well underway and pending final confirmation. Additionally, we have secured a license for Bulgarian market and pursuing iLicense in Croatia and Romania. We believe that these regulatory advancements are key to expanding our footprint in Europe. Notably, Expanse Studios achieved a 30% revenue increase in Q2 2024 compared to Q1 2024, highlighting our strong performance and growth trajectory. This growth is further emphasized by our high-profile participation in major industry events such as SiGMA Americas in São Paulo, SBC North America in New Jersey and SiGMA Asia in Manila as well as completing our integration with SOFTSWISS, supporting our communities and creating impact.

On the corporate social responsibility front, Meridian Group remains dedicated to making a positive impact. In the first half of 2024, we were actively engaged in various initiatives, setting us on excellent trajectory to exceed last year record of 225 CSR campaigns. Highlights include our “Scan. Help. campaign, which uses QR codes to fund essential equipment for our – for maternity hospitals in Europe; our participation in global efforts for flood relief in Rio Grande do Sul in Brazil; and our Betting Awareness initiative aimed at educating communities about our business and its potential risks. These efforts alongside donations to local children homes and environmental cleanups underscore our commitment to community support and sustainability.

This report is a snapshot of the positive impact we made in Q2 2024, reflecting our ongoing dedication to social responsibility. As we look ahead, we are excited to build on these achievements and continue strengthening our market position while delivering value to our stakeholders. We are confident that the strategic initiatives and investments we’ve made will keep driving our growth and success in coming quarters. Thank you all for continued support and for being part of this journey. Let’s keep this momentum going and move forward together. I will now turn you back to Brian.

Brian Goodman: Thank you, Zoran. I’d like to finish up by emphasizing our belief that we are extremely well positioned to capture the opportunities ahead of us and to maintain significant growth. It goes without saying that we have streamlined and transformed the company. And most importantly, we have a robust balance sheet with significant cash on hand. As at the 31st of July, we had over $40 million in cash, giving us the flexibility not only to be in a position to settle any current debt but also most importantly, we are in a position to make accretive acquisitions and to settle any derivative debt if the need arises. These quarterly results are just improving points of the expected consolidated results to come, and we are continuing to progress towards our targeted annual revenues of over $150 million per annum and adjusted EBITDA of over $13 million per annum by 2025.

As part of our strategy, we plan to continue to scale the company via acquisitions and by investing in new markets in order to expand our global footprint. We will continue to take a disciplined approach towards M&A as we have done to date, only planning to deploy capital towards profitable, cash positive and robust businesses. We have an extremely diversified business, what we believe are unmatched market positions as well as cross-platform capabilities. And we plan to focus on operational excellence, driving enhanced shareholder value, and we expect continued and sustainable double-digit growth with healthy margins. Our industry-leading talent across our business units and their disciplined and high-performance culture is no doubt one of the key to our success.

And as such, we will continue to invest in our talent. As I wrap up, I’d like to thank all of our employees for their ongoing hard work and dedication. In closing, I’d like to say that these quarterly results are a validation of our expected results to come, and I am very excited about the future. Thanks, everyone, for listening to our call.

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Operator: This concludes today’s conference call and webcast. You may now disconnect your lines.