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Sep 30, 2023
PlayAGS Q3 2023 Earnings Report
Key Takeaways
PlayAGS delivered a solid third quarter, with total revenue increasing 14% year-over-year to $89.4 million and Adjusted EBITDA eclipsing $40 million for the first time. The company also achieved record free cash flow and reduced its net leverage to 3.4x, ahead of schedule.
Total Revenue increased 14% Y/Y to $89.4 Million, with strong growth across all three segments.
Adjusted EBITDA reached a record $40.1 Million, expanding its margin by 90bps Y/Y.
Free Cash Flow grew to a record $12.7 Million, supported by strong operating performance and capital efficiency.
Net Leverage fell to 3.4x at quarter end, achieving the targeted year-end range a full quarter ahead of schedule.
Revenue by Segment
Forward Guidance
PlayAGS remains confident in its ability to exit 2023 with net leverage in the range of 3.25 times to 3.50 times, supported by strong financial performance, growing product appeal, and focus on capital discipline.
Positive Outlook
- Continued strong performance of established AGS franchise game themes in the Mexico casino market.
- Successful implementation of global installed base optimization initiatives.
- Sustained Spectra UR43 demand momentum and strong performance of multiple titles on the cabinet.
- Strategic focus on broadening customer account penetration, particularly with larger multi-site corporate operators.
- Ability to leverage a deeper and more diverse suite of game content and cabinet variety to increase average order size.
Challenges Ahead
- Modest decrease in international EGM installed base versus the prior sequential quarter.
- ASP decreased modestly relative to Q2 2023, largely attributable to product mix.
- Increased debt service costs consistent with higher market-level interest rates.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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