US – PlayAGS sees 16 per cent jump in Q4 revenuesBy Phil - 10 March 2023
PlayAGS, a designer and developer of equipment and services solutions for the global gaming industry, generated a fourth quarter revenue increase of approximately 16 per cent year-over-year to a record $81.7m.
Table Products revenue advanced 22 per cent versus the prior year, reflecting outsized growth within the AGS progressive installed base, growing demand for its PAX S single-deck card shuffler, further adoption of its AGS Arsenal site license offering, and the Q1 2022 Lucky Lucky side bet acquisition. EGM revenue increased by nearly 17 per cent year-over-year, paced by EGM sales revenue growth of over 40 per cent and the achievement of quarterly record domestic EGM gaming operations revenue. Global EGM sales topped 1,000 units for the second consecutive quarter and reached the highest level achieved since Q4 2019. Total revenue improved approximately four per cent over the $78.3m delivered in Q3 2022, representing our eighth consecutive quarter of sequential total revenue growth.
AGS President and Chief Executive Officer David Lopez said: “Our record-setting fourth quarter results reflect the accelerating returns we continue to realize on investments made into our R&D, sales and product management teams over the past several years. Looking ahead to 2023, I see a set of company-specific growth catalysts forming within all three segments of our business that should allow our recent operating momentum to continue.”
Kimo Akiona, AGS Chief Financial Officer added: “We exited 2022 with net leverage inside of 4.0x, consistent with the expectations articulated at the start of the year. As we move forward into 2023, our organization remains squarely focused on maximizing free cash flow and further reducing the amount of leverage on our balance sheet.”
Gaming operations, or recurring revenue, increased eight per cent year-over-year, topping $57m for the first time in the company’s history. Domestic EGM recurring revenue grew to a record $46.8m, up eight per cent year-over-year and approximately 13 per cent ahead of Q4 2019 levels. Our growing premium game mix, improved core content execution, further implementation of fleet optimization initiatives, and a stable domestic gaming macroeconomic backdrop supported our record Q4 2022 Domestic EGM recurring revenue performance. International EGM recurring revenue advanced 12 per cent year-over-year, paced by the consistent recovery trends we continue to observe throughout the Mexico gaming market and further implementation of our continuous installed base optimization initiatives. International EGM recurring revenue has increased sequentially for ten consecutive quarters. Table Products recurring revenue increased by approximately 19% year-over-year to $3.7m, supported by growth across all product verticals. In aggregate, recurring revenue accounted for over 70 per cent of our consolidated
Q4 2022 revenue mix.
We generated record net income of $2.5m in Q4 2022 compared to a net loss of $9.1 million in the prior year period. The year-over-year increase in our reported net income was predominantly driven by our strong year-over-year revenue growth and continued organizational focus on operating expense efficiency, which were partially offset by slightly higher interest expense resulting from the recent move higher in market-level interest rates. Q4 2022 marked the third consecutive quarter in which we were able to generate positive net income.