Home Finance Galaxy Gaming records record revenue of $8.0m in Q1

Galaxy Gaming records record revenue of $8.0m in Q1

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Galaxy Gaming has reported an increase of 8.1% in its net revenue year on year to $8.0m in the first quarter.

In Q1, revenue was up across the GG Core segment and GG Digital at Galaxy Gaming. The GG Digital segment grew more than the GG core land-based division, even though the GG Core business is still the primary revenue source.

Galaxy reported an increase in operating costs and financial-related expenses for Q1. The revenue increase was so significant that the net profit increased as well.

Matt Reback, the president and CEO of Galaxy, praised the growth in both top- and bottom-line numbers. Reback is in his first quarter as Galaxy’s CEO, after taking over in November 2023.

Reback stated that both gross and net revenues were record-breaking, by a significant margin. Michael Ratner has been leading the product development team. In the next few months, I’m sure we will be able to share some exciting product innovations.

Since I joined Galaxy at the end of last year, this has been my main focus. “I am very proud of our product team’s progress.”

Revenue from recurring licenses drives Q1 growth

Reback also mentioned that Galaxy’s Q1 gross revenue reached a record quarterly level. Gross revenue for the quarter ending 31 March was $9.7m. This represents an increase of 18.3%.

89% of gross revenues came from license revenue that is recurring, an increase of 29.0%. The remainder of $805,193 came from perpetual licenses. This is a 36.5% decrease.

The net revenue for Q1 is $8.0m. This was calculated by subtracting the royalties from gross revenue. Net revenue in Q1 was $8.0m.

GG Core’s gross revenues increased by 19.2%, or $6.2m. The recurring license revenue increased by 38.5%, to $5.4m. However, the perpetual licence sales revenue fell 36.5%, to $805 193, which is noted in total gross revenues.

Net revenue for GG Core is $5.4m after subtracting $806280 of royalties from gross revenue. This represents a 3.9% increase over 2023.

Reback stated that “Our distribution of EZ Baccarat which began in September 2023 accounted for the majority of the growth in recurring licensing revenue in Core.” Also, our GOS product continues to gain momentum with over 100 installations, and development of GOS 2.0 continues on schedule for release later this year.”

GG Digital’s gross revenue jumped by 16.7% in the first quarter to $3.5m, all of which came from recurring license revenue. Net revenue was $2.6m after subtracting $852.528 of royalties from gross revenue. This represents a 15.6% increase.

Reback said that revenue in the igaming industry was up 16% on a net basis after subtracting royalties.

Galaxy’s core geographical region remains North America. Net revenue in the Americas topped $4.7m – a 4.4% increase. The group’s growth was more pronounced in Europe, Middle East, and Africa with revenues up by 10.0% in Q1.

Galaxy’s net profit increases despite increased costs

Total operating costs were $5.7m, 9.6% more than in the Q1 of 2009. Galaxy’s main expense was $4.2m in selling, general, and administrative costs.

In Q1, the finance-related cost was reduced by 3.1%, to $2.1m. Pre-tax profits reached $235,233 in Q1, more than twice the $116,269 of last year.

Galaxy reported a negative impact on foreign exchange of $30,394. It also paid more tax this year ($26,325). The bottom-line net profit, however, was higher than last year, at $178.514. This is a 40.2% increase.

The adjusted EBITDA for the third quarter increased by 2.8%, to $3.2m.

Galaxy hopes for full-year guidance

Galaxy’s performance could be affected by external factors even though the Q1 growth was positive. Harry Hagerty, the chief financial officer of Galaxy said there would be no changes made to its earlier guidance before Q2.

Hagerty stated that “our Q1 2024 earnings strongly support the guideline given by us when we announced our Q4 2020 earnings.” We will, however, wait to see Q2 results and have a better view of the second half before we consider any change in guidance.

As stated earlier, we assume that the economic downturn or pandemic in the Middle East and Ukraine will not have any impact on our business. This is a statement of forward-looking subject to the safe harbor language provided below.

The forecast was based upon the currency rates we saw in the fourth-quarter of the previous year.

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