AGS has heaped praise on the continued operating momentum demonstrated through the first quarter of the year, with David Lopez, President and CEO, asserting that the firm is witnessing accelerated returns after having “heavily invested in strengthening the foundation”.
Q1 2022 saw the Las Vegas headquartered group achieve its fifth consecutive quarter of sequential revenue growth, after recording a 32.4 per cent year-on-year uptick to $72.85m (2021: $55.35m). This also represents an approximate four per cent quarterly uptick from $70.2m.
This increase, said AGS, is due to a 15 per cent increase in domestic EGM unit sales, sustained strength in this segment’s domestic recurring revenue business, record table products performance, and further recovery across international EGM gaming operations.
However, first quarter net loss swelled to $12.6m from 2021’s $7.8m, which is aligned to costs associated with the group’s debt refinancing transaction, which was closed in February 2022, and that was partially offset by an improved operating performance. Excluding refinancing-related expenditures, AGS says that net loss would have improved YoY.
Adjusted EBITDA reported an increase of 24.5 per cent to $32.76m (2021: $26.32m), with upticks recorded across all core reporting segments.
Kimo Akiona, AGS’ Chief Financial Officer, explained: “Supported by the operational momentum we continue to see within the business, the approximately $10m of annualised cash interest expense savings we have started to realise as a result of the refinancing transaction, and our organisational commitment to maximising free cash flow, we remain confident in our ability to deliver upon our year end 2022 net leverage target of less than 4.0x.”
AGS’ EGM segment saw revenue close Q1 32.4 percentage points ahead at $66.9m (2021: $50.18m), with adjusted EBITDA up 23.7 per cent to $30.19m (2021: $24.4m).
This was primarily driven by a greater mix of higher-yielding premium games, more consistent core game content execution, and a stable gaming macroeconomic backdrop.
A sustained customer demand for table game progressive products, growing instals, and the Q1 acquisition of the Lucky Lucky side bet are stipulated as factors in driving the group’s table products to a third consecutive record breaking revenue quarter after closing at $3.48m, 26.3 per cent up YoY from $2.75m. Adjusted EBITDA finished 29.6 per cent ahead at $1.82m (2021: $1.41m).
Total revenue in the group’s interactive segment increased 18.5 per cent to $2.47m (2021: $2m), with a 42.2 per cent real-money gaming gaming uptick to $1.95m (2021: $1.37m) offsetting social gaming’s 27.4 per cent drop to close at $515m (2021: $709m).
AGS aligns its RMG growth with the successful integration of its remote gaming server with additional igaming operators; the expansion of regulated online casino to additional North American jurisdictions, including several Canadian provinces; and continued strong performance of game content.
“I am encouraged by the degree to which the operating momentum we established throughout 2021 continued into the first quarter,” Lopez added.
“We have heavily invested in strengthening the foundation of our company over the past couple of years and are beginning to realise accelerating returns on these investments.
“To that end, I believe our solid first quarter performance simply foreshadows what our laser-focused organisation can accomplish in the quarters and years ahead.”