Galaxy Gaming, Inc.
For the period ended Dec 31, 2025. Filed Mar 30, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 30, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-24.
0000950170-25-043370
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-30.
0001193125-26-129503
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 40 previous paragraphs and 43 current paragraphs.
20 unchanged; 15 reworded; 8 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Research and development expenses for the year ended December 31, 2025, were $931,307 compared to $1,057,183 for the comparable prior-year period, representing a decrease of $125,876, or 11.9%. This decrease was driven primarily by reduced employee compensation costs as well as reduced travel costs.
Current report
Stock-based compensation expenses decreased $379,242, or 41.2% for the year ended December 31, 2025, as compared to the same period in the prior year. The decrease was primarily attributable to reduced stock‑based compensation expense for employees, driven largely by the absence of a $194,600 RSU expense recognized in the prior year for an executive, as well as reduced stock‑based compensation for the Board of Directors in 2025 following a reduction in board membership from five to four.
Current report
Interest expense decreased $5,478,282, or 60.4% for the year ended December 31, 2025, as compared to the same period in the prior year. This decrease was due to reduced interest rates and a reduced principal balance as a result of the refinancing of our long-term debt on January 6, 2025. Interest income decreased $735,190, or 94.1% compared to the prior year period, primarily due to lower cash balances.
Current report
The Company recognized a loss on extinguishment of debt of $2,969,585 for the year ended December 31, 2025 related to the refinancing of our debt from Fortress to BMO, primarily driven by the write-off of unamortized debt issuance costs.
Current report
Income tax provision was $144,349 for the year ended December 31, 2025, compared to income tax provision of $57,647 for the comparable prior-year period. The increase was driven by higher state income taxes and the change in valuation allowance. In addition, the prior-year tax provision included a tax benefit from the release of an uncertain tax position reserve, which was not applicable in the current-year period.
Current report
(7) Represents the loss on the extinguishment of debt associated with the refinancing of our debt from Fortress to BMO.
Current report
(8) Represents the total amount expended on tariffs.
Current report
Our operating activities provided cash of $7,697,622 for the year ended December 31, 2025, compared to cash provided of $4,098,634 for the year ended December 31, 2024. This change is mainly attributable to net income in the current year compared to a net loss in the prior year period. This change also reflects a variance of $2,150,208 in use of assets and liabilities that relate to operations. Additionally, the Company recognized a loss on extinguishment of debt of $2,969,585 due to the refinancing of the Fortress loan to BMO, depreciation and amortization increased $346,172 primarily driven by amortization related to intangible assets placed in service and to a lesser extent, depreciation related to assets deployed at client locations, $1,375,377 decline in amortization of debt issuance costs and debt discounts, $379,242 decline in stock-based compensation and an increase in bad debt of $88,053.
Removed paragraphs (5)
Previous report
Research and development expenses for the twelve months ended December 31, 2024, were $1,057,183 compared to $823,189 for the comparable prior-year period, representing an increase of $233,994, or 28.4%. This increase was driven by higher payroll costs due to increased headcount, employee bonuses, and the ongoing development of internal software placed in service.
Previous report
Stock-based compensation expenses decreased 10.0% for the twelve months ended December 31, 2024, as compared to the same period in the prior year. The decrease was primarily due to changes in the level and composition of stock-based compensation paid to members of our Board of Directors in 2024, which included a reduction in the number of board members for part of the year. Additionally, lower stock-based compensation for employees and consultants contributed to the decline.
Previous report
Interest expense remained relatively flat at $9,066,203 for the twelve months ended December 31, 2024, as compared to interest expense of $9,063,112 for the comparable prior-year period. Interest income increased 27.8% compared to the prior year period, benefitting from higher cash balances and interest rate fluctuations.
Previous report
Income tax provision was $57,647 for the twelve months ended December 31, 2024, compared to income tax provision of $79,228 for the comparable prior-year period. The decrease in expense is primarily driven by the increase in loss before provision for income taxes.
Previous report
Our operating activities provided cash of $4,098,634 for the year ended December 31, 2024, compared to cash provided of $2,729,477 for the year ended December 31, 2023. This change is attributable to a favorable variance of $1,726,976 in use of assets and liabilities that relate to operations. Additionally, depreciation and amortization increased $589,046 related to increased capitalization of intangible assets and offset by a $102,304 decline in stock-based compensation from the vesting of stock options and a $70,862 decrease in reserve for credit losses.
Reworded paragraphs (15)
Previous wording
We develop, acquire, assemble and market technology and entertainment-based products and services for the gaming industry for placement on casino floors and on legal internet gaming sites. Our products and services primarily relate to licensed casino operators’ table games activities and focus on either increasing their profitability and productivity or expanding their gaming entertainment offerings in the form of proprietary table games, electronically enhanced table game platforms, fully-automated electronic tables and other ancillary equipment. In addition, we license intellectual property to legal internet gaming operators. Our products and services are offered in various highly regulated markets and certain non-regulated (where such is not illegal) markets throughout the world. Our products are assembled at our headquarters in Las Vegas, Nevada, as well as outsourced for certain sub-assemblies in the United States.
Current wording
We develop, acquire, assemble and market technology and entertainment-based products and services for the gaming industry for placement on casino floors, card rooms and on legal internet gaming sites. Our products and services primarily relate to licensed casino operators’ table games activities and focus on either increasing their profitability and productivity or expanding their gaming entertainment offerings in the form of proprietary table games, electronically enhanced table game platforms, and other ancillary equipment. In addition, we license intellectual property to legal internet gaming operators. Our products and services are offered in various highly regulated markets and certain non-regulated (where such is not illegal) markets throughout the world. Our products are assembled at our headquarters in Las Vegas, Nevada, as well as outsourced for certain sub-assemblies in the United States.
Previous wording
On July 18, 2024, we entered into the Merger Agreement providing for the Company’s acquisition by Evolution Malta Holding Limited in a cash transaction. The Merger is subject to the satisfaction or waiver of certain closing conditions, including approval by at least a majority of the voting power of the outstanding shares of the Company’s common stock of the Merger Agreement and the transactions contemplated thereby, including the Merger, and the receipt of certain gaming regulatory approvals. At the special meeting of the Company’s stockholders held on November 12, 2024, stockholders voted to approve the Merger. The Merger is expected to be completed in mid-2025, subject to satisfaction or waiver of the closing conditions. Upon completion of the Merger, the Company will become a privately held company and shares of Company’s common stock will no longer be listed on any public market.
Current wording
On July 18, 2024, we entered into the Merger Agreement providing for the Company’s acquisition by Evolution Malta Holding Limited in a cash transaction. The Merger is subject to the satisfaction or waiver of certain closing conditions, including stockholder approval of the Merger Agreement and the receipt of certain gaming regulatory approvals. At the special meeting of the Company’s stockholders held on November 12, 2024, stockholders voted to approve the Merger. Under the terms of the Merger Agreement, the outside date for completion of the Merger was automatically extended from July 18, 2025 to October 18, 2025 and then subsequently automatically extended to January 18, 2026, in each case, due to the condition with respect to the receipt of gaming regulatory approvals not being satisfied as of such outside dates. On November 24, 2025, pursuant to an amendment to the Merger Agreement, the outside date for completion of the Merger was extended from January 18, 2026 to July 17, 2026. The Company and Evolution continue to be actively engaged with gaming regulators to secure the remaining regulatory approvals to satisfy the gaming approval closing condition. However, no assurance can be given that the required regulatory approvals will be obtained and, even if all such approvals are obtained, no assurance can be given to the timing of the regulatory approvals. We expect the Merger to be completed by the extended outside date of July 17, 2026 subject to satisfaction or waiver of the closing conditions. Upon completion of the Merger, the Company will become a privately held company and shares of Company’s common stock will no longer be listed on any public market.
Previous wording
Recurring core revenue increased $4,301,373, or 25.7% for the twelve months ended December 31, 2024, as compared to the same period in the prior year. This growth was primarily driven by favorable revenue from our EZ Baccarat distribution arrangement, which began in September 2023, along with the continued success of our side bets and progressive products. Royalties netted against gross core revenue increased $2,147,266 for the twelve months ended December 31, 2024, as compared to the same period in the prior year. This increase was attributable to royalties paid on our EZ Baccarat revenues. Perpetual license sales of our progressive gaming systems was $3,502,053, representing a 3.4% percent decrease for the twelve months ended December 31, 2024, as compared to the same period in the prior year. Gross digital revenues of $14,283,982, increased $2,905,064, or 25.5% for the twelve months ended December 31, 2024, as compared to the same period in the prior year. This favorable growth reflects the ongoing expansion of digital content into new markets and the continued success of our competitive branded products, particularly the well-known 21+3. Net of royalties, digital revenues increased to $1,917,579, representing growth of 22.7% for the twelve months ended December 31, 2024, as compared to the same period in the prior year.
Current wording
Recurring core revenue decreased $89,017, or 0.4% for the year ended December 31, 2025, as compared to the same period in the prior year. This decrease was primarily driven by the impact of casino closures experienced in North America and partially offset by increased revenue in Europe, Middle East and Africa and to a lesser extent placements of our new GOS progressive gaming system, which launched earlier in the year. Royalties netted against gross core revenue decreased $179,454 for the year ended December 31, 2025, as compared to the same period in the prior year. This decrease was due to lower royalties paid to third-parties for licensed intellectual property. Perpetual license sales of our progressive gaming systems was $1,181,379, representing a 66.3% percent decrease for the year ended December 31, 2025, as compared to the same period in the prior year. This decline was primarily driven by a strategic decision by management to prioritize higher-margin, recurring revenue streams, as well as the timing of customer purchases. Gross digital revenues of $16,326,504, increased $2,042,522, or 14.3% for the year ended December 31, 2025, as compared to the same period in the prior year. This favorable growth reflects the ongoing expansion of digital content into new markets and the continued success of offering competitive products with brand recognition. Net of royalties, digital revenues increased by $1,366,323, representing growth of 13.2% for the year ended December 31, 2025, as compared to the same period in the prior year.
Previous wording
Cost of ancillary products and assembled component expense increased $246,505, or 19.5% for the twelve months ended December 31, 2024, as compared to the same period in the prior year. This increase is primarily driven by product mix, with a larger proportion of lower-margin items sold. Additionally, there was a secondary impact from higher component costs related to the perpetual license sales of our progressive gaming systems.
Current wording
Cost of ancillary products and assembled component expense decreased $729,399, or 48.3% for the year ended December 31, 2025, as compared to the same period in the prior year. The activity in cost of ancillary products and assembled components reflects the component costs associated with the perpetual license sales of our progressive gaming systems.
Previous wording
Selling, general and administrative expenses increased $4,008,829, or 25.6% for the twelve months ended December 31, 2024, as compared to the same period in the prior year. This change was due to expenses associated with special projects of $3,489,955, notably legal expenses incurred related to the acquisition by Evolution and to a lesser extent driven by higher internal labor and related expenses (base salary, commissions, payroll-related taxes, bonus accrual and travel), increased repair and maintenance costs of leased machines, and increased information technology costs. Without the costs associated with the acquisition by Evolution and excluding the related transaction fees of $3,489,955, selling, general, and administrative expenses increased $518,874, or 3% for the twelve months ended December 31, 2024, as compared to the same period in the prior year.
Current wording
Selling, general and administrative expenses decreased $2,453,285, or 12.5% for the year ended December 31, 2025, as compared to the same period in the prior year. This decrease was primarily driven by a $2,335,202 reduction in costs associated with special projects, most notably legal expenses incurred related to the acquisition by Evolution. Normalized for the impact of special projects and excluding the related fees of $1,154,753 and $3,489,955 for the years ended December 31, 2025 and December 31, 2024, respectively, selling, general, and administrative expenses decreased $118,083, or 0.7% for the year ended December 31, 2025, as compared to the same period in the prior year. The decrease was primarily driven by lower legal and accounting expenses unrelated to special projects and partially offset by increased tradeshow expenses.
Previous wording
Depreciation and amortization increased $589,046, or 25.9% for the twelve months ended December 31, 2024, as compared to the same period in the prior year. This increase was primarily driven by depreciation expense associated with incremental placements of assets deployed at client locations.
Current wording
Depreciation and amortization increased $346,172, or 12.1% for the year ended December 31, 2025, as compared to the same period in the prior year. This increase was primarily driven by amortization expense for certain intangible assets placed in service and to a lesser extent, depreciation expense associated with incremental placements of assets deployed at client locations.
Previous wording
Primarily as a result of the factors described above, we had a net loss of $2,627,110 for the twelve months ended December 31, 2024, as compared to a net loss of approximately $1,807,586 for the same period in the prior year.
Current wording
Primarily as a result of the factors described above, we had net income of $1,483,619 for the year ended December 31, 2025, as compared to a net loss of approximately $2,627,110 for the same period in the prior year.
Previous wording
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”). Adjusted EBITDA includes adjustments to net loss to exclude interest, income taxes, depreciation, amortization, stock-based compensation, foreign currency exchange (gain), and severance and other expenses related to litigation. Adjusted EBITDA is not a measure of performance defined in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). However, Adjusted EBITDA is used by management to evaluate our operating performance. Management believes that disclosure of the Adjusted EBITDA metric offers investors, regulators and other stakeholders a view of our operations in the same manner management evaluates our performance. When combined with U.S. GAAP results, management believes Adjusted EBITDA provides a comprehensive understanding of our financial results. Adjusted EBITDA should not be considered as an alternative to net income or (loss) to net cash provided by operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating our performance. A reconciliation of "U.S. GAAP" net income to Adjusted EBITDA is as follows:
Current wording
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA includes adjustments to U.S. GAAP net income (loss) to exclude interest, income taxes, depreciation, amortization, stock-based compensation, foreign currency exchange (gain), and severance and other expenses related to litigation, and other adjustments to reflect changes that occur in our business but do not represent ongoing operations, including loss on extinguishment of debt. Adjusted EBITDA is not a measure of performance defined in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). However, Adjusted EBITDA is used by management to evaluate our operating performance. Management believes that disclosure of the Adjusted EBITDA metric offers investors, regulators and other stakeholders a view of our operations in the same manner management evaluates our performance. When combined with U.S. GAAP results, management believes Adjusted EBITDA provides a comprehensive understanding of our financial results. Adjusted EBITDA should not be considered as an alternative to net income or (loss) to net cash provided by operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating our performance. A reconciliation of U.S. GAAP net income (loss) to Adjusted EBITDA is as follows:
Previous wording
(5) Represents non-cash charge related to the write off of certain fixed assets.
Current wording
(5) Represents gains and losses related to the write off of certain fixed assets.
Previous wording
As of December 31, 2024, we had total current assets of $24,171,920 and total assets of $41,010,731. As of December 31, 2023, we had total current assets of $22,156,035 and total assets of $40,475,800. The increase in current assets as of December 31, 2024, compared to December 31, 2023, was due to the increased cash and cash equivalents driven by cash provided by operating activities and increased accounts receivable. The increase in total assets as of December 31, 2024, compared to December 31, 2023, was primarily due to the increase of current assets noted above and offset by a decrease in other intangible assets and operating lease right-of-use assets as a result of amortization in 2024.
Current wording
As of December 31, 2025, we had total current assets of $11,569,839 and total assets of $27,500,619. As of December 31, 2024, we had total current assets of $24,171,920 and total assets of $41,010,731. The decrease in current assets as of December 31, 2025, compared to December 31, 2024, was primarily due to the decreased cash and cash equivalents driven by cash used to refinance our debt from Fortress to BMO. The decrease in total assets as of December 31, 2025, compared to December 31, 2024, was primarily due to the decrease of current assets noted above and a decrease in other intangible assets and operating lease right-of-use assets as a result of amortization in 2025.
Previous wording
Our total current liabilities as of December 31, 2024, increased to $6,602,744 from $4,875,967 as of December 31, 2023, primarily due to an increase in accounts payable related to professional fees in connection with the acquisition by Evolution.
Current wording
Our total current liabilities as of December 31, 2025, increased to $8,055,001 from $6,602,744 as of December 31, 2024, primarily due to an increase in the current portion of long-term debt for upcoming payments to BMO.
Previous wording
We continue to file applications for new or enhanced licenses in several jurisdictions, which may result in significant future legal and regulatory expenses. A significant increase in such expenses may require us to postpone growth initiatives or investments in personnel, inventory and research and development of our products. It is our intention to continue such initiatives and investments.
Current wording
We continue to file applications for new or enhanced licenses in several jurisdictions, which may result in significant future legal and regulatory expenses. A significant increase in such expenses may require us to postpone growth initiatives or investments in personnel and research and development of our products. It is our intention to continue such initiatives and investments.
Previous wording
Investing activities used cash of $1,622,604 for the year ended December 31, 2024, and $2,955,681 for the year ended December 31, 2023. This decrease in cash used was primarily due to the increase in the transfer of title of assets deployed at client locations to perpetual license customers in conjunction with a decrease in cash used for the acquisition of assets deployed.
Current wording
Investing activities used cash of $2,825,540 for the year ended December 31, 2025, and $1,622,604 for the year ended December 31, 2024. This increase in cash used was primarily due to the decrease in the transfer of title of assets deployed at client locations to perpetual license customers, along with higher spending on assemblies in process, increased investment in internally developed software, and additional acquisitions of property and equipment.
Previous wording
Cash used in financing activities for the year ended December 31, 2024, was $886,126. This compares to $1,367,304 cash used by financing activities for the twelve months ended December 31, 2023. The decrease in cash used was primarily due to the absence of principal payments on our borrowings based on the "Excess Cash Flow" calculation as defined by the terms in the Fortress Credit Agreement (Note 9), in the 2024 period.
Current wording
Cash used in financing activities for the year ended December 31, 2025, was $18,856,227. This compares to $886,126 cash used by financing activities for the year ended December 31, 2024. The increase in cash used was primarily due to the refinancing of our debt from Fortress to BMO and principal payments made on the BMO term loan in the current year.
Previous wording
Credit Facility. In November 2021, we entered into a $60,000,000 senior secured term loan agreement. Subsequent to December 31, 2024, we entered into a new credit agreement that provides for a $2,000,000 senior secured revolving credit facility and a $45,000,000 senior secured term loan. On January 6, 2025, we borrowed $45,000,000 under the new term loan and used this amount plus cash on hand to repay all amounts outstanding under the previous term loan agreement, which was terminated.
Current wording
Credit Facility. On January 6, 2025, we entered into a new credit agreement with BMO that provides for a $2,000,000 senior secured revolving credit facility and a $45,000,000 senior secured term loan. On January 6, 2025, we borrowed $45,000,000 under the new term loan and used this amount plus cash on hand to repay all amounts outstanding under the previous term loan agreement, which was terminated. Pursuant to the terms of the Credit Agreement, the new term loan and new revolving credit facility will mature on January 6, 2028, as the merger with Evolution Malta Holding Limited was not completed by December 31, 2025.