Widespread growth leads to revenue increase at AGS in Q1

Revenue for the three months to 31 March 2022 amounted to $72.9m, up from $55.4m in the corresponding period last year.

Gaming operations revenue for the quarter jumped 19.8% year-on-year to $53.2m, while revenue from equipment sales also increased by 80.7% to $19.6m.

Breaking down this performance by business segment, AGS said electronic gaming machine (EGM) revenue was up 32.4% at $50.5m, driven by higher-yielding premium games, more consistent core game content execution and a stable gaming macroeconomic backdrop.

Table products revenue reached a new quarterly record of $3.5m, an increase of 26.3% on last year, as AGS reported sustained customer demand for its progressive products in this area.

Interactive revenue also climbed 18.5% year-on-year to $2.5m, with growth in real-money activities offsetting a decline in social gaming revenue within this segment.

However, the overall increase in revenue in Q1 was accompanied by a rise in spending, with total operating expenses for the period jumping 29.5% to $67.2m. Costs were higher across all areas, with the exception of write-downs and other charges.

This left an operating profit of $5.7m, up 67.7% year-on-year, but AGS also noted a number of other costs for the quarter including $9.5m in interest expense and $8.5m in the loss on extinguishment and modification of debt.

As a result, pre-tax loss amounted to $12.1m, compared to $7.4m at the same point in 2021. AGS paid $467,000 in income tax and, despite a $1.0m positive foreign currency translation adjustment, it ended the quarter with a net loss of $11.6m, wider than $8.6m last year.

The provider, however, did note that adjusted earnings before interest, tax, depreciation and amortisation (EBTIDA) for the quarter was 24.5% higher at $32.8m as a result of the increase in revenue. 

“I am encouraged by the degree to which the operating momentum we established throughout 2021 continued into the first quarter,” AGS president and chief executive David Lopez said.

“We have heavily invested in strengthening the foundation of our company over the past couple of years and are beginning to realise accelerating returns on these investments. 

“To that end, I believe our solid first quarter performance simply foreshadows what our laser-focused organisation can accomplish in the quarters and years ahead.”