Results of Operations

Twelve months ended December 31, 2024, compared to the twelve months ended December 31, 2023.

Revenue Revenue increased by $58,122,011, or 63%, to $151,115,532 for the twelve months ended December 31, 2024, from $92,993,521 for the twelve months ended December 31, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $44,885,110 of revenues. Revenues from online casinos, online sports betting, retail casinos and retail sports betting also increased.

Cost of Goods Sold (COGS) Costs of goods sold increased by $37,793,114, or 153%, to $62,543,407 for the twelve months ended December 31, 2024, from $24,750,293 for the twelve months ended December 31, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $33,401,741 to COGS.

Gross Profit Gross profit increased by $20,328,897, or 30%, to $88,572,125 for the twelve months ended December 31, 2024, from $68,243,228 for the twelve months ended December 31, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $11,483,369 to gross profit.

General and Administrative Expenses (G&A) General and administrative expenses increased by $31,344,423, or 58%, to $85,828,421 for the twelve months ended December 31, 2024, from $54,483,998 for the twelve months ended December 31, 2023. The increase was primarily due to higher stock-based compensation, amortization expenses, salaries and wages, professional fees, and marketing expenses.

Income from Operations Income from operations decreased by $11,015,526, or 80%, to $2,743,704 for the twelve months ended December 31, 2024, from $13,759,230 for the twelve months ended December 31, 2023. The decrease was mainly due to the increase in general and administrative expenses.

Interest Expense Interest expense increased by $3,485,125, or 2,490%, to $3,521,288 for the twelve months ended December 31, 2024, from $36,163 for the twelve months ended December 31, 2023. The increase was mainly due to the amortization of debt discount and interest from new borrowings.

Foreign Exchange Loss The foreign exchange loss increased by $567,284 to $494,825 for the twelve months ended December 31, 2024, from a gain of $72,459 for the twelve months ended December 31, 2023. This was primarily driven by currency fluctuations.

Provision for Income Taxes The provision for income tax increased by $1,047,651, or 67%, to $2,618,367 in the twelve months ended December 31, 2024, from $1,570,716 in the twelve months ended December 31, 2023. The increase was mainly due to higher accrued tax expenses.

Net Income (Loss) Attributable to GMGI Net income attributable to GMGI decreased by $15,182,787, or 111%, to a net loss of $1,480,249 for the twelve months ended December 31, 2024, from net income of $13,702,538 for the twelve months ended December 31, 2023. The decrease was mainly due to the increase in general and administrative expenses, foreign exchange losses, and interest expenses.

Table: Consolidated Results of Operations

The company’s operating results are difficult to forecast, and its prospects should be evaluated in light of the risks, expenses, and difficulties commonly encountered by comparable development stage companies.

Cash Requirements, Liquidity and Capital Resources

As of December 31, 2024, the company had $30,125,944 of cash on hand and a working capital deficit of $18,484,062. The company believes its cash on hand is sufficient to meet its current working capital and capital expenditure requirements for at least the next twelve months.

The company’s material cash requirements include debt obligations, consideration payable to the former owners of MeridianBet Group, and a possible holdback payment related to the acquisition of RKings. The company may need to raise additional equity or debt financing in the future to fund its operations and repay outstanding debt.

The company generated $23,916,426 in cash from operating activities during the twelve months ended December 31, 2024, primarily due to non-cash expenses such as stock-based compensation, amortization, and depreciation. Cash used in investing activities was $37,434,035, mainly for the acquisition of MeridianBet Group and Classics. Cash provided by financing activities was $27,712,266, primarily from proceeds of new loans and borrowings.

Adjusted EBITDA

The company presents EBITDA and Adjusted EBITDA as non-GAAP financial measures to provide additional information to investors. Adjusted EBITDA, which excludes stock-based compensation and restructuring costs, was $22,193,562 for the twelve months ended December 31, 2024, compared to $21,248,278 for the twelve months ended December 31, 2023.

Table: Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss)

Critical Accounting Policies and Estimates

The company’s critical accounting policies and estimates include those related to transactions, assets, liabilities, and obligations stated in foreign local currency and their conversion to US currency, as well as stock-based compensation. The company recently adopted ASU 2023-07 related to segment reporting disclosures.

In summary, the company experienced significant growth in revenue and gross profit in 2024, primarily driven by the acquisition of Golden Matrix. However, this was offset by a substantial increase in general and administrative expenses, leading to a net loss for the year. The company maintains a strong cash position and is exploring additional financing options to fund its operations and growth initiatives going forward.