Meridian Holdings Inc. (NASDAQ: MRDN) reported a net loss attributable to the company of $13.3 million, or $(1.05) per basic and diluted share, for the third quarter ended September 30, 2026, a sharp reversal from net income of $0.6 million in the prior-year period. The loss included $11.5 million of non-cash impairment charges, which the company said reflected the full write-off of its Brazilian gaming license and related intangible assets after Brazil prohibited fixed-odds betting, as well as a goodwill impairment tied to its RKings and Classics for a Cause reporting unit. Revenue for the quarter was $46.0 million, down 3% year-over-year, according to the full release on NEWMEDIAWIRE.
The impairments matter because they signal a strategic retreat from Brazil and mounting pressure on the company's non-core assets. Brazil's Provisional Measure No. 1,394/2026, issued on September 25, 2026, required all operators to take fixed-odds betting platforms offline and terminated existing federal authorizations without reimbursing fees already paid. Meridian suspended its Brazilian operations and recorded a $5.5 million non-cash charge. A further $5.9 million goodwill impairment followed continued operating losses at RKings and Classics for a Cause, leaving goodwill on the balance sheet at just $3.0 million as of September 30, 2026.
Despite the headline loss, the company's core Meridianbet Group continued to grow. For the first nine months of 2026, Meridianbet Group revenue rose 16% to $103.8 million, led by online casino revenue up 21% to $46.9 million. In the third quarter alone, online casino revenue increased 17% to $17.1 million, and new registrations climbed 25% to 458,680. The company's game studio, Expanse Studios, grew revenue from third-party operators by 114%, and MexPlay in Mexico posted a 55% revenue increase.
Cash generation and deleveraging were other bright spots. Operating cash flow for the nine months was $17.7 million, up 3% year-over-year, and free cash flow rose to $10.9 million from $2.5 million in the prior-year period. Total debt fell 47% to $24.1 million, and net debt dropped 65% to $8.1 million, marking a seventh consecutive quarter of deleveraging without raising additional equity capital. In September 2026, the company extended $15.6 million of acquisition consideration owed to former Meridianbet Group owners to November 2031 with no interest.
Chief Executive Officer Zoran Milosevic called the quarter challenging, citing customer-favorable sports results, regulatory developments in Brazil, and higher operating costs. He said the company remains focused on improving margins through targeted marketing and promotional spending, retail footprint optimization, and expected growth in higher-margin online casino, with a goal of returning to the profitability demonstrated in the first half of 2026. The company updated its full-year 2026 revenue outlook to between $195 million and $198 million, assuming it does not resume operations in Brazil this year.
For investors, the results highlight a company navigating regulatory shocks and asset writedowns while relying on its core betting and gaming operations to fund growth and reduce leverage. The suspension in Brazil, while not material to revenue, adds uncertainty, and the pending amendments to Australia's Interactive Gambling Act, effective January 1, 2027, could further affect Classics for a Cause. Meridian's ability to sustain cash flow and margin recovery in its historically strong fourth quarter will be key to its outlook.
