PlayAGS returns to profit in Q2 after record land-based performance

| By Robert Fletcher
Gaming machine and content provider PlayAGS said record land-based revenue figures during the second quarter of its 2022 financial year helped it return to a net profit.

PlayAGS reported record revenue for domestic electronic gaming machines operations in the US, while table games revenue also reached an all-time quarterly high during the three months to June 30.

Though PlayAGS noted a slight decline in interactive revenue, speaking in an investor call PlayAGS president and chief executive David Lopez said the provider’s current research and development strategy will help drive growth in the long term across all segments. 

“Our recent success clearly demonstrates the power of having our R&D team work with the front end of the business to allow our products to reach a broader subset of key customers,” Lopez said.

“With interactive, we continue to make progress on our strategic plans to further leverage our high-performing game content and strong customer relationships to significantly grow our share of the North America RMG [real-money gaming] market. 

“Q2 provided a glimpse of where we believe our RMG business is heading as North America RMG revenue increased by more than 15%. As with the land-based business, we continue to be encouraged by the strong performance of AGS content in the online channel.”

Total revenue for the second quarter amounted to $76.6m (£63.4m/€75.1m), representing a year-on-year rise of 14.6%.

Electronic gaming machines revenue climbed by 15.2% to $70.5m, helped by record $46.2m domestic revenue, while revenue from table game products jumped 24.2% to a record $3.5m.

Interactive revenue slipped 7.5% year-on-year, but PlayAGS noted this total was over 5% higher than in Q1 of 2022, which it said reflected growing momentum within its North American business and stable social gaming revenue performance.

Turning to costs, total operating expenses were up by 12.5% at $66.8m, while other costs amounted to $8.2m, leaving a pre-tax profit of $1.7m, a significant improvement on the $3.6m loss posted at the same point last year.

After tax, the supplier made a net profit of $981,000, compared to a $3.0m loss in Q2 of 2021.

In addition, PlayAGS noted that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for Q2 increased by 6.3% year-on-year to $34.1m.

“Our second quarter results reflect the growing returns we are realising as a result of the significant investments made into our R&D, sales and product management teams over the past 24 months,” Lopez said.

“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.

“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.”

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