Meridian Q3 2026 Earnings Call Transcript

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Provided by Quartr
November 10, 2026

Key Takeaways

  • Negative Sentiment: Q3 results weakened: revenue fell 3% year over year to $46 million and Adjusted EBITDA dropped to $0.4 million from $4.8 million. Meridian reported a $13.3 million net loss, including $11.5 million in non-cash impairment charges.
  • Negative Sentiment: Meridian suspended Brazilian operations after a regulatory ban and does not expect to resume them during 2026; it wrote off the related license and assets. The company says it will maintain a minimal local presence and pursue legal options, but the outcome remains uncertain.
  • Positive Sentiment: The company generated $17.7 million in operating cash flow over the first nine months, repaid $9 million of debt, and reduced net debt for a seventh consecutive quarter. Online casino revenue grew 21% over that period, while online sports betting revenue increased 12%.
  • Negative Sentiment: Meridian forecast 2026 revenue of $195 million–$198 million, with the outlook assuming no Brazil operations and continued lower revenue from RKings and Classics for a Cause. Management said it is focused on improving margins and controlling costs to return to first-half profitability.
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Earnings Conference Call
Meridian Q3 2026
00:00 / 00:00

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Operator

Good morning, and welcome to Meridian Holdings' third quarter 2026 earnings call. On today's call are Zoran Milosevic, Chief Executive Officer of Meridian Holdings, and William Scott, President, Chief Financial Officer, Treasurer, and Chairman of the Board of Meridian Holdings. Following management's prepared remarks, management will answer questions. At the conclusion of the call, the recording and supporting materials will be available on the Meridian Holdings Investor Relations website at www.meridian-holdings.com. As a reminder, today's call contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements about our outlook for 2026. These statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ materially.

Operator

For a discussion of these factors, please refer to our annual report on Form 10-K for 2025, our quarterly report on Form 10-Q filed today, and our other filings at sec.gov. Today's call also refers to non-GAAP financial measures, including adjusted EBITDA, net debt, and free cash flow. Reconciliations to the most comparable GAAP measures are in today's earnings release on our Investor Relations website. I will now turn the call over to Zoran Milosevic, Chief Executive Officer of Meridian Holdings. Zoran?

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Thank you, and good morning, everyone. We appreciate you joining us for our third quarter 2026 earnings call. I want to start with the numbers. Revenue was $46 million, down 3% from a year ago. A net loss attributable to Meridian Holdings was $13.3 million, or $1.05 per share, after $11.5 million of non-cash impairment charges. Adjusted EBITDA was $0.4 million. Third quarter performance was weaker than we had anticipated, and I want to explain the key factors behind the results. Over the first nine months, revenue grew 10% to $146.3 million, so business is larger than it was a year ago. I want to highlight three key points today. First, this was a challenging quarter, impacted by customer-favorable sport results, regulatory developments in Brazil, and higher operating costs. Second, our core business is healthy and pays for itself.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Meridianbet Group grew revenue 16% over nine months, led by online casino, up 21%, and we reduced our net debt for the seventh consecutive quarter. Third, our outlook assumes no operations in Brazil for the rest of 2026 and continued lower revenue from RKings and Classics for a Cause. Our focus is on improving margins and operating efficiency to return the profitability we demonstrated in the first half of the year. Let me walk through the three main challenges we faced during the quarter. First, non-cash impairment charges. We recorded $11.5 million in non-cash impairment charges during the quarter, which significantly impacted our reported. Of this amount, $5.5 million related to the full write-off of our Brazilian gaming license and associated intangible assets following Brazil's ban on fixed-odds betting, including online casino.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

We suspended our operations in Brazil in line with the ban, and we do not expect to resume them during the rest of 2026. We intend to stay in Brazil while Congress and the courts decide on the ban, with a limited local presence, an office, and minimal operating costs. Another $5.9 million related to goodwill impairment in the reporting unit comprising GMAG, our aggregation business, RKings, and Classics for a Cause, reflecting continued operating losses. Importantly, these charges were entirely non-cash and did not affect our operating cash flow during the quarter. Second, customer-favorable sports results. Online sports betting revenue fell 15%, or $1.6 million, to $8.7 million, as results that favored our customers lowered our online sports betting margin to 7.4%, compared with 8.2% a year ago. Compared with the second quarter, online sports betting revenue declined by $4.4 million, while betting volume was broadly stable.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Third, higher operating costs. Our selling, general, and administrative expenses increased 5% year-over-year, while revenue declined 3%. The increase was mainly driven by $0.9 million in higher bad debt expense, primarily in GMAG's B2B gaming content resale business, $0.4 million in additional marketing around FIFA World Cup, and $0.4 million in higher rent and utilities for the new betting shops, and $0.3 million in higher salaries, along approximately $1 million in other operating costs, partly offset by approximately $1.6 million in lower depreciation, amortization, professional fees, and stock-based compensations. Despite these challenges, our core business remains healthy. In sports betting, online revenue rose 12% to $33.5 million over the first nine months, helped by wider live streaming coverage. Our online casino business continued to perform well. Online casino revenue grew to $17.1 million compared with $14.5 million in the second quarter and $14.6 million a year ago.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Our cash generation remains strong. Our balance sheets continue to strengthen. Over the first nine months, we generated $17.7 million in operating cash flow, up 3% year-over-year. This funded all our investments and supported $9 million in debt repayments without raising additional equity capital. Also, we reduced net debt for the seventh consecutive quarter. Now, onto the individual business segments. Meridianbet Group is 72% of our business. Its revenue rose 2% to $33.1 million, but operating income fell to $0.7 million from $4.6 million because of the sports betting margin and higher costs. Online casino led the growth with revenue up 17% to $17.1 million and up 21% over nine months, as we added new game providers in the quarter and now offer more than 2,500 games. Customer deposits rose 9% to $101.1 million, and the average deposit per depositor rose 18%.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

In retail, casino revenue rose 24% over nine months, helped by more than 100 new slot machines. In the third quarter, we opened two new betting shops in Serbia and moved a third to a larger location. New and larger shops take time to show their full contribution, and we judge each one of them on its own demand, cost, and returns. New registration rose 25% in the third quarter to 458,680. Expanse Studios, our game studio, grew revenue from other operators 114%, with the players up 52%, and it released 14 new games in the quarter. At September 30, it had 101 proprietary titles, and its games were live on more than 2,000 operator sites against 1,881 in the second quarter. In the third quarter, it received full certification in Sweden, and our application in New Jersey and Ontario are awaiting regulatory approval.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

We have done everything required on our side. At RKings and Classics for a Cause, our prize competition business in the U.K. and our trade promotion business in Australia, combined revenue fell 19% to $9.1 million. Even so, the segment's operating results improved from a small loss in the second quarter to a small profit in the third quarter. We will build on that with strong offer for customers and tight control of acquisition and promotional costs. In Australia, the law that governs trade promotions changes on January 1st, 2027. We are working to modify the way Classics for a Cause does business there so that it complies, and that work is in progress. In Mexico, MexPlay grew revenue 55%, with first-time depositors up 35%. GMAG deployed 2,311 games, up 25%, and raised its gross margin to 35.8% from 33.1%.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Its revenue rose 5% to $3.7 million, but $0.8 million in bad debt expense turned into operating loss. Growth there has to come with customers who pay on appropriate payment terms. The measures that matter most to us are online casino growth, sports betting volume, costs against revenue, cash generation, net debt, and share count. With that, I will hand over to William. William?

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Thank you, Zoran, and good morning to everyone. I will walk you through our financial results, including revenue, profitability, impairment charges, Adjusted EBITDA, cash flow, and our balance sheet. Unless otherwise noted, all figures are presented on a GAAP basis. Adjusted EBITDA, net debt, and free cash flow are non-GAAP measures, with reconciliations provided in today's earnings release. Third quarter revenue was $46 million, down 3% from $47.3 million a year ago. Meridianbet Group contributed $33.1 million, up 2%, representing 72% of total revenue. RKings and Classics for a Cause contributed $9.1 million, 20% of total revenue, down 19%. GMAG contributed $3.7 million, which is 8% of the total revenue, was up 5%. The decline was primarily driven by RKings and Classics for a Cause, where revenue fell $2.2 million, more than the company's overall revenue decline of $1.4 million.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Within Meridianbet Group, online sports betting revenue declined $1.6 million despite higher betting volume, as customer favorable sports results lowered the margin to 7.4% from 8.2%. For the first nine months, total revenue increased 10% to $146.3 million, with Africa growing 33% and Central and South America growing 27%. Moving to gross profit, we reported $24.8 million for the quarter compared with $26.4 million a year ago. Gross margin declined to 54% from 55.8%, primarily reflecting lower sports betting margins. For the first nine months, gross profit increased 6% to $79.8 million. Turning to operating expenses. SG&A increased 5% to $28.2 million compared with $26.8 million a year ago. This increase included $0.9 million in higher bad debt expense, $0.4 million in additional marketing, mainly around the World Cup, $0.4 million in higher rent and utilities from new betting shops, and $0.3 million in higher salaries.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Other operating costs increased approximately $1 million. These increases were partly offset by approximately $1.6 million in lower depreciation, amortization, professional, and stock-based compensation expenses. Looking at the first nine months, we maintained good cost discipline. Marketing expenses remained flat, professional fees declined 6%, and stock-based compensation decreased approximately $2.5 million, mainly due to fewer awards granted and the first previously accrued executive share compensation in June. Overall, nine-month SG&A expenses were slightly lower at $77.6 million compared with $77.8 million last year, despite revenue growing 10%. Moving to impairment charges. We recorded $11.5 million during the quarter, all non-cash. In Brazil, we wrote off $4.1 million related to our gambling license and $1.4 million relating to associate domain and player database. We also recorded a $5.9 million goodwill impairment in the reporting unit comprising GMAG, RKings, and Classics for a Cause, affecting continued operating losses.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Following this impairment, $2 million of goodwill remains in the reporting unit. These charges had no impact on cash flow during the quarter. Interest expense declined $0.2 million from $0.5 million a year ago and was down 74% to $0.9 million for the first nine months. Turning to profitability. We reported operating loss of $14.9 million, including $11.5 million in non-cash impairment charges. Net loss attributed to Meridian Holdings was $13.3 million, or $1.05 per share, compared to net income of $0.6 million, or $0.05 per share a year ago. For the first nine months, net loss attributable to Meridian Holdings was $8.8 million, or $0.70 per share, compared with a net loss of $3.2 million, or $0.29 per share a year ago. Moving to adjusted EBITDA. We reported $0.4 million for the third quarter compared with $4.8 million a year ago.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Based on our current definition, we exclude unrealized foreign exchange gains and losses. The year-over-year decline of approximately $4.5 million was mainly driven by $1.6 million in lower gross profit, $0.9 million in higher bad debt expense, and increase in marketing, rent, salaries, and other operating costs. We do not expect the marketing expenses or costs in Brazil before the ban to continue at the same levels. Marketing costs were higher due to the World Cup in Q2 and Q3. For the first nine months, adjusted EBITDA was $12.6 million compared with $14 million a year ago, and adjusted EBITDA excludes the non-cash impairment charges. Turning to cash flow. We generated $17.7 million in operating cash flow during the first months, 3% year-over-year. Capital expenditure was $4.6 million, down from $12.7 million a year ago.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

After capital expenditure and lease payments, free cash flow increased to $10.9 million compared with $2.5 million last year. Moving to our balance sheet. We ended September with $16 million in cash compared with $7.8 million in bank and other loans, which have declined 55% since the beginning of the year. Total debt, including acquisition consideration, declined 47% year-over-year to $24.1 million, while net debt fell 65% to $8.1 million. This marks our seventh consecutive quarter of deleveraging. On September 28th, we amended the remaining $15.6 million of acquisition consideration payable to the former owners of Meridianbet Group, who are related parties, extending its maturity to November 1st, 2031, with no interest. This provides us with greater flexibility and more time to strengthen our cash position. At September 30th, we had approximately 12.7 million shares outstanding, an increase of 0.32% from the beginning of the year.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

We raised no additional capital during 2026 and have made no share repurchases during the quarter. Moving to our outlook. We now expect full-year 2026 revenue of $195 million-$198 million, revising our previous second-half growth expectations. This revision primarily reflects the suspension of Brazilian operations, lower revenue for RKings and Classics for a Cause, and the impact of customer-favorable results in the third quarter. For the fourth quarter, our outlook assumes no operations in Brazil and continued low revenue for RKings and Classics for a Cause. However, supported by expected increase in betting volume during the fourth quarter, which has historically been the strongest quarter of the year for revenue, we anticipate a modest increase in sports betting revenue compared with the third quarter, alongside continued growth in online casino revenue.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Our focus remains on improving margins, controlling costs, and returning to profitability we demonstrated in the first half of the year. Finally, I'd like to recognize Zhe Scott Yan, who's appointed as our Chief Accounting Officer, Principal Financial Officer, and Principal Accounting Officer on October 2nd, 2026. Today is 10/2, the first Form 10-Q she has signed in that role. With that, I will hand back to Zoran.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Thank you, William. Before we take your questions, a word on where we go from here. These are our priorities: grow Meridianbet, led by online casino, and keep costs in line with revenue. Improve results at RKings, Classics for a Cause, and GMAG. Keep generating cash and reducing debt, considering acquisitions only where they give us a license, technology, or market position that is hard to build ourselves. Brazil showed us how quickly a regulatory change can affect the market. We support well-regulated markets and work with the regulators wherever we operate. We remain confident in Meridian Holdings' long-term prospects. So, three points. First, this was a challenging quarter, impacted by customer-favorable sports results, regulatory developments in Brazil, and higher operating costs. Second, our core business is healthy and pays for itself. Meridianbet Casino business keeps growing, the business keeps producing cash, and our debt keeps falling.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Third, our focus is on improving margins and operating efficiency to return to the profitability we demonstrated in the first half of the year. Thank you for listening. We will now take your questions. Operator?

Operator

Thank you. If you would like to ask a question, please press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star and one to ask a question. We will take our first question from Marla Marin with Zacks. Please go ahead. Your line is open.

Marla Marin
Analyst at Zacks

Thank you. Okay. I would like to start with asking a few follow-up questions about Brazil. Some are just housekeeping questions. From what I gather, the press seems to be reporting that there is a lot of opposition to these changes, the regulatory changes in Brazil. Were you mandated by accounting regulations to take the write-down now, or was that something the company decided was most prudent?

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

I think because of the uncertainty, what will happen, it is William here, and because of the uncertainty about what can happen, it is in the hands of the President of Brazil as well as the courts. So, we thought the prudent route was to take the write-off.

Marla Marin
Analyst at Zacks

Got it. Okay. But in your prepared remarks, you did say that you are maintaining a very small presence in Brazil just to keep an eye on potential shifts in regulatory sentiment or potential opportunities there. So, if down the road, you were able to resume operations there, what kind of an impact would that have on the license you had or have, and also the write-off that you have taken?

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

I cannot answer on what we would do with the write-off. I suspect we would just leave it. We have written it off, so it was the license. That said, is that if we have the opportunity, as Zoran pointed out, and he will again add to this, is that if we have the opportunity to carry on operating in Brazil, which is a great market, clearly with some issues in regards to regulatory changes, is we would, in the right market, definitely want to operate there. Zoran?

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yeah. Thank you for the question. In terms of accounting, basically, we tend to always have conservative approach, and then we went with very conservative way, just want to inform our shareholders about real situation. On the other hand, in terms of business, we really will fight for this market. We still think highly about this market. We never had any problems in terms of customers, so that is what is our main focus. If the customers are happy, we are serving them properly, this is actually most important thing for us. And rest are just bumps along the way, which we expect and we expected, and management is there to fight these problems. Our decision is to stay in Brazil and to exhaust every single possible legal way how to resume our business. Actually, every single company is doing more or less the same.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

I do not know anyone that actually exited the market. We lowered down expenses, we have a minimum office, minimum expense. Basically most of our time is now we are busy with lawyers and looking at two possible routes. One is that we are waiting for decision of Brazilian Congress, which needs to be done until end of January. Or there will not be a decision in Brazilian Congress which will terminate this order that was made by President Lula. That is the first way. Second way is we are fighting through courts. If you were monitoring news from Brazil, it is quite dynamic situation out there. Already four companies got approval to resume the operations, and that was followed by Supreme Court and the prosecutor trying to fight and manage to terminate this as well. But at least something is happening.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

As I said, it is quite dynamic, and everybody is determined to fight for the market because, as you know, we think that this order was absolutely not legal and very unlawful. Because of that, we use every Sorry, I just pressed the mic off accidentally. As I said, it is quite dynamic when it comes to legal activity in Brazil. Even that we are not serving our customers, but it is quite dynamic what is happening in the courts, and we are quite active on that front as well. As I said, until we exhaust every single possible legal way to reestablish the business, we will stay there. It is very interesting, your question, that is something what we were discussing internally, even if we resume, how it will actually reflect on our accounting, on our balance sheets.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Since this interim order was quite destructive, and it actually was written in the manner that we cease to exist on the day of the elections, which is really something what we never saw before. That raises the question, as you raise it rightfully. So it still stays unknown, but we decided to deal with this question after we see some certainty that we will resume the operations. As I said, it is quite active. We have like four positive outcomes and four negatives in parallel when it comes to decision of the lower courts in Brazil. At least something is happening. But we are determined to stay and to fight for this market.

Marla Marin
Analyst at Zacks

Understood. Okay, thank you for that answer. Switching topics. It seems as if, during the quarter, as you described it, a very challenging one, it seems as if Expanse Studios and online casino seem to be significant bright spots in the quarter. So, two-part question to that is, what do you think, over the next couple of quarters, is the potential runway there for their growth? And then also, what measures are you implementing in order to facilitate the growth there? Thank you.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yeah, this is something which we are very bullish on. As you see, the growth in this segment is like triple digit, double digit, or triple digit in some parameters. The only problem is this business comes from nothing, actually started from nothing, and it is competing against quite significant Meridianbet business. So still, we are not showing the numbers, but at least this is growing. We are very optimistic about general state of casino business. To be honest, we are quite focused on getting more licenses and getting more territories to be approved, because what is the main issue currently in online casino segment is regulatory issue. This issue was not basically big before pandemics, let us say, but after pandemics, regulatory was number one, actually became number one issue in casino. Because usually casino business was covered under sports betting license.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

So you had very developed market of sports betting licenses worldwide, and whoever operated casino more or less could operate under sports betting license, and where casino was not required to have such a lot of certificates or regulations and so on. But after pandemics, let us say, I do not know, maybe a few years ago, that is becoming increasingly number one problem, and our team is just focusing into actually every single segment. But let us say number one problem is, not problem, but issue which we are solving is getting more and more licenses. As you see, we are almost like every single month we have some new territory which we are opening. That is what we are busy, along with getting new clients and developing more games, developing new and better functionalities within the games and so on.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

We are busy on every single front, and we are quite happy with the progress. Hopefully soon we will be able to present figures from Expanse separately from other Meridianbet revenues.

Marla Marin
Analyst at Zacks

Thank you. Here is one last one from me. Just wondering about the recent sponsorship you did of the Ultimate Fighting, the UFC event. Can you give us any color, any feedback on how you think that went in terms of helping to promote the brand? Is that the kind of marketing initiative that you would consider doing again if the opportunity presented?

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yeah, thank you for the question. Absolutely. That was actually by far the biggest marketing event we ever sponsored, and it was really, I think, the only one, let's say, pure integrated marketing activity which we ever did. In terms of integrated marketing, that means that we did this promotion in Serbia, but we could use it basically almost on every single territory where we operated in some form, depends on the contract. That was really, from a logistics perspective, excellent thing to do. Everybody in the company created really positive momentum, so the people were so happy that we They couldn't believe, actually, at the first point. It produced enormously good result and a lot of new registrations from the customer base that we want and that we need. It's actually younger generations, which are more turned into casino, not on betting, so it's really great.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

We are considering, UFC actually announced that they will repeat the show in Belgrade next year, so we'll be first in line to try to get the sponsorship next year as well.

Marla Marin
Analyst at Zacks

Okay. Thanks so much.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Thank you.

Operator

Thank you. We will move next with Jack Vander Aarde with Maxim Group. Please go ahead.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay, great. Good morning, guys. Thanks for taking my questions. It is still good to see the positive adjusted EBITDA despite some of the turbulence in the quarter and the softer revenues. I think that is a key point. It sounds like the revenue softness is mostly due to continued, I guess, more favorable player outcomes and obviously the Brazil disruption in RKings. So I guess a couple questions here. I guess the new guidance, this implies $195 million-$198 million. I guess this implies Q4 revenue being down 1% year-over-year to up 5% year-over-year at the high end, despite not having Brazil baked in there and, I guess, continued softness in RKings. So, can you quantify what the Brazil disruption was, I guess, in the quarter and then also in this fourth quarter outlook?

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

I think that we actually had hoped. I would hope that Brazil would grow, but it was less than 1% of our overall revenue. I think the greater impact on it is the impact of RKings and Classics for a Cause, where we kind of have forecasts of softness. Obviously, taking out Brazil is one, and then is the other one. But also, I think the other thing which we've done is we've just been a little more conservative on the Meridian side from the bottom end because we want to make sure that we see, we want to kind of We don't want to miss our kind of projections or what we say that we're going to give the market.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

I think it's a little bit. We know that revenue didn't go up, and we believe that revenue will go up in Meridian, but we still expect softness in the Classics for a Cause and RKings. But we're not doing anything. We're not ignoring it. We're working to make sure that doesn't happen, and that softness hopefully goes away.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay. That makes sense. Maybe just a follow-up to clarify. Obviously, you're not providing 2027 guidance, but just given your comments around RKings and Classics for a Cause in this fourth quarter, is there any indication that you expect both RKings and Classics to grow, return to growth in 2027? Is that a fair assumption, or is it really I guess any color there would be helpful.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

I think, and Zoran, please jump in as well. I think that we don't like businesses being soft, and so we're working on trying to grow those businesses or kind of stop the decline and also grow them. We are focusing on lots of actions to try and arrest it. And we're not giving 2027 at the moment. We will in time, but at the moment, we just don't want to talk about 2027. But yeah, we don't like businesses which are soft.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

If I may add, basically, as William said, these are a lot of new issues which happened recently beyond our control, and we will have a more clear situation in the next few weeks. Definitely before the end of the year, we will have a clear picture, but management is dedicated to fight on every single front. In a perfect scenario, yes, we want to grow this business and continue. Definitely, Classics for a Cause needs to change business model, and we are busy doing this. It is still an unclear situation with RKings, and we expect at least to have some guidance on that in two, three weeks, so we will know more. There is a lot of unknown for us as well. We are just managing with these figures that we know, but the final decision will be made in two, three weeks.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay. Yeah. That is fair. I can appreciate that as well. There is only so much you can control. What you can control, it sounds like you are proactively working at it. Maybe just a follow-up here, two more quick ones. MexPlay definitely seems to be a bright spot still, growing more than 50%. Do we have any sense of scale that you could provide here of that revenue in that business? Or when do we get to a point that you guys can maybe talk a little bit more about the scale of that business?

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Definitely. Actually, we should have spoke about that, and we just didn't have time to separate it. MexPlay can be separated, and probably we will do it in Q4. This is just the old legacy reporting system. We had a lot of issues connecting Meridianbet reporting and all the Golden Matrix reporting system, and only because of this nature of reporting, it remained in that segment. But definitely, we will exclude it, put it separately, put it under Meridian, or do something about it. Definitely doesn't belong there at all. Because it is a classic sports betting with casino, so it is more Meridianbet business model than old Golden Matrix model. We just didn't have time to do it. But definitely for next quarter, we will separate. It is a great business, so we are very proud of this business and hope it will continue to grow.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Understood. Okay. Then just one last-

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

I would say-

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Oh, sorry. Go ahead.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Sorry. I think to add is, there are very few licenses available in Mexico, so it is hard to get a license, and having a license is valuable. Therefore, we can. So it is a great environment to operate.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Great. I appreciate all the color there, guys. As said, one more follow-up here. Just any update, or do you have any more visibility into the pending Ontario and New Jersey applications? Thank you.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yeah. In terms of New Jersey, we basically, it's days time. Actually, every time when somebody asks me, it's a day time. We did everything what was on our end. We are just expecting for the regulator to get the feedback, and it's quite positive. It's like really day time. When it comes to Ontario, we are weeks away. We did the first round successfully. Now there is a second round of certification, regulation, investigation, and so on. It's like a week's time. Considering this, we're entering into Christmas, New Year period, and that can happen that we will start in 2027. But we will do whatever is on our end to start before 2027. But we've done a lot for it.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay. Great. I appreciate the time, guys. Thank you very much.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Thank you.

Operator

Thank you. And once again, that is star and one if you would like to join the queue. We will move next with Steve Silver with Argus Research. Please go ahead.

Steve Silver
Steve Silver
Analyst at Argus Research

Thanks, operator, and thanks for taking my questions as well. With the operating cash flows continuing to fund internal investments and to reduce debt, and now with the added flexibility from the long-term extension on the acquisition consideration repayments, can you talk a little bit about some of the investments that you've identified to be made in these growing jurisdictions, like you mentioned in the prepared remarks? Just trying to get a sense as to how you're thinking about returning to the previous growth trajectory.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Zoran, do you want to take that one? I can add some afterwards.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yes. We are quite busy, and I hope we will report in fourth quarter more things that we are busy with. Definitely there will be some. Actually, I cannot say much. I think we will have some good news on, yeah, on report. But management is super busy in getting into new areas.

William Scott
William Scott
President, CFO, Treasurer, and Chairman of the Board at Meridian Holdings

Yeah. I think, Steve, the long and short of it is, because we got such a strong balance sheet, we are looking for investment in great opportunities, and we're actively doing that all the time. Yeah, watch the space.

Steve Silver
Steve Silver
Analyst at Argus Research

Great. One more, if I may. There have been several instances now over the past few quarters of favorable sports betting outcomes impacting margins, and I know in Q2 you cited some World Cup activity there. I am just curious as to whether the Q3 was related in any way to the World Cup or if that was separate, and just if you could provide a little historical context around periods where sports betting outcomes affect margins over the short term.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yeah. This usually World Cup, as I mentioned in the previous conversations, is very good for betting companies. This is excellent event when it comes to marketing. This is like the best marketing activity which you can have, is market your company around World Cup, by far. But in terms of results, I hardly can remember. This is, I do not know, my, I think, sixth World Cup. I can hardly remember when it was profitable, only because you do not have clearly built statistics. These teams play once in a full year, and nobody can predict, make any good statistics out of it. Because of that, it is like this is gamble as well. This is not business, it is pure gamble. So we are just trying to lose as much as possible, like all others.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

But as I said, from marketing perspective, this is by far cannot compare with anything else. So in that sense, Q3 was affected by World Cup in one month. So July was in Q3, and July was the month for the World Cup, and unfortunately, it did impact us as well. Usually, you have situations that August and September, usually one of these two months is always bad for us, only because this is the start of the football season in Europe. Football, I mean soccer. Soccer season in Europe starts in the middle of August, and you have the similar situation when you have completely new teams, you do not know the strength of the players, statistics is not most proper one. You have all the time change of the rules.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Actually, soccer rules changed a lot recently, last one year, and football became more dynamic, more goals is scored and so on, and the rules of Champions League is changed and so on. There are more teams, more dynamics, more goals, and it can affect the first month usually, because we are getting into unknown territory when it comes to soccer. But since these teams play every week, our statistics and risk management improves after two, three weeks. Then it is like proper trading happens after that. So usually, August and September can, at least one of them can be bad. That is always usually happen. Now, this time we had like August and September being bad, which rarely happens, but it can happen from time to time.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

The reason is, as I said, it's like the beginning of the season is always more difficult for sports betting business, only because the statistics are still not shaped as they should be, because having these teams being on vacation for one month or two months is not enough, is too long for us to be very precise in the beginning of the season. But once the matches starts and once we see the first results, first strengths of the team, players and so on, then it's easy to trade.

Steve Silver
Steve Silver
Analyst at Argus Research

Great. I appreciate the color, and best of luck working through the near-term challenges.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Thank you so much.

Operator

Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Zoran.

Zoran Milosevic
Zoran Milosevic
CEO at Meridian Holdings

Yes. Thank you for organizing and hosting this meeting, and thank you all for joining us and asking us really good questions. I can only assure our shareholders that we are really committed to the fundamentals and the basics of the business, and that means that we want to grow the revenues, we will continue to reduce the debt, we will improve our marketing efficiency, and we will continue to cut costs. They can be assured that we will do whatever is necessary just to bring the profits up and to ensure long-term prospects of this company. Thank you so much for joining us and supporting us so far.

Operator

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Executives
    • Zoran Milosevic
      Zoran Milosevic
      CEO
    • William Scott
      William Scott
      President, CFO, Treasurer, and Chairman of the Board
Analysts
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