Brazil is now open. One overlooked platform is set to move

Every investor waits for the one change that can reset the story. Sometimes it is a drug approval or a new patent. Right now it is Brazil. The country has finally moved to a regulated online betting market in 2025. This is not a soft shift. The rules are strict, the licence fee is R$30m and the tax on gross gaming revenue is 12%. The aim is clear. The market wants fewer, stronger operators with real scale and compliance. That setup tends to reward the players who planned ahead.

This is where we lean in. Golden Matrix Group is a small cap with both B2B platform reach and B2C distribution. The shares trade like a broken story near 0.6x forward sales. We do not see a broken story. We see a defined catalyst with visible steps that can lift revenue, mix and cash generation as Brazil goes live and as the platform consolidates.

We are initiating at Strong Buy on GMGI

We initiate at Strong Buy with a 12 month PT of $3.42. Our valuation uses a forward P/S of 1.9x on FY26 revenue of $255m. We choose sales rather than earnings for two reasons. First, EBITDA is still normalising while Brazil ramps and while Atlas and Expanse consolidate, so earnings multiples can mislead. Second, B2B gaming platforms often re rate on revenue scale and mix quality once new regulated markets switch on.

The upside is not about hope. It is about a simple rerating path. The stock sits near 0.6x forward P/S. If Brazil lands and platform KPIs move as we model, we see a route to 1.9x as the market prices in scale and better visibility. That bridge takes us to $3.42. Even a mid case near 1.4x still gives meaningful upside. We also run a probability view since the licence is not yet granted. On 60% probability of full execution within 18 months we see an expected value near $2.45.

What the market is missing about GMGI

The market sees a levered roll up with noisy margins. We see a platform with the right shape for Brazil. The new regime has real barriers to entry. A R$30m fee and hard KYC rules favour prepared operators with local payments, compliant content and a working tech stack. GMGI has that. Atlas and Expanse give a single sign on, a shared wallet and localised casino supply. That setup lifts cross sell and reduces churn. We model cross product penetration rising from about 12% to 25% by end FY26. When more users hold more than one product, lifetime value steps up. We model LTV moving 2.2x to 2.5x with this shift.

Owned content also matters. As GMGI pushes its own titles, third party take rates compress. That improves unit economics on casino and live games. We model $8m to $10m of high margin casino revenue as this mix builds. The company’s B2B relationships also lower cost to acquire users in B2C. That is key in Brazil where approved operators will have a clean channel and users will seek known brands. This is why we think a small initial share can still produce a material revenue line.

How our forecast builds from proof to scale

We anchor our base to the twelve months to 31 Dec 2024 with total revenue of $151.1m, up 62.5% y/y. We then model two paths. Pre catalyst we see FY25 revenue near $195m and FY26 near $238m. Post catalyst we embed a regulated Brazil launch and faster platform benefits. That lifts FY25 to $199m and FY26 to $255m.

Brazil is the first leg. We include a soft launch in Q4 FY25 with about $4m in FY25 and $32m in FY26 at just 0.5% share in year one rising to 2.0% in year two within a $1.5b to $1.8b market. These shares are conservative for a regulated entry with scarcity value and a big brand funnel. We prefer to underwrite on a small base and leave room to the upside if execution beats.

The platform is the second leg. Single sign on and a localised casino catalogue should increase cross sell. We model $6m incremental revenue from consolidation in FY25 and $14m in FY26. Expanse licensing scales across a 1,200 plus operator network. RKings, which already grew 34.7% y/y to $28.5m in the twelve months to 31 Oct 2023, shifts to profitable growth with about 1,200 bps gross margin expansion. Together these moves turn the mix toward regulated, recurring and higher LTV users.

The cadence matters. We expect H2 FY25 revenue near $113m versus about $86m in H1. That step up is a key sign that the funnel is healthy ahead of Brazil go live. On earnings we model Adjusted EBITDA at about $25m in FY25 and $33m in FY26, which implies margin lifting from around 10% toward 13% as utilisation rises and fixed costs dilute.

Why we value GMGI on sales not earnings

We use forward P/S for this phase because it maps best to the drivers. EBITDA and P/E can be noisy when a company is paying a large upfront licence fee and running integration. Brazil has a 12% GGR tax and will carry new compliance costs, but the volume and mix shift should more than offset that. EV and net debt also move around due to convertible notes and acquisition obligations, so EV based multiples can be less stable during a transition.

Peer history in B2B gaming shows that once a regulated entry proves out and platform throughput scales, the market tends to pay a higher revenue multiple. We think 1.9x is fair for FY26 if Brazil is live, cross sell improves and cash flow turns up. We set the PT on that basis. We also test a mid case near 1.4x if balance sheet items cap sentiment for longer. In both cases, sales growth and mix quality are the core inputs, which is why a sales multiple feels appropriate today.

What to watch next for proof and timing

We look for licence awards in the early waves during 2025. Scarcity of approvals since the 31 Dec 2024 transition suggests that the first set of winners will hold an edge. A confirmed soft launch in Q4 FY25 would validate our $4m Brazil contribution in FY25 and the exit run rate we assume. We then watch H2 FY25 revenue near $113m as a read on base momentum.

On KPIs we expect a lift in cross sell after the Atlas migration. We also model usage based licensing rising to about 5.1m in FY25 and 9.2m in FY26 as throughput grows. Reseller and third party content should step from about $9m in FY25 to $21m in FY26 as regulated distribution increases and attach rates improve. Registered users are set to climb from about 9.6m at FY24 year end to about 12.5m by FY25 exit and about 17.0m by FY26. These are conservative builds that fit our Brazil shares and the benefit of a single wallet across brands.

Liquidity is another key sign. As of 31 Dec 2024 cash was $30.1m with operating cash flow of $23.9m and a working capital deficit of $18.5m. We forecast year end FY25 cash of $34m to $36m and a narrowing deficit to about $10m to $12m as H2 revenue steps up and collections improve. We do not assume equity before launch. If cash builds as modelled, it reduces dilution risk and should support a higher multiple.

Where this can go wrong

We see two main risk clusters. The first is balance sheet and liquidity. The secured $12m convertible note, now about $9.6m, carries mandatory amortisations, default triggers that can force conversion at a discount with penalties, and security over key assets. A bank facility at a major subsidiary carries a net debt to EBITDA covenant with mortgages and share pledges. There are also near dated obligations to sellers of about $19.9m within 18 months and $15m at 24 months. If revenue timing slips or collections slow, liquidity could tighten fast. That could force financing on weak terms or delay investment. We try to address this by modelling H2 FY25 revenue catch up and by assuming no equity till Brazil go live. Still, this is the key swing factor for rerating speed.

The second risk is governance. A principal seller holds about 58% voting power via preferred shares and the company is a controlled company. There are voting and management agreements around Meridian. Minority rights and governance discount are real issues until cash generation and delivery build a stronger track record. This could cap the multiple even if operations improve.

Execution also matters. Brazil licence timing could slip. Onboarding could take longer. The 12% GGR tax and compliance costs could weigh if user growth is slower. Integration of Atlas and Expanse could drag if migrations create downtime or if content deals do not improve take rates as expected. We keep our Brazil share low in year one to create cushion, but timing risk remains.

Bottom line

Brazil is a rare, high barrier entry that can change the shape of GMGI. The market still prices the stock like a distressed asset at about 0.6x forward sales. We see a clear path to a higher quality mix, stronger cash flow and a rerating as the licence lands and platform effects show up in H2 FY25 and FY26. We initiate at Strong Buy with a $3.42 PT based on 1.9x FY26 sales of $255m. The near term milestones are visible, the upside is asymmetric and the risks are knowable. We think the right move is to position before the licence confirmation and let the proof points do the work.