Meridian Holdings Inc. (NASDAQ: MRDN), a sports betting and gaming group, reported third-quarter 2026 revenue of $46.0 million, a 3% decline year-over-year, and a net loss attributable to the company of $13.3 million, or $(1.05) per basic and diluted share. The loss included $11.5 million in non-cash impairment charges, driven by Brazil's prohibition of fixed-odds betting and continued operating losses at certain reporting units.
The company's Meridianbet Group segment grew nine-month revenue 16% to $103.8 million, led by online casino revenue up 21% to $46.9 million. For the first nine months of 2026, consolidated revenue rose 10% to $146.3 million. Operating cash flow was $17.7 million, up 3% year-over-year, and free cash flow increased to $10.9 million from $2.5 million in the prior-year period.
Brazil's Provisional Measure No. 1,394/2026, issued on September 25, 2026, prohibited fixed-odds betting, including online casinos, by all operators. Meridian suspended its Brazil operations and wrote off its Brazilian gaming license and related intangible assets in full, a non-cash charge of $5.5 million. The measure terminated existing federal authorizations without reimbursement of fees already paid. Revenue from Brazil was not material to the company, and Meridian does not expect to resume gaming operations there during the remainder of 2026.
An additional $5.9 million goodwill impairment was recorded in the reporting unit that holds RKingsCompetitions Ltd., the company's 80% interest in Classics Holdings Co. Pty Ltd., which owns Classics For A Cause Pty Ltd, and GMAG, after continued operating losses. Third-quarter results also reflected customer-favorable sports results, which lowered the online sports betting margin to 7.4% from 8.2% a year earlier, as well as higher operating costs, including marketing around the FIFA World Cup at Meridianbet Group and bad-debt expense at GMAG.
Despite the loss, Meridian continued to strengthen its balance sheet. Total debt was $24.1 million as of September 30, 2026, down 47% from a year earlier, and net debt was $8.1 million, down 65%. The quarter marked the company's seventh consecutive quarter of deleveraging, achieved without raising additional equity capital in 2026. Cash and cash equivalents stood at $16.0 million, compared with $7.8 million of bank and other loans. In September 2026, Meridian extended the remaining $15.6 million of acquisition consideration owed to the former owners of Meridianbet Group to November 1, 2031, with no interest.
"Our core business remains healthy and outside one-off adjustments continues to generate cash to drive its own growth," said Zoran Milosevic, Chief Executive Officer. "We remain focused on improving margins and driving operational efficiency through more targeted marketing and promotional costs, continued optimization of our retail footprint and expected growth in higher-margin online casino, with a goal of returning to the profitability we demonstrated in the first half of 2026."
The company updated its full-year 2026 outlook, now expecting revenue of between $195 million and $198 million, assuming no resumption of operations in Brazil in 2026. The revision reflects the Brazil suspension, lower expected revenue at RKings and Classics for a Cause, and third-quarter sports results that favored customers. For investors, the results highlight the impact of regulatory risk in emerging markets and the importance of cash generation and debt reduction even amid quarterly losses. The full release is available via www.newmediawire.com.
