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AGS reports first quarter revenue growth


Gaming machine and technology supplier AGS has reported a 12.6% year-on-year rise in revenue for the first quarter of 2019, driven by growth in its core electronic gaming machine (EGM) business. 

Revenue rose to $73.0m (£56.2m/€65.2m), driven by a 13.7% increase in EGM revenue to $69.7m. This was aided by unit sales rising 22% from Q1 2018, with the number of machines generating recurring revenue  growing to 27,308. The number of machines rose by 2,500 as a result of AGS’s $49m acquisition of Integrity Gaming, completed in February 2019. 

From a lower base, table game revenue increased 29.1% to $2.2m – the segment’s strongest quarter to date according to AGS chief executive David Lopez. This growth helped offset a decline in interactive revenue, which fell 36.2% to $1.2m.

Gaming operations accounted for $52.9m of revenue for the period, up 6.5%, with equipment sales providing $20.1m, 32.6%.

Expenses for the period were up 3.3% to $64.7m, with a decrease in selling, general and administrative expenses wiped out by rising gaming operations and equipment sales costs. While research and development costs, and expenses related to write-downs both dropped, depreciation and amortisation charges rose 11.4% to $21.6m.

This left operating income of $8.3m, an increase of 273.0% from the prior year. However finance-related costs, including interest expenses of $8.9m, coupled with a further $5.3m in costs, saw AGS swing to a pre-tax loss of $5.7m.

While the supplier did recoup $5.8m through an income tax benefit, losses of $82,000 attributable to its parent company PlayAGS saw AGS post a loss of $82,000 for the quarter. This was offset by a foreign currency translation adjustment of $642,000, for a total profit of $560,000.

“With numerous levers to build momentum — including strategic investments in R&D to continue building a strong, diversified, and expanded product portfolio, as well as many new and underpenetrated domestic and international markets — AGS is well-positioned for continued long-term, meaningful growth,” chief executive Lopez said.