US – Revenue soars by 25 per cent for AGS as Orion floods the marketBy Phil - 6 March 2019
AGS enjoyed a buoyant 2018 with revenues up by 25 per cent to $72.1m, driven by continued growth in its EGM segment in the Class III marketplace, primarily in early-entry markets such as Ontario, Mississippi and Nevada as well as continued penetration into ramping markets such as California and Florida.
EGM equipment sales increased 86 per cent to $23.2m, due to the sale of 1,159 units, of which nearly 60 per cent were sold into early-entry markets.
Gaming operations revenue, or recurring revenue, grew to $48.9m, or eight per cent year-over-year, driven by EGMs purchased from Rocket Gaming, increased domestic revenue per day of $26.41, growth and performance of our international installed base, and an increase in table products revenue. It made a net loss of $10.3m down from a loss of $8.5m last year, due in part to a non-cash, pre-tax impairment of goodwill of $4.8m related to its social gaming business.
Chief Executive Officer David Lopez said: “We ended our first year as a public company with a solid fourth quarter and 35 per cent growth in annual revenue. Our continued top line growth, increased operating cash, and free cash flow generation reflects the industry-leading performance of our products and AGS’ unique position given how underrepresented we are in the market. These two factors contributed to our phenomenal growth in electronic gaming machines (EGMs), ending the year with more than 4,300 sold units, a 71 per cent increase from fiscal 2017. We kicked off 2019 with the close of our acquisition of Integrity Gaming Corp., which bolsters our recurring revenue footprint and provides long-term optimization opportunities. With new product and content launches, further penetration of both new and early-entry markets, and international expansion, AGS is positioned for another high-growth year in 2019.”
In the fourth quarter EGM units sold increased 66 per cent to 1,159 compared to 697 in the prior year led by sales of the Orion Portrait and Orion Slant cabinets in early-entry markets as well as to corporate customers, the latter which accounted for approximately 43 per cent of sold units in the period.
Its new Orion Slant footprint increased to over 1,500 units, up 161 per cent sequentially, and accounted for nearly 30 per cent of sales in the quarter. Its Orion Portrait footprint increased to over 5,000 units, up 19 per cent sequentially and 202% year-over-year whilst its ICON cabinet footprint increased to 7,325 units, up eight per cent sequentially and 58 per cent year-over-year.
Its international installed base increased 624 units year-over-year and 235 units sequentially to over 8,350 units, with more than 500 ICON units in Mexico as of December 31, 2018. Table Products increased by 762 units, or 32 per cent to 3,162 units, driven by organic growth, most notably the Super 4 Progressive Blackjack and Buster Blackjack side bet.
In February 2019, the company spent $49m on buying Integrity Gaming Corp., a regional slot route operator with approximately 2,600 recurring revenue gaming machines in operation across over 33 casinos in Oklahoma and Texas.
It also completed the necessary regulatory requirements in the Philippines with the first units of its Alora video bingo cabinet now installed.
“The Philippines video bingo market comprises approximately 70,000 machines currently, and we are confident that our content and innovative cabinet will be a competitive market addition,” the company said.