PlayAGS, saw its revenue increase by 17 per cent year-over-year to a record $89.8m compared to $76.6m in Q2 2022 with all three operating segments delivering year-over-year revenue growth in Q2 2023, with the EGM and Table Products segments establishing new quarterly revenue records of $82.7m and $4.4 m, respectively.
Total revenue improved eight per cent over the then record $83.2m achieved in Q1 2023, representing the company’s tenth consecutive quarter of sequential growth.today reported operating results for the second quarter ended June 30, 2023.
Commenting upon the company’s second quarter results, AGS President and Chief Executive Officer 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.”
Kimo Akiona, AGS Chief Financial Officer 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.”
Domestic EGM gaming operations, or recurring revenue, increased seven per cent year-over-year to a record $49.3m, exceeding the previous record of $47.7m, established in Q1 2023, by approximately three per cent. A nearly 40 per cent year-over-year increase in our higher-yielding premium EGM installed base, further deployment of our first-ever high-denomination game content and chart-topping Spectra UR43 gaming cabinet, continuous installed base optimization efforts, and a stable gaming macroeconomic backdrop drove our improved quarterly recurring revenue performance versus the prior year. Domestic EGM recurring revenue established a new record for the third consecutive quarter and topped $45m for the fifth quarter in a row. Recurring revenue accounted for over 60% of the total domestic EGM revenue generated in Q2 2023.
The domestic EGM installed base expanded to 16,422 units at the end of Q2 2023, representing an increase of 395 units versus the prior year. AGS also grew its EGM footprint with the deployment of its high-performing Spectra UR43 cabinet. The domestic EGM installed base increased by over 60 units versus the prior sequential quarter, marking the fifth consecutive quarter in which AGS achieved quarterly sequential installed base growth.
Gaming operations, or recurring revenue, reached a record $61m, up eight versus the prior year and four per cent sequentially. Domestic EGM recurring revenue grew to a record $49.3m, representing a year-over-year increase of seven per cent and three per cent ahead of the previous record of $47.7m set in Q1 2023. International EGM recurring revenue advanced 18 per cent year-over-year and increased sequentially for the twelfth consecutive quarter. Table Products and Interactive recurring revenue increased 11 per cent and six per cent year-over-year, respectively. Recurring revenue accounted for nearly 70 per cent of the company’s consolidated Q2 2023 revenue mix.
Equipment sales revenue advanced 45 per cent year-over-year to a record $28.9m, topping the previous record of $26.9m, established in Q3 2019, by more than seven per cent. EGM sales revenue increased by over 40 per cent versus the prior year to $28.3m, while Table Products sales revenue surpassed $500,000 for the first time. Equipment sales revenue increased approximately 18 per cent relative to the $24.5m delivered in Q1 2023, supported by quarterly sequential Table Products and EGM sales revenue growth of 36 per cent and 17 per cent, respectively.