Meridian Holdings Inc. (NASDAQ: MRDN) on Tuesday reported a third-quarter net loss attributable to the company of $13.3 million, or $1.05 per share, compared with net income of $0.6 million a year earlier, as revenue slipped 3% to $46.0 million and the company absorbed $11.5 million in non-cash impairment charges. The results, announced via NEWMEDIAWIRE, underscore the regulatory and competitive pressures facing the sports betting and gaming group, even as its core Meridianbet business continues to grow and its balance sheet strengthens.
The largest impairment, $5.5 million, stemmed from the full write-off of the company's Brazilian gaming license and related intangible assets after Brazil issued Provisional Measure No. 1,394/2026 on September 25, prohibiting fixed-odds betting, including online casinos, by all operators. Operators were required to take platforms offline and return player balances in early October, and the measure terminated existing federal authorizations 30 days after publication without reimbursing fees already paid. A further $5.9 million goodwill impairment was recorded in the reporting unit holding RKingsCompetitions Ltd., the company's 80% interest in Classics Holdings Co. Pty Ltd., which owns Classics For A Cause, after continued operating losses. Revenue from Brazil was not material to the company, and Meridian Holdings said it does not expect to resume gaming operations there during the remainder of 2026, though it intends to keep a limited local presence while Congress and the courts decide on the measure.
Despite the quarterly loss, Meridian Holdings generated $17.7 million in operating cash flow for the first nine months of 2026, up 3% year-over-year, which fully funded investment activities and $9.0 million in debt repayment. Total debt fell 47% to $24.1 million as of September 30, and net debt dropped 65% to $8.1 million, marking a seventh consecutive quarter of deleveraging without raising additional equity capital. Cash and cash equivalents stood at $16.0 million against $7.8 million of bank and other loans. In September, the company extended the remaining $15.6 million of acquisition consideration owed to former Meridianbet Group owners, who are related parties, to November 1, 2031, with no interest.
Meridianbet Group, which represented 72% of company revenue, grew revenue 2% to $33.1 million in the quarter, led by online casino revenue up 17% to $17.1 million. For the nine months, Meridianbet revenue rose 16% to $103.8 million, with online casino up 21% to $46.9 million. New registrations climbed 25% to 458,680, and customers deposited $101.1 million, up 9%. However, online sports betting revenue fell 15% to $8.7 million as customer-favorable sports results lowered the margin to 7.4% from 8.2%. Expanse Studios grew third-party revenue 114%, and MexPlay in Mexico grew revenue 55%.
Revenue at RKings and Classics for a Cause fell 19% to $9.1 million, reflecting increased market competition and reduced effectiveness of digital advertising channels. The company also flagged that amendments to Australia's Interactive Gambling Act affecting trade promotion gambling services take effect January 1, 2027, and Classics for a Cause is working on changes to its business model to comply.
Meridian Holdings updated its full-year 2026 outlook, now expecting revenue of $195 million to $198 million, assuming no resumption of operations in Brazil. Chief Executive Officer Zoran Milosevic said the company remains focused on improving margins through targeted marketing, retail footprint optimization and growth in higher-margin online casino, with a goal of returning to the profitability demonstrated in the first half of 2026. For investors, the quarter highlights the risks of regulatory shifts in emerging markets and the importance of cash generation and debt reduction, while the strong performance of online casino and B2B operations offers a potential path to recovery.
