Meridian Holdings: Growing Small-Cap Trading Below Peers!

While people have always loved gambling, the way the industry operates has changed immensely in the last hundred years.

The rise of the internet and smartphones is driving unparalleled innovation in the casino industry!

Casino services suppliers such as Evolution are developing innovative casino games and Las Vegas-like game shows. Whilst online casinos are quickly becoming much larger than the established brick-and-mortar casino giants.

At the same time, the trend of online casino and sportsbook legalization is continuing. More and more states in South America, Asia, Africa, and the US are implementing new regulatory frameworks.

This creates an opportunity not only for the large and established players but for smaller upstarts. Gaining ground in fast-growing and quickly legalizing emerging markets could deliver meaningful market share gains in a relatively short amount of time.

This is exactly the kind of opportunity that Meridian offers!

Over the last 20 years, they have made a series of mergers and acquisitions that have transformed the company into a full-service iGaming enterprise with a strong online casino presence in Europe, Mexico, Brazil, Nigeria, and more.

Their largest and most important acquisition was finalized in 2024, when Golden Matrix merged with a Serbian gaming company, MeridianBet, for $330M!

At the time of the deal, Golden Matrix was worth around $80M, so this was essentially a reverse merger with Meridian getting most of the shares in the combined Nasdaq-listed entity. As Meridian constitutes the majority of the combined company’s operations, it was just revealed that the Golden Matrix is changing its name to Meridian Holdings Inc.

Today, the combined company is worth only $87M, as the share price has fallen 70% in the 12 months. This is largely the result of investors still digesting the unification. The new company is a completely different beast from what Golden Matrix was.

New name, new leadership, and new growth strategy.

As a result, Meridian trades for a TTM P/S of 0.5 and EV/FCF of 4, despite 2026 analyst consensus revenue growth sitting at 17%.

This is a significantly lower valuation multiple than many of its peers, which are not growing as fast as Meridian. This suggests the company may be undervalued.

In this report, I will look at what is driving this stock’s underperformance, how Meridian is executing on the new growth strategy, and analyze the market concerns to see if they are valid.

Furthermore, I will explain their business model, analyze financials, look at the growth opportunities, and create a 2030 Valuation Model.

Disclosure: This is Issuer-Sponsored Research

Let’s begin.

1. Business Model

The company’s business model is actually what piqued my interest last summer when I first heard about the company, as they offer a unique blend of B2B and B2C gambling services.

Some of you might be familiar with Evolution, the Swedish provider of gambling software and services to online casinos. Online casinos outsource the boring and tedious tasks, such as live dealing and game development, to Evolution.

Online casinos such as PokerStars, DraftKings, FanDuel, Caesars, and Holland Casino operate the front end, acquiring customers, providing customer service, managing customer funds, and paying out the winnings.

Meridian combines the two ideas!

It provides software services and games to online casinos whilst at the same time running some online casinos itself.However, while there is some overlap, Meridian doesn’t compete much with Evolution, as their services are a bit different.

Let me explain.

1.1. B2B

On the B2B side, Meridian is an enterprise SaaS company offering various solutions to casino operators.

Under its GMAG division, they provide infrastructure software that enables online casinos to operate!

Essentially, whilst Evolution does the front-facing work of offering live dealer and casino game services, GMAG does the behind-the-scenes grunt work.

• Tech backend

• Compliance

• Payments

• Game aggregation and integration

• Customer relationship management

• Marketing tools

Running casinos might seem simple, but there is a lot of tech backend work that needs to be done to have a successful business and avoid customer experience issues. The company handles cloud hosting, cybersecurity, database management, transaction tracking, wallet infrastructure, and more for its clients.

Furthermore, the GMAG also provides help with compliance, helping casinos manage payments, know-your-customer and anti-money laundering regulations, and anti-cheating/fraud services.

But most importantly, GMAG provides gaming integration and aggregation services to online casinos. Evolution might be the most well-known, but there are hundreds of suppliers of online casino games. It would be incredibly difficult and time-consuming for both the supplier and the online casino to manually negotiate an agreement for each game. Also, as there are thousands of games, game discoverability would be quite complex. So instead, many of these suppliers work with GMAG, which aggregates games and then offers them to its online casino clients.

Online casinos benefit from having access to thousandsof games, a faster and simpler negotiation and integration process. Whilst game developers benefit from having a broader distribution for their games.

Next, after an online casino has built most of its business through GMAG, the company also provides a full set of customer relationship and marketing management tools that help the casinos increase revenues. Custom bets, promotional offers, emails, and soon, AI-driven personalization. The company said that they are working on tools that will analyze a gamer’s behavior and offer customized and personalized gaming experiences.

The GMAG division primarily serves regulated and unregulated markets in Asia. The final responsibility to apply for gambling operating permits lies with the operator, not GMAG.

There is a risk to this segment if certain jurisdictions in Asia implement stricter gambling enforcement. However, the overall trend is for online gambling to be legalized in more territories, not less.

This segment reported revenues of $14.5M in 2025!

In Q2 and Q3 of 2025, revenues for this segment decreased by 21% and 18%, respectively. However, the decline moderated in the second half of the year, with overall 2025 revenues still up 16% thanks to a strong Q1.

This underperformance was explained by reduced usage of several key customers due to increased competition. To counter that, the company is investing in improving the range of products offered.

While this segment has had a slow second half of 2025, others have performed better, with Expanse Studios performing exceptionally well.

Expanse Studios is Meridian’s in-house iGaming development division that was one of MeridianBet's subsidiaries.

Unlike Evolution, Expanse doesn’t offer live dealer games or live game shows.

Expanse exclusively focuses on digital game development!

• Slot machines

• Table games

• Crash games

• Localised games

New versions of classic slot machine games with an added twist. Digital table games such as poker, blackjack, roulette, dice, and more.

Crash games are a new genre of online casino games that are simple, fast-paced, and built for mobile gaming. These “less sophisticated” games are exceptionally popular with young people in emerging markets.

Most importantly, Expanse has the capabilities to localise games. The same game mechanics can be used in Brazil, Nigeria, and the Balkans, with minor adjustments that make the game more popular with local audiences. Character skin colour can be changed to better represent the population, basketball becomes football, tomato becomes a mango, etc.

Here, Expanse competes in a crowded field of competitors (Evolution), but being part of a larger group gives it competitive advantages!

First, GMAG can help Expanse distribute its games cheaper. Fees that normally go to a 3rd party aggregator stay in the group, giving Expanse a cost advantage.

Second, having a direct relationship with an aggregator gives them a data advantage. GMAG platform managed $4.7B in wagers in 2024. This gives them visibility into which games generate the most revenue and can use this information in game development to develop more engaging games.

Third, their own online casino platforms, such as MeridianBet, are great places to place Expanses’s games. This gives them an additional and guaranteed distribution layer.

So far, the results have been excellent.

In 2025, Expanse active players grew 282%. This is an incredible growth that demonstrates this division’s potential.

In Q4 2025, gross gaming revenues (GGR) grew 322% Y/Y, whilst overall revenue jumped 435%!

As of Q4 2025, their games are available in 1,344 gaming sites, an increase of 630% Y/Y.

Gates of Olympia is their new flagship game.

This is a 6×5 slot game where symbols fall into place, enabling players to win random multipliers and free-spin bonuses that can stack to win big payouts. It’s popular because it’s easy to play, fast-paced, flashy visuals, and a chance at massive multiplier hits create high excitement and strong player engagement.

Essentially, the company provides a white-label, turnkey platform that allows online gaming operators to run many aspects of their business and scale it with new games and customer engagement tools!

The value proposition of their combined B2B offering is clear:

• Speed to market

• Lower operating costs

• Lots of content

Using Meridian’s tools, the only thing that a prospective online casino operator needs is funding and operating licenses. Once that is secured, they can quickly build their online casino, significantly lowering the time to market.

By not having to build all the back-end from scratch, client start-up costs and operating costs are reduced. This enables them to reinvest more capital in compliance, customer acquisition, and marketing.

Meridian can instantly offer them thousands of online casino games, from Expanse or other studios.

There are many ways in which the company extracts value from its customers.

For the use of its software, online casinos pay a licensing fee, which can be a monthly or yearly subscription depending on what’s negotiated.

In the casino game business, developers often get a revenue share of the casino operators’ GGR, which is then shared with the game aggregator. Which, in the GMAG case, is the company itself.

For some games, GMAG negotiates a wholesale distribution price and then adds a markup when the games are sold to casino operators.

1.2. B2C

In the B2C category, the company owns a few online gaming offerings.

• Classics for a Cause

• RKings

• Mexplay

• MeridianBet

Let’s expand on each.

Classics for a Cause is an Australian car giveaway platform that the company owns 80% of. This is a small segment, which generated $2.3M in revenues in Q4 2025 and $8.7M in 2025.

Essentially, people buy tickets and subscriptions for raffles in which old classic cars can be won.

RKings is a raffles website operating in the UK and Ireland. The concept is similar to Classics, as participants have to buy tickets to participate in specific competitions. While cars seem a big draw, people can compete for other prizes as well, such as a PS5, electronics, vacations, and more.

RKings is a much larger segment than Classics, generating $9M in Q3 2025, an increase of 2% Y/Y.

While there is a potential to expand the concept of Classics and R Kings by increasing the number of items and bringing the brands to new markets, these offerings don’t seem that particularly interesting to me due to their smaller size and slower growth.

With Mexplay, we finally get to the juicy part of the B2C business of Meridian.

As the name and the picture would imply, this is a Mexican online casino and sports betting website. The Mexican online casino market has a lot of potential, as there are comparatively few online casino operators. This is due to a very complex and confusing legal operating framework.

In 2025, player registrations increased by 84.5% to 162K.

First depositors reached 15.7K, up 74.2%.

Meanwhile, revenues grew by 51.9% to $2.27M!

While this is still a small segment today, using Expanse Studios games, GMAG operating technology, and the operating know-how of the MeridianBet team, Mexplay could become a meaningful business.

MeridianBet is the group’s largest and most important brand, which operates in Serbia, Montenegro, Bosnia & Herzegovina, Malta, Cyprus, Kenya, Tanzania, Nigeria, South Africa, from 2025, Brazil, and others.

The company offers quite a diverse set of services.

• Retail sports betting locations

• Small retail casinos

• Online sportsbook

• Online casino

Most developing countries are cash-first societies. This means that retail sports betting locations are a must to gain market share. Furthermore, these retail shops are often located directly in neighborhoods where people live, creating marketing opportunities and driving brand loyalty.

MeridianBet has over 740 retail betting shops!

Furthermore, in more developed markets such as Malta, and Serbia, online sportsbook operations are growing very quickly. This is driven by a rising mobile adoption and improved internet access.

But as internet access and mobile penetration in other emerging markets expand, online casinos are becoming increasingly popular.

In Q4 2025, Meridianbet performed well, growing revenues by 15% to $35.2M.

Overall in 2025, this segment reported revenues of $124.6M, generating 68% of the group’s total revenues, and being a strong profit driver with a gross margin of 70%.

Most importantly, new user growth is incredibly strong, as new registrations jumped 63% whilst first deposits grew 38.6%!

New user growth is a strong future revenue growth indicator. This clearly suggests that expansion in Brazil and Africa is going well.

As of Q4 2025, 341K active players use the platform, an increase of 28.8% Y/Y.

Furthermore, Meridian is the lead sponsor of the basketball club Red Star Belgrade!

Red Star is the most famous and storied basketball club in Serbia and the Balkans, with millions of fans. The club is a regular performer in the highly popular Euroleague (sort of European Champions League, but for basketball). These games provide Meridian with incredible visibility, attracting new players to the platform.

2. The Opportunity

The management has said in an interview last year that it believes that the company has the potential to become a $1B market cap enterprise. That is a very ambitious long-term aspiration that will require a lot of execution.

Let’s look at the opportunities that could help them achieve that.

2.1. The US Expansion

Expanding to the US is the ultimate prize, and this could be the biggest reason why MeridianBet merged with Golden Matrix.

The US is the world’s biggest economy, with the largest and richest middle and upper classes!

Furthermore, the country is currently undergoing a generational transformation, with online gambling getting legalized in more and more states.

As we can see in the picture above, online casinos are only legal in a handful of states in the northeastern US. Yet, this hasn’t stopped DraftKings from reaching a market cap of $11B!

As of today, only 40M people in the 7 states have access to online casinos. It is not legal in any of the major states, but that is likely to change in the years to come. Many state finances are not great, and additional tax revenue from online gambling could provide a welcome boost to state coffers.

Currently, there are active legislative procedures that could legalize online casinos in a few years in Maryland, Illinois, Indiana, and Wyoming. If that happens, around 26.5M people will gain access to online casinos.

Additionally, there have been some early discussions to maybe legalize online casinos in New York, Massachusetts, Ohio, Virginia, and other states. In these states, there is still a lot of uncertainty, so in the best-case scenario, it would be 5 or more years before operations can begin.

In any case, it seems the winds are shifting, so it is likely that in the next decade, there will be many US states that will legalise online casinos, possibly even tripling the TAM for online casino operators if any of the major states legalise.

As I understand, the company is deep in the process of acquiring a B2B license in New Jersey and Ontario, Canada.

The US and Canadian B2C markets are very competitive with high customer acquisition costs. This is because the industry is still relatively new, and there is a lot of funding from investors who hope to capture market share.

By serving the B2B market, Meridian is aiming to avoid this extreme B2C competition.

Despite that, because of the sheer size and growth of the market, there is a lot of potential on the B2B front.

2.2. Emerging Markets

Emerging market economies are a very attractive growth opportunity for Meridian. Many of these markets, such as Brazil, Mexico, and Africa, have recently simplified legal frameworks, making it easier for online casinos to operate.

At the same time, these are some of the fastest-growing economies in the world, with millions of people forecast to escape poverty and enter the lower and middle classes!

As people’s income grows, they seek new entertainment methods, and online gambling is increasingly becoming very popular.

Key reasons that make emerging markets attractive include:

• Large young populations

• Growing internet penetration

• Growing mobile access

• Sports obsessed

• Lower competition

Most of the large and established gambling companies focus on developed economies, because that is where the total revenue potential is the largest. However, this invites strong competition from well-capitalized players. That is not the case in emerging markets, where there is an opportunity for new regional leaders to emerge.

Analysts at Grand View Horizon forecast that the Brazilian online gambling market will grow with a 12.3% CAGR to reach $3.9B by 2030!

MeridianBet entered this market at a perfect moment, just in time for the 2026 FIFA World Cup. Brazilians love football almost as much as Jesus, and next year it will happen in the US, Mexico, and Canada, the same time zones as Brazil.

I have no doubts that sports betting volumes will break new records.

As we can see in the graph above, similar growth can be expected from the Mexican online gambling market.

Experts at Spherical Insights forecast the market to grow with a CAGR of 15.64%, reaching $3.89B in 2033!

Next, looking at Africa, while the whole industry is projected to grow more slowly, a large share of the growth will be driven only by a few countries.

Per the forecast of Astute Analytica, the African gambling market is expected to grow with a 7% CAGR till 2032, reaching $11.27B!

With its presence in Nigeria, Kenya, Tanzania, and South Africa, Meridian is exposed to the largest and fastest-growing markets.

2.3. Expanse and GMAG

At this scale, the combination of B2B and B2C services generates strong synergies with no conflicts of interest. GMAG is largely an Asian business, and Expanse has yet to expand there meaningfully.

But once Expanse scales into Asia, becoming a significantly larger enterprise, questions regarding conflicts of interest could arise.

GMAG is financially incentivized to promote Expanse’s games as it keeps all of the fees the games generate. Will other game developers GMAG aggregates be ok with it? At what point will they begin complaining or leaving GMAG?

Moreover, why would Expanse offer its best games to MeridianBet’s direct competitors? That would help them succeed. However, at the same time, if Expanse doesn’t give its games to the Meridian B2C competitors, it is leaving money on the table.

For these reasons, it could be possible for GMAG and/or Expanse to be sold.

The company will use the synergies of data sharing, distribution, and scale to grow these B2B segments as large as they can before issues arise. Then GMAG could be sold to another aggregator, whilst Expanse to Playtech, Evolution, or anyone else.

In a few years, under good conditions, these segments alone could be worth the entire current market cap of Meridian Holdings!

Earnings from this sale could be used to acquire other B2C operators.

3. MeridianBet Merger Rationale

I think it would be useful to discuss the rationale behind the merger between Golden Matrix and MeridianBet.

Some readers are probably thinking:

Why did MeridianBet owners merge with a much smaller US-based company, mostly for equity?

They were making millions of dollars in pure profit in the Balkans, why bother?

I think there are a few reasons.

Being a publicly listed US company comes with a certain level of legal, operational, and reputational advantages!

A US company applying for a gaming license or seeking banking, payment processing, or other services will have an easier time than a Serbian one.

I just said that the US is a huge opportunity.

Despite the improving economy, it would be incredibly difficult for a small, private Serbian online casino operator to get a US casino license.

However, a Nasdaq-listed US-headquartered gambling conglomerate largely owned by MeridianBet Serbian shareholders would have an easier time getting a license.

Moreover, being part of a US group enables Meridian to scale by reinvesting earnings at higher returns.

The company now has access to the US capital markets. As they have aggressive expansion plans in both B2B and B2C verticals, new funding will undoubtedly be needed. Now the company can issue new shares to pay for mergers, or raise debt from US funds and banks.

Making millions in profit in the Balkans is great, but it also comes with a ceiling. Equity in a public company gives founders exposure to potentially much larger upside.

Essentially, they are trading steady regional dominance for global opportunity.

The merger was closed in April of 2024, whilst the Brazilian operating license was approved in January of 2025. It could be that the merger with Golden Matrix was a crucial step that helped MeridianBet secure that operating license.

4. Key Causes Behind the Sell-Off

While the rationale behind the merger sounds great and makes sense in theory, unfortunately, the US capital market has so far disagreed!

As you can see in the graph above, the stock is down 70% in the past 12 months and now sits at a market cap of around $87M.

Essentially, here is why the stock is currently depressed and could be undervalued:

• Insider selling

• CEO’s departure

• Integration

• Financing risk

• Dilution

• Prediction markets

First, investors really dislike insider selling.

Company executives have insight into day-to-day activities and non-public information. When they sell shares, that is interpreted by the market as a negative signal, as the presumption is that they are acting on deteriorating business fundamentals. Mr. Goodman, the previous CEO, has been selling shares since June 2025 and has continued to do so despite a significant fall in the share price.

The market doesn’t view a CEO selling as the stock continues to go down as an indicator of confidence!

This is even doubly so for a small-cap stock that just underwent a large, company-changing merger. Especially when the reason for sales is not explained, as I couldn’t find any commentary from Mr. Goodman.

This could have been a factor that led to Mr. Goodman stepping down from his position as the CEO of the group.

On December 12, 2025, he was replaced by the Chairman of the Board, William Scott, who became interim CEO. If I understand correctly, the company is currently in the process of finding a permanent CEO.

Moving on, the MeridianBet owners would have hoped that the combined company would have a market cap of around $410M ($330+$80M). But the market is assigning a significant discount not only due to the CEO turnover, but also due to integration risks. Combining a large multi-continent business is not easy, problems happen.

Moreover, as part of the acquisition agreement, MeridianBet owners were awarded $70M in post-closing considerations.

As of Q4 2025, $25.7M have already been paid in cash, while $28.1M was paid in shares.

Which means about the $16.2M of the acquisition debt remains.

So the company will probably soon announce how this will be settled, cash or shares.

The conversion of debt into equity has diluted public market shareholders, further worsening the sentiment.

As you can see in the table above, the total number of shares outstanding has increased by 25.6% to 12.64M shares since the acquisition was closed as a result of debt conversions.

Lastly, the rise of prediction markets has caused a sell-off in all online gambling stocks.

We are in a bit of a funny situation. Prediction markets companies vehemently deny that prediction markets are gambling, claiming that these are financial derivative futures contracts. However, this is clearly nonsensical, as the majority of the contracts are sports-related. At the same time, as prediction markets deny the gambling aspect, investors of regulated gambling companies sell their shares out of fear of market share loss.

If it quacks like a duck, it is a duck.

Now that we have discussed the narrative behind the sell-off, let’s look at each point and assess its severity.

First, the insider selling.While the CEO was selling, other insiders were buying. For instance, group CFO Richard B. Christensen has been buying at regular about 1,000 share increments since May 2024, and as of November 2025, per FiscalAI data, owns 12.5K shares.

As the CFO, he clearly knows the finances inside out, and likely believes the company is undervalued.

Another point is that Meridianbet owners, merger debt holders, chose to convert their debt into equity, a sign of confidence in the business, as they could have demanded cash.

Second, a search for a new CEO. Mr. Goodman was instrumental in building the legacy Golden Matrix Group into an $80M company, however, now the vision is completely different.

The new name symbolizes this shift in strategy.

The scale and the core of the business of Meridian Holdings have shifted from a regional, majority B2B player to a global, majority B2C player. It makes perfect sense to have a new face with a different set of skills to execute on this new strategic vision.

Third, the interim CEO, William Scott, confirmed in an interview that returning to profitability is a priority in 2026, and the majority of the expensive integration costs will be behind the company.

Moving on to financing, there is a clear focus on paying down debt.

As you can see in the chart above, key liabilities peaked at $110M in Q3 2024, right after the merger. Since then, they have been reduced by $47M, $25.7M with equity, and around $21.3M with cash. With a 2025 OCF of around $25M, Meridian could pay down all its key liabilities in 2 years. Thus, the financing concern does not seem valid.

Next, dilution. While it is likely that there is some dilution left, as the $16M acquisition debt still needs to be paid, this will be it. Once this debt is clear, dilution won’t be an issue. Meridian is not an SBC-heavy company that only lives to reward shareholders (Snap). In 2025, they paid $4M as SBC, just 2.2% of revenues. The low valuation, TTM P/S of 0.5, and EV/OCF of 4 already more than compensates for the dilution risk.

Lastly, prediction markets.

They are 100% gambling and will eventually be regulated as such.

Prediction markets are only gaining ground because of the regulatory loophole. Just a few months ago, the government of the Netherlands issued swift warnings of high fines if Polymarket didn’t immediately stop accepting bets from the Netherlands. Other countries are following suit as they don’t want to miss out on the tax revenue that regulated gambling generates. Prediction markets are largely a US phenomenon, and I find it unlikely that they would meaningfully impact MeridianBet’s core casino offerings in Europe, Africa, and Brazil.

Furthermore, Meridian already has the customer relationship and betting technology. They have already rolled out some prediction market-style bets on real-world non-sporting events.

The company has a product called Free Bet, where bettors can create custom bets on various real-life non-sports events, and Merdian proposes custom odds for this event. Bets on the US and Hungarian elections were highly popular.

If the demand for these types of bets increases, they can easily expand in this arena.

But most importantly, prediction market bets have little impact on high-engagement sports betting and online casino games, as prediction markets are simple one-sided bets.

A regular sports bettor likes to make parlays and various other combo bets, which is not possible on prediction markets. I also don’t see how prediction markets could replace engaging online casino games such as Expanse’s Gates of Olympia.

Overall, while there are some real issues affecting Meridian’s stock market downturn, they don’t have the severity to warrant a 70% sell-off!

5. Financial Analysis

With the stock down 70%, one would think that this is a struggling company, but looking at the finances, we clearly see that isn’t the case.

Q4 2025 and FY 2025 Results:

• Revenues of $49.6M +8.1% Y/Y, $182.9M +21% Y/Y

• Gross profit of $28.5M +6.4% Y/Y, $103.5M +16.8% Y/Y

• EBITDA of -$89.6M, -$81M*

• Adjusted EBITDA of $4.6M -29% Y/Y, $19.4M -11.7%

• Net income of -$86.7M, -$89.9M*

Cash situation:

• Operating cash flow of $8.2M -50.6%, $25.4M +6% Y/Y.

• Free cash flow of $6.5M -52% Y/Y, $19.2M +14.5%.

• Cash and equivalents of $18M -40% Y/Y (paying down debt)

While the company is GAAP unprofitable, the 2025 trajectory results clearly indicate that they are on the right path to achieving profitability in 2026.

There are 4 main reasons why Meridian is unprofitable:

• Impairments *

• Merger integration costs

• Interest costs

• Investments to expand in the US and Brazil

The biggest reason for the high GAAP net income loss is the merger-related impairment of goodwill and intangible assets!

When a business gets acquired, it is usually for a premium to the accounting value of its net assets. Let’s say that a business with $60M in assets and $15M in liabilities gets acquired for $100M. In this example, the acquirer paid $100M for a business with $45M in net assets.

In such situations, the acquirer records the difference between the purchase price and the net asset value of the acquired business as goodwill on the consolidated balance sheet. So in the example above, it was $55M. Companies pay a premium to the accounting value of net assets because they expect earnings growth to justify it.

However, US GAAP requires yearly tests to assess whether that goodwill position is appropriate. Rules require that the goodwill position be reduced in certain situations when the share price goes down, interest rates increase, or some business units underperform. This reduction appears on the income statement as a loss.

As of Q3 2025, Meridian had $129M of goodwill and other intangible assets on the balance sheet.

The company recognized a substantial $91.8M impairment charge in Q4 2025, primarily due to higher interest rates and a decline in the company's stock price, which lowered the fair value accounting.

$63.4M of the impairment relates to the acquisition’s goodwill and $28.4M to other intangible assets.

This is a non-cash accounting entry, meaning it does not impact the company's actual bank balance or daily operations.

Though it significantly reduced reported net income for the year. Long-term, this write-down aligns the book value of the company’s assets more closely with current market realities, potentially reducing future depreciation expenses.

While the remaining $35M in intangibles is currently looking stable, further impairments remain a risk if the company fails to meet the results warranting such a position. Per accounting standards, another impairment test will be done in Q4 2026.

These impairments, while disappointing, don’t change the core investment thesis of the company as they mostly affect the less interesting parts of the business.

The bull thesis lies in the core Meridian segments, Meridian online casinos, Mexplay, and Expanse. These segments are growing well, delivering improved financial results.

During the first 9 months of 2025, before the impairments, Meridian spent about 58.3% of its revenues on SG&A, compared to 56% in the prior year. This is directly because of the high integration costs. If the SG&A ratio had remained the same, the company would have spent $3M less here.

Next, in the same period, interest costs more than tripled from $0.8M to $3.5M, a swing of $2.7M.

Without these 2 merger related swings in costs, the EBIT would have been $5.7M larger, compared to the 9M 2025 EBIT loss of $2.8M.

Lastly, the company is now investing aggressively to expand the B2C business in Brazil and the B2B in the US. While they haven’t disclosed specifics, both ventures have likely cost millions of dollars, and it will take time before these investments lead to higher earnings.

Net leverage ratio now sits at 0.86 compared to 1.5 in Q2 2025

Meridian is undergoing a steady and necessary transformation, whilst delivering strong operating growth in its key growth segments.

It is clear that there is a meaningful disconnect between the share performance and financial results!

The share price action would imply a collapsing business, but that is not the case.

5.1. Segment Performance

Let’s look at which segments drove this performance.

While 2025 total group revenues grew by 21% Y/Y:

• Online casino grew by 26.6% to $53.8M.

• Online sports betting grew by 12.3% to $42.2M.

• Retail casino grew by 8% to $25.1M.

• GMAG, R Kings, and Classics grew by 29.9% to $58.3M.

The GMAG, R Kings and Classics segment performance looks better than it actually was because Classics was acquired in August 2024, so its performance was not consolidated in the first half of the year, making 2025 results look stronger.

For instance, in Q3 2025, R Kings revenue increased by 1.7%, GMAG declined by 17.7%, whilst Classics grew by 11.3%. Individual segment performance for Q4 2025 was not disclosed.

It is clear that the core online and offline casino and sports betting segments are doing the heavy lifting, while the legacy Golden Matrix segments are underperforming.

5.2. Regional Performance

Now that we know which segments are driving this growth, let’s look at the regional performance.

While 2025 total group revenues grew by 21% Y/Y:

• Europe ex UK, the largest region, grew by 14.5% to $102.5M.

• The UK grew by 26.2% to $35.1M.

• Africa grew by 22.9% to $15.5M.

• Central and South America grew by 66.6% to $8.9M.

• Australia grew by 89% to $8.7M

• APAC grew by 8.8% to $12.2M

In short, the core market of Europe and the growth market of Africa demonstrated strong and resilient growth as the 2025/2026 sports season began.

The new emerging region of the Americas demonstrated incredible growth.

Meanwhile, Australia’s growth was strong, in large part due to the integration of Classis in mid 2024.

Lastly, APAC underperformed largely because of the GMAG segment.

6. Valuation

A market cap of $87M, 2025 revenues of $183M, and adjusted EBITDA of $19.4M implies that the company is trading for 0.5x P/S and 4.5x EV/ADJ EBITDA.

That compares favorably to competitors.

In the above picture, you see the P/S, EV/EBITDA, and revenue growth of some key gambling companies.

Flutter trades for 2.5x the Meridian’s P/S multiple and 3x the EV/EBITDA multiple, despite comparable revenue growth.

Meanwhile, Draftkings are signficiantly more expensive than Meridian, despite growing top-line only slightly faster.

Looking at a few years in the future, the analyst consensus 2028 estimate revenue sits at $279.6M and EBITDA at $50.4M.

Implying a 2028 P/S of 0.3 and EV/EBITDA of around 2!

A key catalyst that could bridge the valuation gap between peers is GAAP net profitability. Once that is reached, Meridian will begin to appear in stock screeners that demand it.

As a small-cap with a market cap below $100M, the company is hard to discover in a sea of thousands of publicly traded companies. Screeners are a crucial tool that investors use to discover such companies.

If the current financial trajectory continues, that could happen after Q4 2026 results.

And institutions are front-running this possible catalyst.

As you can see in the chart above, per

Fintel.io

, while there was a small decrease post Q4 2025 results, overall institutional ownership has been growing steadily as the share price has gone down, up from 1.5M shares in August of 2024, to over 6M by April 2026.

Smart money is seeing value here!

7. Valuation Model

Let’s build a quick valuation model.

It is hard to adequately estimate the growth of the RKings, Classics, and GMAG segments. So, I am going to model a modest 5% CAGR.

For Meridian, they reported $5.33M in revenues from Latin America in 2024, so I am assuming that all of it relates to MexPlay and the recent entry into Brazil.

Meridian, excluding Brazil and Mexico, I model them growing with a 9% CAGR till 2030. This mostly consists of the core business in Europe and the expansion in Africa.

Regarding Mexico and Brazil, I model a rapid expansion, reaching revenues of $68M in 2030.

As per the 2030 forecasts, the Mexican industry would generate $2.52B in revenues, the Brazilian $3.9B. So to get revenues of $68M, Meridian would only need a market share of 1.1%. This is a very reasonable and achievable market share target.

In such a scenario, total revenue could reach $312.6M, a CAGR of 11%!

Modeling the operating margin reaching 14%, and tax, interest, and other expenses of 30% of operating income.

Net income could reach $31M in 2030, a margin of 9.8%!

Next dilution. I am going to model 15.168M shares outstanding in 2030, an increase of 20% in 5 years. This assumes that a significant portion of the remaining $16M acquisition debt gets converted into equity.

If the Meridian trades for a P/E of 15-20, we could be looking at $460-613M market cap company and a $30-40 stock in 2030.

That would be an upside of 342-490% from today’s share price of $6.85!

Discounting it back at 15% per year to calculate a fair value per share, we get $15-20, implying that currently the company might be trading for a 55-66% discount to its fair value.

8. Conclusion

So, in conclusion, Meridian appears to be undervalued compared to what its peers are trading at. As the valuation model showed, there is further potential for strong upside.

But execution is the key!

• Integration needs to go smoothly, and operational synergies must be achieved.

• Legacy markets in Europe must continue to grow.

• The company shouldn’t experience any issues in Africa, Brazil, or Mexico.

If that happens, Meridian Holdings could make its shareholders very happy.

The company has gone through a transformation, from a largely B2B driven to B2C. The synergies that this vertical integration can deliver have yet to be realized by the market.

Additionally, I was not very optimistic regarding the GMAG, Classics, and RKings segments. If these segments perform much better than I expect, there could be an additional upside.

However, as always, investing in small caps comes with additional risks, and this is not a guaranteed slam dunk.

Nevertheless, the business does look promising.