Galaxy Gaming CEO Matthew Reback says the supplier is in a stronger position to invest in new technology after Evolution abandoned its proposed acquisition of the business.
Evolution ended its two-year pursuit of Galaxy last month by terminating an acquisition agreement first announced in July 2024. The transaction, valued at around $85m, would have given Evolution full ownership of the casino games supplier.
Speaking shortly before the deal was cancelled, Evolution CEO Martin Carlesund said the outcome would have “no material impact” on Evolution because of Galaxy’s size, although he described the supplier as a “great company”.
Evolution also said it would continue working with Galaxy despite the acquisition falling through.
Galaxy Gaming Releases Second Quarter Results
Galaxy received a $5.2m termination fee after the deal ended, giving the business additional capital to support its own development plans.
“Our balance sheet has gone from consuming cash flow to funding our growth” Reback said. “And with the $5.2m termination fee received subsequent to quarter end in connection with the terminated Evolution merger agreement, we have never been better positioned to invest in our best ideas.
“Our second-quarter results demonstrated yet again continued momentum for the business. We continued executing our plan through the merger process with Evolution, and the results show it. I am excited about what this team will build, and how efficiently we are now able to build it.”
Galaxy reported second-quarter revenue of $7.5m for the three months to 30 June, up 5% year-on-year. Adjusted EBITDA increased 11% to $3.5m, while core revenue rose 7% on stronger recurring licence income. Digital revenue was also 10.7% higher than the same quarter last year.
Revenue and EBITDA growth support Galaxy’s post-deal strategy
The supplier stated that the quarterly performance reflected internal execution during the merger process, any pause in investment while the transaction remained under review.
Costs increased during the period, partly because of expenses linked to the terminated Evolution transaction. That offset some of the revenue growth and pushed operating profit down 2.3% to $1.9m.
Pre-tax profit reached $1.1m, slightly ahead of the previous year. After $64,268 in income tax, net profit rose 4.9% to $996,978. However, comprehensive net profit fell 19.5% to $968,433 after a negative foreign currency translation impact.
Reback said Galaxy’s focus is firmly on product development, with additional games to launch during the autumn and several new products being tested with major operators.
“Beyond the numbers, our amazing team at Galaxy has worked hard to ensure that this is a different and better business than the one we ran two years ago,” he said. “Our platform is more stable and more scalable; our systems are performing well in the field, and several new products are in field trials with major operators today.
“That is why I believe we are a stronger company today than we were two years ago, and I am excited about the future.”
According to the CEO, Galaxy losing the Evolution deal gives it more freedom to prove its capabilities. The termination fee and improving EBITDA ensure that the company enjoys a useful window to invest instead of spending the next few quarters recovering from the failed acquisition.
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