Galaxy Gaming: 2023 is shaping up to be record year despite headwinds

Galaxy Gaming is primed to hit a “record year” after President and CEO Todd Cravens elaborated on the potential performance “despite some challenges” being encountered through the third quarter.

This comes ahead of his own exit from the company, which was signalled earlier in the month and will see Cravens bring an end to a near seven year stay at the group, including almost six and a half in the aforementioned role, to seek a fresh endeavour.

Revenue through the July to September period increased three per cent year-on-year to $6.1m (2023: $5.9m), although this does represent an 18.88 per cent sequential drop from the $7.52m reported through the second quarter.

This decline was primarily aligned to lower sales of perpetual licences through Q3 contrasted to the previously quarters of the year.

“We expect that future sales of these perpetual licences will make our quarterly results lumpier than in the past,” Cravens noted.

“However, we will continue to pursue these sales as they result in substantial increases to our installed base and offer additional recurring revenue opportunities.”

Adjusted EBITDA closed the period at $1.51m, down 36 per cent and 52.95 per cent YoY and QoQ from $2.35m and $3.21m, respectively. Net loss grew to $1.45m (2022: -$699,000).

The group’s performance through the year-to-date saw revenue and AEBITDA up 20 per cent and six per cent to $21m (2022: $17.5m) and $7.8m (2022: $7.3m), respectively. Net loss of $988,000 through the YTD is contrasted to a loss of $1.82m YoY.

“Galaxy became the distributor of EZ Baccarat on September 9 and added approximately 500 tables in approximately 120 casinos to our installed base,” Cravens continued.

“This is a significant step in our strategic plan of penetrating other table games families in addition to blackjack. 

“Based on the existing installed base, we believe that the distribution of EZ Baccarat could add more than $3m to our EBITDA on an annual basis, with upside coming from new instals both in the land-based and online markets.

“Finally, we had our best G2E show ever, setting us up for increased revenue in fiscal 2024.”

After heightened expectations through the full-year were stressed following Q2, fourth quarter revenue is now expected to reach $7m-$7.5m, with AEBITDA guidance set at $2.8m-$3.2m. 

“This forecast assumes around $200,000 in perpetual licence sales and around $800,000 in net revenues from EZ Baccarat distribution,” noted Harry Hagerty, Galaxy Gaming CFO.

“This forecast assumes no impact to our business from the wars in Ukraine and the Middle East, and no economic recession. Finally, the forecast is based on currency exchange rates that we experienced in the third quarter.”