US – PlayAGS sees revenues up 15 per cent in Q2 marking six quarters of growthBy Phil - 9 August 2022
PlayAGS, a designer and developer of equipment and services solutions for the global gaming industry, has reported its operating results for the second quarter ended June 30, 2022, with revenue reaching $76.6m, representing an increase of 15 per cent.
Revenue growth within the EGM segment outpaced the broader company average, supported by continued successful execution of our premium game growth initiative, realization of early-stage returns on recent R&D investments, continued recovery in North American replacement unit demand, and further improvement in the Mexico macroeconomic environment. Table Product revenues advanced approximately 24 per cent year-over-year to a record $3.5m, reflecting outsized growth within our progressive installed base, initial installs of our PAX S single-deck card shuffler, a doubling of our AGS Arsenal site license customer account penetration, and the Q1 2022 Lucky Lucky side bet acquisition. Interactive revenues declined modestly year-over-year as we continue to strategically refocus our resources to better capitalize upon growth opportunities in the North American real-money gaming market. Total revenue improved approximately five per cent over the $72.9m delivered in Q1 2022, with revenues increasing sequentially in all three business segments. Q2 2022 marked the sixth consecutive quarter in which we were able to achieve quarterly sequential revenue growth.
In addressing the company’s second quarter financial performance, AGS President and Chief Executive Officer David Lopez said, “Our second quarter results reflect the growing returns we are realizing as a result of the significant investments made into our R&D, sales and product management teams over the past 24 months. These investments have accelerated the operating momentum we are seeing within the business, as reflected by the material year-over-year growth in our reported Q2 2022 net revenues, net income and Adjusted EBITDA.”
Mr. Lopez continued, “Despite swirling uncertainty over the health of the consumer and the direction of the global economy, we have been encouraged by the incredible consistency demonstrated within our business through July. Ultimately, our recurring-revenue focused business model and strong liquidity position fortify the underlying resiliency within our business.” Gaming operations, or recurring revenue, increased to $56.6m versus $55m and $53.2m in Q2 2021 and Q1 2022, respectively. Despite facing a challenging prior-year comparison that benefitted from considerable fiscal stimulus and the broad-based easing of COVID-related casino operating restrictions throughout the United States, domestic EGM gaming operations revenue increased approximately one per cent year-over-year to a record $46.2m. Table Products recurring revenue of $3.5m also reached a new record, supported by organic growth throughout the installed base and Q1 2022 acquisition activity. In aggregate, recurring revenue accounted for approximately 74 per cent of the consolidated Q2 2022 revenue.
The company sold a total of 858 domestic EGM units in Q2 2022, an increase of 40 per cent compared to the 613 units sold in Q2 2021. The increased depth and breadth of our core game content catalog, the strategic broadening of our customer account penetration, continued success in capturing an outsized share of Historical Horse Racing (HHR) sales opportunities, and a steady recovery in core North American replacement unit demand combined to drive our improved domestic EGM unit sales performance versus the prior year. It sold units into 26 US states and two Canadian provinces throughout Q2 2022, as we continue to successfully implement strategic initiatives intended to broaden our customer account penetration.