PlayAGS Inc (AGS) Reports Solid Growth in Q3 2023 Earnings
PlayAGS Inc (NYSE:AGS) sees a 14% year-over-year increase in total revenue, reaching $89.4 million in Q3 2023.
Adjusted EBITDA hits a new high at $40.1 million, with margins expanding by 90 basis points year-over-year.
Net leverage improves to 3.4x, aligning with the targeted year-end range ahead of schedule.
Despite robust operational performance, the company reports a modest net loss of $156 thousand.
On November 7, 2023, PlayAGS Inc (NYSE:AGS), a leading designer and developer of gaming equipment and services, announced its financial results for the third quarter ended September 30, 2023. The company reported a significant 14% increase in total revenue year-over-year, amounting to $89.4 million, with strong growth across all segments. Adjusted EBITDA reached a record $40.1 million, marking a 16.4% improvement from the previous year and expanding the Adjusted EBITDA margin by 90 basis points. Despite these achievements, PlayAGS Inc faced a modest net loss of $156 thousand, primarily due to increased debt service costs and a favorable tax item in the prior year.
Financial Highlights and Segment Performance
PlayAGS Inc's Electronic Gaming Machines (EGM) segment was a standout, with revenues climbing 14.3% to $81.9 million. The segment's Adjusted EBITDA also saw a healthy 17.4% increase. The Interactive segment's revenue surged over 20% to a record $3.1 million, while Table Products grew by 8.7%. The company's gaming operations, or recurring revenue, reached a record $61.0 million, an 8% increase from the previous year, demonstrating the resilience and appeal of PlayAGS Inc's product offerings.
AGS President and CEO David Lopez commented on the results, stating,
We delivered another solid quarter of execution in the third quarter, with our product momentum and focused team producing performance that far exceeded the trends observed across the broader domestic gaming landscape."
CFO Kimo Akiona added,
Our record-setting Q3 2023 Adjusted EBITDA and free cash flow performance enabled us to reduce our net leverage to 3.4 times at quarter end, placing us inside of our targeted year-end range of 3.25 times to 3.50 times a full quarter ahead of schedule."
Liquidity, Capital Expenditures, and Net Leverage
As of September 30, 2023, PlayAGS Inc reported total available liquidity of approximately $84 million, with a cash balance of $43.7 million and $40.0 million of availability under its undrawn revolving credit facility. The total principal amount of debt outstanding was $568.3 million, with a total net debt leverage ratio of 3.4 times, an improvement from 3.8 times at the end of the previous year. Capital expenditures for the third quarter totaled $17.2 million, with the company expecting full-year capital expenditures to be within the range of $65 million to $70 million.
PlayAGS Inc remains confident in its ability to maintain net leverage within the target range of 3.25 times to 3.50 times by the end of 2023, supported by its record financial performance and strategic focus on capital deployment discipline.
Conference Call and Company Overview
The company will host a conference call to review the financial results, providing investors with further insights into its performance and strategies. PlayAGS Inc continues to focus on creating a diverse mix of entertaining gaming experiences, leveraging its strong product portfolio and customer-centric culture to drive growth and value for its casino partners.
For detailed financial tables and a complete analysis of PlayAGS Inc's performance, including reconciliations of non-GAAP financial measures, readers are encouraged to visit the full earnings release and filings.
For more information and to access the live webcast of the conference call, please visit investors.playags.com.
Explore the complete 8-K earnings release (here) from PlayAGS Inc for further details.
This article first appeared on GuruFocus.
