Galaxy Gaming has kicked off the year on a high note with financial results that paint a promising picture of growth and profitability. As the first quarter of 2021 unfolded, the company witnessed an impressive surge in revenue across its key business divisions—GG Core and GG Digital—with both contributing to record-breaking figures.
The GG Core division, which signifies Galaxy Gaming’s land-based operations, continues to be the stalwart of its revenue streams despite GG Digital’s eye-catching growth rates. This growth narrative in Q1 was captured by the enthusiastic commentary from the newly incumbent president and CEO, Matt Reback, who marked his first complete quarter at the helm since initiating his leadership journey in November 2023.
Reback’s statement highlighted an unprecedented increase in both gross and net revenue, underlining a period characterized by diligent product development spearheaded by Michael Ratner and anticipation of innovative product news in the near future. The galaxy team’s fervor was mirrored in the revenue metrics, with gross revenue scaling a new peak at $9.7 million—an 18.3% elevation from the previous year.
A more granular examination reveals that $8.9 million of the gross revenue arose from recurring license money, marking a robust 29.0% uptick. However, the income from the sale of perpetual licenses saw a significant downturn, declining by 36.5%. After factoring in royalties and other deductions from the gross revenue, the company still managed to post a net revenue of $8.0 million, illustrating healthy financial vitality.
Delving into segment-specific details, Reback shed light on the GG Core’s gross revenue, which expanded by 19.2% to $6.2 million. The lion’s share of this jump was attributable to the distribution of EZ Baccarat that debuted in September 2023, alongside the strategic progression of their GOS product, bolstered by over 100 installations and the continued on-track development of GOS 2.0, slated for release later in the year.
In contrast, GG Digital’s revenue portrayed a 16.7% jump to $3.5 million—all thanks to recurring license revenue. Post-deductions for royalties, this resulted in a net revenue of $2.6 million, up 15.6%.
The geographical revenue dissection revealed the Americas as Galaxy’s core market, where net revenue ascended to $4.7 million. This 4.4% growth, however, was outpaced by strides made in Europe, the Middle East, and Africa, where Galaxy experienced a 10.0% increment to $3.3 million in Q1.
Such financial feats did not come without increased expenditures. Total operating costs were up by 9.6% at $5.7 million, primarily driven by selling, general and administrative expenses. Finance-related costs, conversely, experienced a mild reprieve, shrinking by 3.1% to $2.1 million in Q1, bolstering the pre-tax profit to more than double the previous year’s figure.
Despite encountering higher taxes and a slight hit from foreign currency translation, Galaxy Gaming’s net profit rose by 40.2% to $178,514, and adjusted EBITDA saw a 2.8% increment to $3.2 million for the quarter.
With Q1 heralding success, financial officer Harry Hagerty projected a reserved optimism, indicating the company’s intention to withhold any adjustments to their guidance until post-Q2, attentive to the varied external factors that could bear upon their performance.
Galaxy Gaming, thus rounds off an encouraging financial quarter, predicated on innovation and growth, yet mindful of the potential unpredictability that the future holds. As the year progresses, all eyes will be on the developments that shape Galaxy’s journey in a dynamic market landscape.
