Galaxy Gaming has reflected on what is hailed as a “solid quarter” in ending the past year “on a good trajectory,” despite encountering a number of headwinds from exchange, interest and inflation rates.
The developer and distributor of casino table games and enhanced systems for land-based casinos and igaming firms saw fourth quarter revenue reach $5.94m, up five percentage points from $5.67m year-on-year.
However, net income slid from 2022’s $598,000 to $55,000, while adjusted EBITDA, courtesy of a one-time payroll tax benefit of $575,000, increased 30 per cent to $3.15m (2021: $2.43m).
Todd Cravens, Galaxy’s President and CEO, explained: “At constant currency, revenues for both the quarter and the year would have been new records for Galaxy.
“We enter the current year with several new games coming to market, and we will be installing the first of our Galaxy operating system progressives beginning in Q2.
“We expect double-digit revenue increases in our online business in 2023, and expect revenue growth in the GG core business to accelerate over the course of the year as GoS systems get installed, along with new content.”
On a full-year basis, revenue and AEBITDA rose 17 per cent and 21 per cent to $23.44m (2021: $19.98m) and $10.53m (2021: $8.73m), respectively. Net loss hit $1.71m compared to income of $2.11m recorded one year earlier.
“Some adjustments need to be made to our reported numbers to make them more comparable to the respective 2021 figures,” said Harry Hagerty, Galaxy’s CFO.
“For the quarter, using last year’s exchange rates adds $512,000 to revenue. Our adjusted EBITDA in the quarter benefitted from $575,000 in ERTC credits, which should be removed for comparability. Applying both adjustments results in pro forma revenue of $6.45m (+14 per cent) and pro forma EBITDA of $3.09m (+43 per cent).
“For the year, using last year’s exchange rates adds $1.18m to revenue, and adjusted EBITDA benefitted from the same $575,000 ERTC credit. Applying both adjustments results in pro forma revenue of $24.63m and pro forma EBITDA of $11.14m.”
For the current year, Galaxy Gaming is anticipating that revenue will fall between $26m and $27m, with AEBITDA expected to climb to between $12m-$13m.
This, noted the company, assumes exchange rates that existed in the fourth quarter 2022, and is based on economic conditions as they existed at the beginning of 2023.