Golden Matrix Group, Inc. (MRDN) Earnings

Management highlights

### Overall Financial Performance - Delivered the second consecutive quarter of GAAP profitability, with Q2 2026 net income attributable to Meridian Holdings of $2.2 million ($0.17 per diluted share), compared to a net loss of $2.6 million ($0.31 loss per diluted share) in Q2 2025. - Total Q2 2026 revenue was $50.2 million, up 16% YoY from $43.3 million. First-half 2026 revenue hit $100.3 million, the first half-year revenue over $100 million in company history. - Adjusted EBITDA grew 43% YoY to $5.9 million, with margin expanding 222 basis points to 11.8%. - SG&A expenses fell 8.5% YoY to $24.4 million even as revenue grew 16%, dropping SG&A as a percentage of revenue from 62% to 49%, highlighting strong operational leverage. ### Balance Sheet and Capital Strength - Net debt fell 65% YoY to $9.4 million, marking the sixth consecutive quarter of deleveraging. Net debt leverage stands at 0.39x annual adjusted EBITDA. - Total debt is down 62% from end of 2024, and interest expense is down roughly 80% YoY to $0.3 million, flowing directly to the bottom line. - Q2 2026 operating cash flow was $7.8 million, more than tripling the prior year period, funding debt repayment and internal investment without new capital raises. ### Meridian Bet Group Operational Highlights - Record customer demand metrics: new customer registrations over 516,000 (up 37% YoY), first-time depositors up 24% YoY, total deposit volume up 24% YoY to a record. - Back-end gross gaming revenue grew 37% YoY, casino gross gaming revenue grew 10% YoY on 27% higher casino wagering volume. - Expanse, Meridian Bet's proprietary game studio, grew revenue 138% YoY and gross gaming revenue 90% YoY. It now distributes nearly 90 proprietary titles across over 1,800 active sites, secured new market certifications in 4 new markets, and closed major new distribution and operator partnerships in the quarter. - Broad geographic growth: Europe (excluding UK) up 90% YoY, Africa up 55% YoY, Central/South America up 10% YoY; first-half 2026 Africa revenue is up nearly 50% YoY.

Guidance

- Management expects 8-10% constant currency full-year 2026 revenue growth year-over-year. - Consistent with historical seasonality, the fourth quarter of 2026 is expected to be the strongest quarter of the year, driven by a concentration of major sporting events and holiday period wagering activity. - Segment-level growth expectations: Meridian Bet is projected to grow 30-40 percentage points higher than the headline 8-10% overall growth rate, while the smaller legacy raffle and other non-core segments are expected to remain relatively flat.

Segment performance

1. Meridian Bet Group: Q2 2026 revenue of $35.8 million, representing 23% year-over-year growth, and contributed 71% of total company revenue. Segment operating income grew 91% year-over-year to $6.1 million. 2. Archings and Classics (core segment): Combined Q2 2026 revenue of $10.8 million, representing 4% year-over-year growth, and contributed 22% of total company revenue. 3. GMAG: Q2 2026 revenue of $3.6 million, which was flat compared to the prior year period. GMAG includes a B2B aggregation platform that deployed 2,382 new games (up 13% YoY) and added 3 new providers, plus B2C consumer-facing online casino Nextplay (Mexico), which grew Q2 revenue 31% YoY, registrations 50% YoY, and first-time depositors 53% YoY.

Risks & headwinds

- Transient short-term margin risk from favorable bettor outcomes: Q2 2026 revenue and margin came in modestly below internal expectations driven by unusually bettor-friendly results during the World Cup group stage (many favorite wins, high-scoring matches) and two large jackpot wins in the casino segment that compressed hold in the quarter. Management noted these are one-off result-driven variances that normalize over time, not signs of underlying demand weakness. - Regulatory risk for prediction markets: outside of markets where the vertical is already legalized, regulatory uncertainty remains, particularly in the U.S. where a change in rules could render the opportunity irrelevant even if it grows to a large size. - Retention risk for new customers acquired during the World Cup: conversion and long-term retention of new sign-ups from the World Cup tournament is a key near-term focus, especially in newer markets where brand awareness is still developing, and lower retention could impact long-term revenue growth. - Competitive pressure in the online gaming space requires continuous product investment to maintain market position.

Analyst Q&A

• Q: How does Meridian approach conversion and retention of the record cohort of new World Cup customers, and do recent marketing initiatives like the Brazilian brand ambassador and UFC Serbia sponsorship support these goals? /

  A: The World Cup generated ~170,000 incremental new registrations beyond the normal quarterly base, which is a long-term asset. Meridian uses an integrated cross-market marketing approach that leverages high-profile regional events and ambassadors to build excitement while lowering per-customer marketing costs. Both the Brazilian ambassador (with regional popularity in Southeast Europe and Brazil) and the sold-out UFC Belgrade event (drawing attendees from across Southeast Europe) align with this strategy, building brand awareness to drive conversion. International broadcast of the UFC event will include Meridian's branding globally per contract, and two participating fighters are already Meridian ambassadors, expanding the impact further.

• Q: With leverage now very low, will Meridian continue paying down debt absolutely, or focus on relative leverage improvement as EBITDA grows? /

  A: Management is extremely comfortable with the current net debt level of $9.4 million and 0.39x leverage, after 62% debt reduction since end-2024. Management prefers not to carry unnecessary debt, so will continue opportunistically paying down absolute debt while maintaining a fortress balance sheet to enable flexibility. Management will only consider re-leveraging in the future to fund high-return attractive growth opportunities if they arise.

• Q: What was the World Cup's impact on Q2 revenue, and will similar bettor-friendly outcomes impact Q3 World Cup final stage betting? /

  A: The World Cup contributed approximately one-quarter of total Q2 revenue, and represented 56-57% of all Q2 sports betting revenue. The group stage in June saw 4% margin (well below the normal 10-11% football margin) due to many favorite wins, but the knockout stage in July improved dramatically once lower-tier teams were eliminated, and no major operating markets had a national team advancing deep into the tournament, eliminating the elevated risk of emotional local betting. Any outcome in the later stages was broadly neutral for Meridian, and the overall World Cup sports margin of 6.2% was better than the pre-tournament expectation of 2-4%.

• Q: What is Meridian's strategic position on prediction markets, the fast-growing emerging vertical? /

  A: Meridian has operated legal prediction markets in three authorized markets for many years, and is currently improving its prediction market product. Management notes prediction markets are a strong organic marketing tool, as user-generated betting content cannot be matched by internal marketing teams. The future size of the vertical outside the U.S. remains uncertain; in the U.S., it is currently popular in states with no legal traditional sports betting, but faces large regulatory uncertainty—regulation could either allow it to grow dramatically or shut it down entirely, making the long-term trajectory hard to forecast.