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PlayAGS sees revenues rise but net losses widen in Q2


Gaming technology provider PlayAGS has reported a 2.3% year-on-year increase in revenue for the three months to June 30, 2018, despite also seeing its net losses widen over the period.

Total revenue in the second quarter amounted to $74.5m, up from $72.8m in the corresponding three-month period last year.

PlayAGS said this rise was primarily due to record gaming operations revenue, with the provider seeing an increase in revenue from both its Electronic Gaming Machine (EGM) and Table Products segments.

Gaming operations revenue grew 2% year-on-year to $53.6m, driven by EGMs purchased from Integrity Gaming. Table products revenue also climbed 35% to $2.4m due to increased progressive table game and side bet placements.

However, it was not such positive news for the PlayAGS Interactive business, which saw revenue slip 35.1% to $1.1m. Social gaming revenue fell 46.4% to $890,000 as a result of PlayAGS “strategically optimising its user acquisition costs”, although real-money gaming revenue rocketed 333.3% to $221,000.

Total operating costs were also up at PlayAGS in Q2, with the provider spending $72.5m during the period, compared to $61.8m in 2018.

Gaming operation costs were up from $9.7m to $10.9m, while write-downs and other charges increased from $1.0m to $5.0m. Depreciation and amortisation costs also jumped from $19.5m to $23.7m.

Higher spending meant net loss for the period increased 42.3% year-on-year to $7.6m. PlayAGS noted that this included an impairment of goodwill of $3.5m, as well as an impairment of intangible assets of $1.3m related to the real-money gaming business of its Interactive segment.

Total adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) also slipped 2% year-on-year to $35.7m, primarily due to increased EGM-related headcount costs, higher EGM service costs associated with a larger installed base, and an increased loss in interactive adjusted EBITDA.

Reflecting on the quarter, David Lopez, president and chief executive of PlayAGS, described the results as mixed, citing higher operating costs as the reason for a higher net loss, but remained optimistic for the latter part of the year.

“Results in the second quarter were mixed, with 2% year-over-year growth in both total and recurring revenue offset by a slight decrease in adjusted EBITDA,” he said.

“The decrease was related to increased operating expenses as we continue to invest in strategic areas of our business, particularly in R&D, to capitalise on the vast white space in front of us.

“With our many upcoming product launches, including the Orion UprightSM and three new slot innovations, we remain confident in the many opportunities for sustainable growth in the back half of 2019 and beyond.”