Although Galaxy Gaming witnessed a substantial 18.8% rise in income for the year 2023, reaching a total of $27.8 million (£22 million/€25.7 million), the enterprise continues to operate at a deficit.
Despite the expansion of both physical and digital business earnings in 2023, Galaxy Gaming once again reported a net loss as expenses across various sectors also climbed.
Matt Reback, the company’s Chief Executive Officer and President, expressed general satisfaction with the mixed outcomes. Reback joined Galaxy in November, succeeding Todd Cravens who had led the organization since the middle of 2017.
In his analysis of the results, Reback emphasized the revenue growth as a significant positive for Galaxy. He also conveyed optimism about the company’s future prospects.
“We believe the strategic sale of perpetual licenses reached its peak in 2023,” Reback stated. “We are transitioning to a sustainable growth model, primarily driven by recurring revenue generated from our robust core and premium felt product portfolio, emerging GOS product line, and our online gaming business in 2024.
“I have now been with Galaxy for four and a half months, and I am very optimistic about the company’s future.”
The company is concentrating on achieving a substantial increase in revenue in the coming years through internal expansion and potential mergers. Their land-based operations are the main driver of their success.
In the current year, the company’s core land-based operations generated the most income, rising by a significant amount to $19.3 million. This increase was driven by sales of permanent licenses, which saw a dramatic surge to $3.7 million. New distribution agreements also contributed to this growth.
The company’s digital operations also saw an increase in income, although at a slower rate than the core business. Income grew from $8 million in the previous year to $8.4 million in the current year, a moderate increase. This growth was attributed to online customers expanding into new markets.
The Americas region generated $17 million in income, a substantial increase. The Europe, Middle East, and Africa region saw a slight decrease in income, dropping by a small percentage to $10.8 million.
Despite the increase in income, the company’s profitability was affected by higher spending. Operating costs increased by a significant amount to $21.1 million, primarily due to a substantial increase in sales, general, and administrative expenses.
Operating profit increased by a moderate amount to $6.7 million. However, higher net finance-related costs, reaching $8 million, resulted in a net loss.
The company encountered a financial setback, registering a $5 million deficit, which equates to a pre-tax loss of $1.7 million. This figure is slightly higher than the $1.6 million loss recorded during the same timeframe last year.
The company paid $79,228 in taxes but received a positive foreign currency translation adjustment of $51,612. This resulted in a net loss of $1.8 million for the year, which is comparable to the previous year’s performance.
Despite the overall loss, the company’s adjusted EBITDA showed a slight improvement, rising by 1.0% to $10.6 million.
The final quarter of the year mirrored the overall trend. The company only released some data for this three-month period, including a 6.4% increase in net revenue, reaching $6.7 million.
GG core revenue experienced a significant increase, growing by 18.0% to $4.6 million. However, GG digital revenue declined by 12.5% to $210 million.
The group reported a net loss of $820,000 for the quarter, in contrast to the $55,000 profit recorded in 2022. Additionally, adjusted EBITDA decreased by 10.0% to $280 million.