Gaming technology supplier AGS posted a narrower net loss of $8.6m in the first quarter of its financial year after reducing operating costs and other spending during the period.
Total revenue for the three months to March 31 amounted to $55.4m, which was 2.0% up on $54.3m in the corresponding period last year.
AGS put this primarily down to growth within recurring revenue channels of its electronic gaming machine (EGM), table products and interactive businesses, which offset a slowdown in the North American slot replacement market.
EGM revenue edged up 0.3% to $50.5m, despite a 4.8% decline in revenue from equipment sales. This drop was offset by a 1.8% rise in gaming operations revenue to $39.6m.
Revenue from table products climbed 11.0% year-on-year to $2.8m, driven by a 17.3% to $2.7m. Just $29,000 was generated from equipment sales, with revenue here dropping 81.6%.
In terms of the AGS interactive segment, revenue here jumped 41.3% to $2.1m, with real-money gaming revenue rocketing 110.4% to $1.4m. In contrast, social gaming revenue was down 13.7% to $709,000.
“I was very pleased with our team’s execution in the 2021 first quarter and am equally as encouraged by the macro-level trends and overall sentiment we are seeing across the gaming landscape today,” AGS president and chief executive David Lopez said.
“Following one of the best corporate strategic planning meetings I have ever participated in, we are strengthening our organizational alignment around key business objectives, which should allow us to improve our business trajectory and overall operating efficiency.”
Total operating costs for the quarter stood at $51.9m, down 12.8% year-on-year as AGS was able to reduce spending in several areas. Gaming operations spend was down 13.0% to $8.7m, while equipment sale spend fell 32.7% to $3.5m.
Research and development expenses remained level at $8.1m, while selling, general and administrative costs increased 8.6% to $12.6m, but depreciation and amortization spend was 24.6% lower at $18.4m.
This left an operating profit of $3.4m, compared to a $5.2m loss at the end of Q1 2020, while earnings before interest, tax, depreciation and amortization (EBTIDA) increased by 7.4% to $26.3m.
When including $11.0m in interest expense, this led to a loss before tax of $7.4m, though this was significantly lower than the $17.8m loss posted last year.
AGS paid $345,000 in tax, resulting in a net loss of $7.8m, compared to $8.2m in 2020. After accounting for a negative impact of $862,000 from foreign currency translation adjustment, AGS ended the quarter with a total loss of $8.6m, an improvement on $22.6m in 2020.
“Our first quarter results once again serve as a testament to the resiliency and durability inherent to our company’s recurring revenue-centric business model,” AGS chief financial officer Kimo Akiona said.
“I am confident our improving execution and strong liquidity position will allow us to deliver more consistent financial performance and, in turn, further enhance shareholder value.”