PlayAGS achieved growth across all three business segments in the second quarter of 2023, resulting in a “record-setting” financial performance.
Reporting its Q2 financials, AGS declared a 17 per cent increase in revenue year-over-year to $89.8m (Q2 2022: $76.6m) as electronic gaming machines, table products and interactive all grew in comparison to the previous year.
The gaming company’s Q2 revenue figure was also an improvement over the previous record, set earlier this year in Q1 of $83.2m, as well as the company’s tenth consecutive quarter of sequential growth.
Per segment, both EGM and table products achieved new quarterly records in terms of revenue.
EGM revenue stood at $82.7m by the end of the quarter, up 17.3 per cent YoY (2022: $70.5m), table products improved by 25.1 per cent to $4.4m (2022: $3.5m) and interactive rose by 5.8 per cent to $2.8m (2022: $2.6m).
Of note, global EGM sales improved by 35 per cent YoY to top 1,250 units, as well as seven per cent ahead of Q2 2019. Also, domestic EGM recurring revenue achieved an all-time quarterly record for the third consecutive time, growing by seven per cent YoY.
Commenting on the results, President and CEO, David Lopez, said: “Our record-setting second quarter financial performance clearly demonstrates the strength of our products, team members, and strategy, which is creating significant momentum within all three segments of our business.
“The unique combination of a growing portfolio of high-performing products and an exceptionally talented team has me excited about what lies ahead for our company in 2023 and beyond.”
While income from operations rose by 53.6 per cent to $15.1m (2022: $9.8m), net income declined for the company by 44.8 per cent to $851,000 (2022: $1.5m).
AGS attributed the drop in net income to “the recent move higher in market-level interest rates increased the company’s interest expense by approximately $6m relative to the level incurred in the prior year period”.
The company also added that income from operations improvements were offset by “a significant portion of the prevailing interest rate environment’s impact on the company’s reported net income”.
Meanwhile adjusted EBITDA improved by 16 per cent to $39.6m (2022: $34.1m).
EGM and table products both saw increases in adjusted EBITDA, rising by 16.8 per cent and 12 per cent to $36.9m (2022: $31.6m) and $2.3m (2022: $2m) respectively. However, interactive dropped by 13.2 per cent YoY to $473,000 (2022: $545,000).
Cash from operations came in at $25m, while free cash flow reached $12.6m, a 38 per cent improvement YoY.
CFO Kimo Akiona added: “During the second quarter we delivered on our commitment to further de-lever our balance sheet through a combination of adjusted EBITDA growth and free cash flow generation.
“Supported by our record-setting financial performance through the first six months of the year, the sustained operating momentum we continue to observe across all three business segments, and our confidence in our ability to leverage our capital deployment discipline and improving working capital efficiency to consistently generate free cash flow, we now expect to exit 2023 with net leverage in the range of 3.25 times to 3.50 times.”
