MRDN Earnings Call

OperatorGood morning, everyone, and welcome to Meridian Holdings Second Quarter 2026 Earnings Call. On today's call are William Scott, Chairman and Interim Chief Executive Officer of Meridian Holdings, Zoran Milosevic, Chief Executive Officer of Meridian Vet Group, a subsidiary of Meridian Holdings, and Rich Christensen, Chief Financial Officer of Meridian Holdings. Following management's prepared remarks, we will conduct a question and answer session. 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.

OperatorAs a reminder, today's call will contain forward-looking statements within the meaning of applicable securities laws. These statements are based on various assumptions and subject to risks and uncertainties that could cause actual results to differ materially. For a complete discussion of these factors, please refer to our most recent 10-K and 10-Q filings and other public disclosures available at sec.gov.

OperatorNon-GAAP financial measures will be discussed on today's call. Reconciliations to the nearest GAAP measures can be found on our earnings press release. Available on our Investor Relations website. I will now turn the call over to William Scott, Interim Chief Executive Officer of Meridian Holdings.

William ScottThank you and good morning, everyone. We appreciate you joining us for our second quarter 2026 earnings call. Let me start with the headline. We delivered strong revenue, secured a second consecutive quarter of GAAP profitability,— good adjusted EBITDA and further strengthened our balance sheet. Furthermore, the first half of 2026 is the first in our company's history where revenue crossed $100 million. In the second quarter specifically, revenue was $50.2 million and net income attributable to Meridian was $2.2 million or 17 cents per diluted share against a loss of 31 cents per share a year ago. Adjusted EBITDA grew 43% year on year to $5.9 million, and importantly, the balance sheet took another major step forward. Net debt fell 65% year over year to $9.4 million, marking our 6th consecutive quarter of deleveraging. I also want to be direct about one number that came in modestly below our own expectations.

William ScottWhile revenue of $50.2 million represents a 16% year-over-year growth, the top line landed slightly below the range we guided to last quarter. Meridian is well-diversified in certain markets, the World Cup group stages can produce a run of results that are unusually favourable to bettors, compressing sportsbook margins during that period. Zoran will discuss this in greater detail shortly, but the essential point is this. The shortfall came from sporting results, not customer demand. Wagering volume, deposits, and new customer registrations all set records in the quarter. When the volume is at record levels and margins temporarily below the trend, the business is getting stronger, and the margin follows the transactional volume over time. Beyond the quarter itself, the progression we committed to is on track. A year ago, this business reported a quarterly loss. Today, it is profitable the second quarter running, generating cash at more than 3 times last year's pace.

William ScottThis is the compounding effect of operational discipline, and it does not depend on any single quarter's sporting calendar. Interest expense is down roughly 80% due to the debt we have retired. With that, I'll walk through a bit more detail on the quarter as we speak to our operating segment results. Revenue for the second quarter was $50.2 million, an increase of $6.9 million or 16% compared to the 43.2 million in the second quarter of last year. Growth was led by Meridianbet, which delivered 35.8 million, up 23% year over year, and accounted for 71% of the total company revenue. For the first half of 2026, revenue was 100.3 million, up 17% year over year. This marks the first time that half one revenue has exceeded 100 million in the company's history.

William ScottGross profit was $26.9 million, up 10% year over year. Gross margin was 53.5% compared to 56.4% in the prior year. The margin movement reflects two factors Zoran will expand on. Sportsbook margin compressed by the World Cup result environment, and casino hold that ran below its prior year rate even as casino wagering volume grew 27%. Both variance items tied to results and hold, not to pricing, competition, or cost structure. We've seen good progress with operating expenses. Selling, general, administrative expenses were $24.4 million, down 8.5% from $26.7 million in the prior year quarter, even as revenue grew 16%. As a percentage of revenue, SG&A improved from approximately 62% to close to 49%. That is the operational leverage of this model becoming visible. Income from operations was $2.4 million compared to the operating loss of $2.3 million a year ago, a swing of $4.7 million. Interest spent was down to $0.3 million, down approximately 80% from $1.5 million in the prior year quarter, a direct result of the deleveraging actions taken over the past 18 months.

William ScottLower financing costs are now flowing through to the bottom line. Net income attributed to Meridian Holdings was $2.2 million or 17 cents per diluted share compared with a net loss of $3.6 million or a loss of 31 cents per diluted share in the prior year. This is the second consecutive quarter of GAAP profitability. Adjusted EBITDA was $5.9 million, up 43% from $4.1 million, with margin expanding approximately 222 basis points to 11.8%.

William ScottTurning to our segments. Meridianbet Group delivered revenue of $35.8 million, up 23% year over year, with segment operating income up 91% to $6.1 million. Zoran will cover the operational drivers in a moment. Our RKings & Classics segment delivered combined revenue of $10.8 million, up 4% year over year, representing 22% of company revenue.

William ScottOur GMAG reporting segment contributed $3.6 million in revenue, in line with the prior year period. The segment contains two distinct businesses. The first is our B2B aggregation platform, which deployed 2,382 new games in the quarter, up 13%, and added 3 new providers. The second is MexPlay, our consumer-facing online casino in Mexico, which is reported within the segment but operates as a separate B2C key growth business. MexPlay delivered another strong quarter with revenue up 31%, registrations up 50%, and first-time depositors up 53% year over year. With that, I'll pass over to Zoran to discuss Meridianbet Group's operational performance and results in detail. Zoran?

Zoran MilosevicThank you, William. Good morning, everyone. Meridianbet delivered a revenue of $35.8 million in the second quarter, up 23% year over year, with segment operating income up 91%. However, I would like to start with our customer metrics, which provide a clear indication of the trends this quarter. New customer registrations reached over 516,000, up 37% year over year. Additionally, first-time depositors grew 24%, and total deposit volume grew 24% to a record level. Betting gross gaming revenue grew 37% on record wagering activity, and casino gross gaming revenue grew 12% on casino wagering volume that was up 27%. By every measure of customer demand, that was the strongest quarter in our history.

Zoran MilosevicAs William mentioned, top line revenue in the quarter was modestly below expectations. This was driven by betting-friendly results during the World Cup group stage. This part of competition saw many favorites winning as well as high-scoring matches. That combination is the least favorable scenario for sportsbook operators, and certain markets and geographies we operate within were particularly affected by these trends. In our casino operations, hold also ran below its prior year rate, including the impact of 2 major casino wins totaling over $1.2 million in the quarter. These were results-driven movements. They compress margin in a given period and they normalize over time. What they don't do is tell you anything negative about underlying business because the underlying business set volume records. There is another important aspect of the World Cup that I would like to highlight. A tournament of this scale brings a wave of new players onto platform, and our registration count increasing 37% is a part of that wave.

Zoran MilosevicOur job now is conversion and retention, turning tournament-driven signups into long-term customers. That is precisely what our platform is built to do. The cohort we acquired this quarter is an asset that pays back over the quarters ahead.

Zoran MilosevicTurning to Expanse Studios, our proprietary game studio within MeridianBet Group, Expanse grew revenue 138% and gross gaming revenue 90% year-over-year. The studio now distributes nearly 90 proprietary titles across more than 1,800 active sites. During the quarter, we secured new market certifications in Latvia, Colombia, Portugal, and Slovenia, entered the North American distribution partnership with Break Gaming, went live with MaxBet Serbia that's part of Flutter Entertainment, one of the world's largest online gaming operators, and sealed new operator partnerships including Finbet and Joker.lv. We also launched new player engagement tools during the quarter, including jackpots, tournaments, and our Achievo gamification product. Every new title and every new operator connection compounds the value of this network at minimal incremental cost.

Zoran MilosevicGeographically, growth remained broad. Europe, excluding UK, grew 90%. Africa grew 55%. And Central and South America grew 10%. Africa continues to be a particular standout with first half revenue up nearly 50% year over year. Our priorities for the second half are consistent. Convert and retain the customer cohorts we acquired this quarter, continue scaling the expanded distribution, maintain pricing and risk discipline in the sportsbook, and keep operating with the cost discipline that produced this quarter operating leverage. With that, I will turn the call to Rich to discuss our current financial position. Rich?

Rich ChristensenThank you, Zoran, and good morning, everyone. During the second quarter, we greatly strengthened our balance sheet. At quarter end, cash and cash equivalents were $17.3 million and total debt was $26.7 million, down 45% year over year and down 62% from the end of 2024. Net debt was $9.4 million, down 65% year over year, and net debt leverage now stands at 0.39 times annual adjusted EBITDA, down from 0.53 times last quarter. This is the 6th consecutive quarter in which we've reduced debt. Our operating cash flow was $7.8 million in the quarter, more than triple the $2.4 million generated in the prior year period. For the first half, operating cash flow was $13 million, up 28% year over year. That cash generation funded $2.8 million of debt repayment in the quarter and continued investment in our technology and operations without any capital raises. One further point on capital structure: shares outstanding were essentially flat in the quarter, increasing 0.23%, entirely from the vesting of previously granted employee awards.

Rich ChristensenNo new equity awards were granted. No shares were sold and no repurchases were required. We intend to report these share count metrics to you every quarter as a standing part of our disclosure. As our balance sheet continues to strengthen, we are actively evaluating the right mix of capital allocation from high-return growth investments to further strengthening our balance sheet, and we intend to make that decision with the same discipline that has guided every dollar we have deployed to date. Turning to our outlook for the balance of the year. For the second half of 2026, we expect constant currency revenue growth of approximately 8 to 10%. Year over year. Consistent with our historical seasonality, we expect the fourth quarter to be our strongest of the year, reflecting the concentration of major sporting events and holiday period wagering activity. With that, I'll turn the call back to William for closing remarks.

William ScottThank you, Rich. Before we open the line for questions, let me summarize the quarter plainly. We delivered a second consecutive quarter of GAAP profitability saw first half revenue above $100 million for the first time in our company's history and drove a 43% increase in adjusted EBITDA. Furthermore, operating cash flow has more than tripled and we're able to reduce debt by 65%, helping bring our net leverage down to 0.39x and marking 6 consecutive quarters deleveraging as we brought interest expense down 80%. Our focus for 2026 has not changed. We remain focused on operational discipline in every market, converting the customer growth this quarter delivered, continuing the balance sheet trajectory, and communicating with you clearly and consistently every quarter. To every shareholder, analyst, and partner on this call, thank you for continued support. With that, we'll open the call for questions.

William ScottOperator.

OperatorThank you. At this time, if you would like to ask a question, it is the *1 on your touchtone telephone. If at any point you find your question has been answered, you may remove yourself from the queue by pressing star 2. Again, that is the star and 1 to ask a question. And we'll take our first question from Marla Marin with Zacks. Please go ahead. Your line is open. Thank you.

Marla MarinSo I think that, you know, the new customer registrations represents a very strong metric. And I think going into the quarter, it's consistent with what you had sort of laid out in terms of what you were hoping for from the World Cup games. And as you said earlier in your scripted remarks, now your goal is conversion and retention of a large number of those new customers. New customer registrations. Can you give us a little bit more color on how the platform basically approaches that, and also whether recent promotional events, um, such as your, you know, new brand ambassador in Brazil ahead of the FIFA Games and the upcoming UFC event in Serbia, whether those also play into the goal of conversion and retention? Thank you.

William ScottI think I'm going to hand this question to Zoran because he knows the system the best. So, Zoran?

Zoran MilosevicThank you, William, and thank you for the question.

Zoran MilosevicAs we predicted, obviously, that World Cup was by far the biggest sport event we ever experienced in terms of customers' activities. So, in every single segment, so from the number of the bets that have been placed turnovers which we achieved, customer registrations, and so on. In terms of profitability, as we said, we were neutral and mildly positive. So that was our position before the World Cup, only because there is low number of matches, and basically every country where we operate that has national team participating will face a lot of emotional betting involved where it's like almost impossible to manage the risk. But overall, basically, it was better than we predicted. So our internal forecast was from 2 to 4% margin. That was like the best outcome. Actually, we achieved over 6%. It was 6.2% margin. Overall, which we are really happy. It is of course below what is regular football betting. Regular football betting is approximately 10-11%, but it's actually for the World Cup better than we expected.

Zoran MilosevicIn terms of customer acquisition, this is the record number of customers we ever registered. Actually, the record number of accounts we ever registered. It's like 519,000. So now we are busy turning them into into customers. And if there was not a World Cup, we would probably register like 350,000, a little bit around that. So 500,000 and 520,000 approximately, this is additional value that we got from World Cup. So you can count that 170,000 customers were registered because of the marketing surrounding World Cup. And World Cup is by far the biggest when it comes to marketing. So what we are like doing, we are trying to get integrated marketing approach. So because we operate in many countries, we try to use some marketing opportunities in one country to try to replicate this into another country, making this excitement much bigger and of course lowering our marketing expenses. And that is what we did with UFC and with, with our new ambassador in Brazil, which is very famous Brazilian football star, but actually he is Serbian origin and he was playing for Red Star Belgrade, that is the biggest football club in the region.

Zoran MilosevicAnd that approach made big impact in the region of Southeast Europe and in Brazil as well. Also, when it comes to UFC, UFC is in terms of sports currently maybe the biggest brand by far. We use this opportunity to become sponsor of this event which will happen on Saturday in Belgrade. This is the first time when UFC is coming to Belgrade. Can you imagine that all tickets have been sold in 22 minutes? So it's like, arena is like 18,000 visitors. So you can imagine what kind of excitement that brings. And also, this is very important for our teams in the region because this is actually a regional event. Even this is happening in Serbia, people that will come to this event will come from all over Southeast Europe. This kind of marketing approach we are undertaking, so as much as possible to have integrated approach to marketing.

Marla MarinOkay, thank you. And I have a follow-up housekeeping question on that event, the UFC event. So I think in the press release you talked about what some of the promotional benefits will be to the brand, for the brand. And I think one thing is signage and also logo placement within the Octagon. Now, that event will be broadcast internationally, or, you know, pay-per-view, available via pay-per-view. Will the logo and the brand be visible internationally as well? When that event is shown in other markets?

Zoran MilosevicYes, that is per our contract, so, and also to add to that, it's also what the two fighters that are participating are also, even before UFC events, they were like our ambassadors as well, and one of the fighters is from Brazil, The only Brazilian participant is actually sponsored by Meridian, and that sponsorship was made before the event. And also one of the most famous fighters from Montenegro is also sponsored by Meridian. So this brings that situation, as I said, come to the point of integrated marketing. So it's not event only, it's also the fighters which are coming, which are sponsored by us. And basically Meridian is very well known to be early supporter of MMA despite this situation with UFC. We started sponsoring MMA fights 10 years ago, even more than 10 years ago, and at some point Meridian before Corona, let's say, we were sponsoring like 100% of all events in this part of Europe and almost 80-90% of all fighters have been sponsored by us.

Zoran MilosevicAt some point, of course. And now we are still number one when it comes to number of events we sponsor and number of fighters we sponsor as well in this part of Europe. Actually, number one by far. I think we cumulatively have more sponsorships than all others combined.

Marla MarinOkay, got it. Thank you. And then one last question from me. I guess this would be for Rich. In terms of the balance sheets, So leverage went down and your, you know, your debt ratios went down. Is the strategy to continue to reduce debt in absolute terms or, you know, as EBITDA grows, you know, and relative leverages— leverage ratios go down, is that, you know, where you feel more comfortable?

Rich ChristensenThanks for the question, Marla.

Rich ChristensenYeah, we're really pleased with the debt and how it's come off over the past, you know, say 18 months. We're down 62% since year-end 2024. And what you're seeing with the leverage ratio is really the two things. You know, in absolute terms, debt's coming down. Net debt's down to $9.4 million. And then our adjusted EBITDA. The current calculation is effectively year-to-date times 2 adjusted EBITDA and seasonality, you know, that the last half of the year is much more profitable than the first half of the year. And so as we see EBITDA continue to expand, we'll see that, you know, that ratio to continue to come off. And from how we view debt is we don't like it. And so we'll continue to pay down debt because we are opportunistic. In the future, as we see opportunities, the debt, we can re-leverage for exciting opportunities, but it's not something that we want to carry just for the sake of carrying. We are down to a level that we're extremely comfortable.

Rich ChristensenI mean, a quarter of, or excuse me, 40 basis points on a turn is pretty negligible. And we're happy with the deleveraging that we've done. We have a fortress balance sheet at this point. And so we can be opportunistic when we need to. So that's kind of how we look at it.

Marla MarinAll right. Thank you.

William ScottThank you.

OperatorAnd we'll go next to Jack Vander Aarde with Maxim Group. Please go ahead.

Jack Vander AardeOkay. Good morning, guys. Congrats on the profitable results and continued debt reduction. Thanks for taking my questions. So I guess William and Zoran, maybe for both of you, it sounds like the revenue was a little bit softer due to favorable player outcomes, which is a good thing in the grand scheme of things because the wagering was up, I believe. It was also the strongest revenue quarter despite that in your company history as far as I can see. Just I guess how much of a driver was the World Cup for 2Q Kind of a two-part question here. How much of a driver was the World Cup in 2Q? And then do you expect that same kind of similar player outcomes for July World Cup betting when, you know, you're kind of in the final stages of the tournament, which should impact 3Q?

William ScottSorry, I saw Phil's going. Something— maybe I had to start an issue because there was something in my throat. Sorry.

Zoran MilosevicYeah, thank you for the question.

Zoran MilosevicBasically, World Cup was approximately one quarter of total revenues. So split between casino and betting was like 53% for casino, 47% sports betting, roughly. Within sports betting, 56%, 57% was World Cup. So majority of money came from World Cup. And as he said, so we are— it is below what we usually achieve on football, 30% below, but far more, 50-60% more than we expected that we will achieve. So we achieved approximately 6.2% margin. Normally we achieve on football like 10%, but we expected 2-4% with this World Cup. So that's, that's basically it. So it had huge impact when it comes to revenues. So, quarter of the revenue was basically stuck into World Cup betting only. And June was particularly bad, so the margin in June was lower, it was like 4%, because many favorites were winning and usually when you have qualifications, like any qualifications, there are many goals have been scored. Whenever you have many goals, that means that betting companies are losing.

Zoran MilosevicBut everything improved in July. So in July, where a lot of bad teams that obviously were not on the, on the level that they compete went out, and more or less same strength teams remained, and that actually became much more exciting for us and improved a lot. And from our core countries, actually almost none of— not a single country where we operate actually had national team within quarterfinals, semifinals, and so on. So that made our life easier in that segment.

Jack Vander AardeOkay, great. So it sounds like July was actually probably less favorable player outcomes, which— but still elevated wagering levels, so that— which is a good thing for the business. Okay, that was my presumption.

Zoran MilosevicOkay.

William ScottExcellent to hear.

Jack Vander AardeAnd then I guess maybe for Rich on the second half revenue guidance, the constant currency, good to hear, 8% to 10% up year over year with a more stronger fourth quarter as usual. Can you maybe speak to that year-over-year revenue growth trends at the segment level, just between the 3 segments you report? Are you expecting similar growth across all 3 segments year over year? Are some going to be more flat than others, maybe down? Any color would be helpful.

Rich ChristensenYeah, sure. And I'm going to kind of structure my answer around a constant currency look, right, just to take some of the FX noise out of it. You know, we have seen the US dollar strengthen recently, weaken prior to that. You know, it tends to have some of these more violent moves since it is a bit of a petrocurrency. At least acting as that currently. So if you look at the— if you kind of pull back the layers of this onion and you look underneath, what you're going to see is you're going to see Meridian continue to outpace the growth that we're expecting primarily in some of the smaller raffle ticket businesses. So when we talk about that 8% to 10% constant currency growth, our expectation is that Meridian is going to do roughly about 30% to 40% higher than that, and those other businesses will do about 30% or 40% lower than that. And what that really drives is it's a favorable mix shift, right?

Rich ChristensenBecause Meridian has about a 70% gross profit and those other businesses are in the mid to high 20s. And so it becomes more profitable income statement and you get some operating leverage as you kind of move forward. And that's important to really tease out of even our current results. If you look at Q2 and you just look at our historical performance on the income statement, Meridian was short roughly about, call it, 400 bps of gross profit due to all the reasons that Zoran has described to you. You know, there was some favorable casino outcomes of about $1.2 million, there's about the same amount of headwinds that we saw because of the World Cup, you know, those favorable outcomes that we mentioned. And then there was even some FX headwinds against our forecast of roughly about $700,000. If you move those back in and you get to more of a run rate gross profit for Meridian, we had a phenomenal quarter.

Rich ChristensenWe're really excited about the customer registrations, you know, being up 37%. And even seeing what that is doing for our Q3 results so far. So anyway, that's kind of what we're seeing in Q3, Q4, kind of that mix shift and kind of helping you kind of piece together what that means as far as the income statement moving forward. Anything else, Jack?

Jack Vander AardeNo, that was great. That's really helpful. And I appreciate that. It sounds positive as well. Just maybe one more question for the whole team, I guess. If there's just any comments, because it has been a buzz topic in the space lately.

Jack Vander AardeIs just on the prediction side of the emerging vertical globally now. Any strategic comments on predictions market or the opportunity there and how Meridian fits in? And I know you've been involved with this for quite some time, but might as well ask you.

William ScottThanks. That is the most interesting question because everyone's got a very interesting debate with regards to it. And so, what's the future? I think prediction markets, Betfair was one of the first guys to do it and they just, Betfair, unfortunately, didn't come up with a great name called prediction markets, and they made it more towards a sophisticated player. I remember meeting them years ago saying, call it something simpler, instead of a lay, et cetera, and you'll be more successful. I think it's going to be there part of the mix coming out, and I know that we're obviously constantly looking at that. I know Zoran will add some more to that. Clearly, you know, it's very difficult to guess how successful it would be outside of the US because, you know, it all depends on the US. It's very successful because it's California and Texas where there's no sports betting. So, you know, firstly, you know, it seems to be where it happens.

William ScottBut I think it does have a place. You know, everyone seems to think it has an interesting place in the market where it's going to be significant outside of the US or not. Then from the US perspective, one doesn't know. As it became a huge market with one individual at the CFTC, CFTC, I think it is, the Futures Exchange, at the same time, it will become totally irrelevant if someone changes the rules. It's either, hopefully, it'll either be too big that it can't fail, or it'll get too big and someone will make sure it fails. It's very difficult to tell. Zoran, what's your view?

Zoran MilosevicThank you, William. Basically, Meridian is involved in prediction markets for many years, and we run it currently in 3 countries where it's regulatory allowed. We are currently improving our product, and we are very quite bullish on it. And in terms of profitability and volumes, it's In our system, it's still quite low, but it's a great marketing tool. So basically, this is the most effective marketing tool that can, that exists because it's customer-driven marketing content. So what kind of ideas customers have on what they want to bet, it's like something what actually it cannot be made up by any, the best marketing team by far. That is current state of prediction markets in Meridian. So we use it, we have it in like 3 countries. It's very small, but it's a great marketing tool. But we are like on the track to improve it a lot.

Jack Vander AardeOkay, excellent. Well, Zoran, William, Rich, I appreciate the time. Congrats and look forward to tracking the story.

Rich ChristensenThank you.

William ScottThanks, Jack.

OperatorThank you. And we'll take our next question from Steven Silver with Argus Research. Please go ahead.

Steven SilverThanks, operator, and thanks for taking my questions. And congratulations on the continued delevering of the balance sheet and the operating cash flow expansion. So you guys mentioned the strong registration growth ahead of the World Cup. Just curious as to whether there were any standout markets that you view as really the key opportunities for cross-selling opportunities to casino moving forward or whether their registration expansion was more broad-based?

William ScottI'll give that one to Zoran.

Zoran MilosevicThank you for the question. We see the trends when it comes to cross-sell everywhere. So I couldn't basically take any market particularly, which I would highlight. But what is happening is that there is some kind of delay in terms of market, in terms of revenue split between casino and sports betting. For example, Western Europe migrated— majority of customers migrated to casino, let's say, maybe 10— not 10, but 5 years ago since COVID happened, let's say. Eastern Europe is breaking even, I think, in 1 or 2 years from now. So it's still like 52% sports betting, 48% casino. Africa also is, let's say, 60% sports betting, 40% casino. And Central Latin America, we have majority casino customers. They migrated already. So these trends are happening everywhere. So we can see, we can say that the trend percentage of migration is more or more or less similar. But the only difference is the region where the position of sports betting is in certain region.

Zoran MilosevicSometimes we see delays. Like we see delays in Eastern Europe or we see delays in Africa. In terms that sports betting is still dominant, but you see that it's losing battle. And it's just a question in, as I said, in Eastern Europe it will happen in 1-2 years most, in Africa 2-3 years most when casino will take over. And that is basically with the influence of younger generations. Younger generations just want faster outcomes and casino provides them that, and that's basically the whole theory behind it.

William ScottYeah, and I think from an overall perspective, I think the World Cup, you know, through the significantly additional games with additional teams, but I think even the controversy amongst it, etc., made it quite exciting. Obviously, I was slightly biased, hit by more than most countries. I live in Spain, so Spain clearly were celebrating significantly on the—. With their results. But yeah, I think it's a lot of excitement from it. It got a lot of attention everywhere.

Steven SilverGreat. And one more, if I may. So you guys have been investing to scale operations for some time, and then you increased investment leading into the World Cup. So now that the World Cup has passed and the company has been achieving GAAP profitability over the last couple of quarters, I'm curious as to where you see the company's position just in terms of the overall investment cycle and what are some of the key areas for ongoing investment?

William ScottI had the detail designed where we'd make the investment, but the reality is that this is a journey, not a destination. Constantly have to keep improving the product, A, to keep ahead of the competitors. And so they will constantly— obviously we've built the Atlas system, which is a significant investment, but we have to constantly continue to invest to deliver in a highly competitive environment where the competition is continuing to invest. So, but Zoran can give you greater feel where the actual investments in poor, poor Bashful be? Obviously he did speak about prediction markets.

Zoran MilosevicSorry.

Zoran MilosevicYeah, thank you for the question. I fully agree with William. Basically on every single front we are investing. So from improving our gaming systems, and especially we had heavy investments when it comes to marketing, marketing software. So everything related to CRMs, and of course we are also all the time looking for new opportunities to make some acquisitions of our B2B partners. And so that is something what is always on the table. I cannot of course disclose anything, but we are constantly, constantly looking and investing into these areas.

Steven SilverGreat. Thank you for taking the questions and good luck in the second half.

Zoran MilosevicThank you.

OperatorAs a reminder, if you'd like to ask a question, it is star and 1. We'll take our next question from Danial Yermakhan with Freedom Brokers. Please go ahead.

Danial YermakhanHey guys. Hey, William, Zoran, Rich. Congrats again with greater than expected results in World Cup. Just, Zoran, you mentioned that you gained a big cohort of new customers and How would you assess the retention rate? I mean, are these customers willing to stay more than the regular customers? And from which country are these customers from? Are they from Brazil or Europe or Africa?

Zoran MilosevicYeah, when we were talking about this 519,000, it— they came from all countries. So it's basically from from all. Basically our churn rate and retention rate depends on the market. In the mature markets where we are present for decades, our retention rate is higher and churn rate is lower. And vice versa, in the markets where we are new, basically it's very hard— it's not actually hard to acquire a customer, but let's say to get new registrations, this is not a difficult thing. What is hard is to make first deposit and especially to make a second deposit in the countries where we are new, when there is no particular brand awareness and so on. So it's basically usual marketing headaches which we need to solve. So in the new countries we need to develop a lot of brand awareness, which will enable us to have a high retention rates. So that is basically what we are busy with.

Danial YermakhanOkay, thanks. And, uh, well, basically most of the knockout games and the final games were in July. And, uh, just briefly, can you, uh, describe—.

Zoran MilosevicWas favorable on your side or any expectation that Yeah, for us this World Cup, when it reached the finals, it was easy because, as I said, we didn't have any national team from the countries where we operate participating. If Brazil won the World Cup, we will probably close the company. I'm joking, of course, but it would be a headache. So Spain, England, France, whoever was a participant, we don't operate there, so there was no emotional betting. So for us it was easy. So when we reached the finals, so we were like very happy with, with any outcome was good for us. So we didn't have that problem like companies operating in Spain. So corporate companies that are operating in Spain are like demolished in July.

William ScottSo yeah, the very strange part is the Argentinians aren't very popular in Latin America. So the Iran, you know, the only people supporting, you know, that was the biggest country supporting Argentina was Argentina, you know, their fellow continent didn't want to support them, they were supporting Spain.

Zoran MilosevicActually, that was the biggest headache we had, was bets in Brazil against Argentina. So everyone was just like— I think 99% of all bets were against Argentina. But the good thing is that once your national team is out, interest for World Cup decreases for 80-90%. So basically, even if in some country they bet against another country, if their national team is not involved, that's a relaxed situation for us. So the biggest problem, if you have your national team participating and winning constantly, that's like a losing situation for every betting company, including us as well.

Danial YermakhanYeah, and just one more quick question. Well, in the US, soccer wasn't like really popular before. And is there any expectations about the US clients you gain? Do you expect them to keep betting on soccer events in the future?

Zoran MilosevicLook, we are not operating in US, so I can just tell you my opinion about it, but it's opinion-based.

Zoran MilosevicThis was record-level attendance in U.S. This is by far the biggest sporting event and basically a lot of private companies are making major investments when it comes to soccer. So I expect soccer will be very, very popular in U.S. 5-10 years. Already it's popular among female population. As you know, I think U.S. was 4th time consecutive world champions in FIFA World Cup because there is a FIFA World Cup for women as well. And, and US were like 4 times consecutive champions. So it's actually quite popular in terms of female population, not yet there when it comes to male population, but it will get there. So I don't have a doubt.

William ScottOkay, yeah, I think I agree with Zoran. I think that sport soccer is, is going to gain traction there from a betting perspective. But, you know, in the US, it's, you know, they— it's, it's not like they needed another sport to, uh, follow. Uh, they got big sports already, so it will gain in importance. But, you know, there's still NFL and Hockey League and basketball, etc.

Danial YermakhanOkay, yeah, thanks. Congrats again.

William ScottThank you very much.

Zoran MilosevicThank you.

OperatorAt this time, we have no further questions in queue. I'd like to turn it back over to our speakers for any closing remarks.

William ScottI think, first of all, I want to congratulate everyone who works for Meridian for all the hard work they put in, and particularly, obviously, Zoran and Rich, who kind of helped it better to be in, you know, We fight every single day to make sure that we're focused on delivery, delivery, delivery. That's all we think about every day. And thank you very much for being supportive shareholders.

OperatorWe'd like to thank everybody for their participation on today's conference. Please feel free to disconnect your line at any time and have a great day.

William ScottThank you.

Danial YermakhanThank you.

Marla MarinThank you.