AGS revenue up for Q4; but net income down 97.4%

March 6, 2024
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Despite the harsh net income drop, both total revenue and adjusted EBITDA were up by double digits year-over-year.

PlayAGS has released its financial figures for Q4. For the quarter, the supplier reported total revenue of $94.2m, up 15.2% year-on-year. Annual revenue for AGS was $356.5m, also up 15.2% year-over-year. 

Of this total revenue, $59.6m came from gaming operations, while the remaining $34.6m came from equipment sales.  

Total adjusted EBITDA came to $42.8m, up 14.7% year-over-year. This was also the amount adjusted EBITDA grew for the 2023 financial year, up to $159m from last year’s $138.6m.  

Despite double-digit growth in total revenue and EBITDA in the quarter, Q4 saw AGS’ net income drop sharply, from $2.5m to $0.07m year-over-year. This is a drop of 97.4%. For the full year, net income was reported at $0.4m, up from a net loss of $8m reported for full year 2022.  

Electronic gaming machines (EGMs) 

EGMs made up the majority of AGS’ Q4 earnings, generating $86m in total revenue – up 14.1%. In total, $52.3m of this was made through gaming operations, though this was only up 2.1% year-over-year, while equipment sales revenue grew notably, up 39.5% for quarterly revenue of $33.7m. 

Looking at the number of gaming operations, AGS installed 11,193 Class II machines in the quarter – a minimal decline of 0.5%. Class III machines, meanwhile, were up 3.4%, with 5,250 installed. Domestically, AGS installed 16,443 EGMs, while 6,126 were installed internationally.  

Examples of domestic development in the quarter include the launch of AGS’ EGMs to casinos in Colorado and Missouri. These include Century Casino & Hotel Central City and Golden Nugget Cripple Creek in Colorado and Horseshoe St. Louis and Ameristar Casino Hotel Kansas City in Missouri. 

Table products 

Total table product revenue for Q4 came to $4.8m for AGS, up 24.1% year-over-year. While gaming operations contributed the greatest total to this, $3.9m, it was equipment sales that grew the most significantly, up 348.7% to $0.9m. 

Developments in the quarter included AGS’s table games partnership with Three Rivers Casino in Oregon in December.

Total adjusted EBITDA came to $2.8m, reflecting growth of 19.9% year-over year.  

Interactive 

AGS’ interactive segment saw 34.4% growth from its gaming operations, totaling $3.4m in the quarter. Adjusted EBITDA was up even more significantly, making $1.3m from last year's $0.5m – growth of 159.4%.  

Comments 

On the report, AGS President and CEO David Lopez said, "The strength in our four quarter results was broad-based, with all three operating segments setting new quarterly records for revenue and adjusted EBITDA." 

AGS CFO Kimo Akiona added, "We exited 2023 with a total net debt leverage ratio of 3.2 times, down from 3.8 times at the start of the year. Supported by our consistent operating momentum and execution, heightened focus on efficient and effective working capital management, continued capex deployment discipline and anticipated cash interest savings from our recent debt repricing and repayment; a path to below 3.0 times remains well within our sight." 

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