Improved execution and acceleration across all three core reporting segments positions stands AGS in good stead to drive additional growth across coming quarters, reports the group in its latest financial report.
Following a first quarter where resiliency and durability were lauded as “inherent to our company’s recurring revenue-centric business model,” the firm reports a series of year-on-year gains through Q2, although there’s still room for improvement when contrasted to 2019.
Consolidated revenue totaled $66.8m, compared to $16.8m and $74.5m in 2020 and 2019, respectively, with growth across table products and interactive offset by 13.8 per cent decline in its electronic gaming machine segment.
AGS notes that “although North American slot replacement demand has meaningfully improved over the past several months, operators’ aggregated capital spend on new equipment purchases remains below pre-COVID-19 levels, pacing our reported EGM revenue decline versus Q2 2019”.
Interactive revenue came in at $2.8m, rising 30.5 per cent and 153.3 per cent from 2020’s $2.1m and $1.1m, respectively, with table products finishing up at $2.8m (2020: $674,000 & 2019: $2.4m).
EGM revenue surged 338.4 per cent from $13.9m during 2020’s second quarter to $61.1m during the past period, however, this figure represents a 13.8 per cent drop from $70.9m, from two years earlier.
David Lopez, AGS President and CEO, explained: “We were able to leverage our over 15,000 unit domestic EGM installed base, our growing premium game footprint, and the revenue strength witnessed throughout the domestic gaming market to establish new company records in both domestic EGM revenue per day and domestic EGM gaming operations revenue in the second quarter.
“Looking ahead, our improved execution and accelerating product momentum across all three of our business segments position us to deliver additional growth and share taking in the coming quarters.”
Second quarter net loss of $3.9m improved as compared to losses of $42.6m and $7.6m recorded through Q2 2020 and 2019, respectively.
This, says AGS, is due to improved operating performance and lower depreciation and amortisation expense, partially offset by slightly higher interest expense related to an incremental $95m term loan, which was closed upon in May 2020.
Additionally, net loss in the prior year period was negatively impacted by $3.1m in one-time expenses related to the aforementioned debt financing transaction.
The improvement as compared to the level reported in 2019 was driven by fewer one-time charges and lower D&A expense, partially offset by slightly higher interest expense.
Total adjusted EBITDA was $32.1m compared to a $1.2m loss last year, however, this represents a slight decline from the $35.7 from 2019.
Interactive and table products adjusted EBITDA “increased sharply” when contrasted to the levels achieved in Q2 2019, supported by successful execution of ongoing revenue growth initiatives in each segment.
EGM adjusted EBITDA decreased 17.1 per cent versus the same period in 2019, as the upside from 2021 gaming operations was more than offset by the impact of the ongoing recovery in the North American slot replacement market from post-COVID-19 lows on unit sales.
Kimo Akiona, AGS’ CFO, added: “The continuous improvement being achieved as a result of our enhanced game content development execution, upgraded product management capabilities, and refined capital deployment processes, sets us on a path to deliver more consistent financial performance, improving our capital returns and leverage profile, and, most importantly, strengthening shareholder value over time.”