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AGS NYSE· PlayAGS Inc.
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AGS NYSE· PlayAGS Inc.
Earnings report Q3 2023

AGS Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

AGS experienced growth in both gaming operations revenue and equipment sales revenue in the latest quarter. Gaming operations revenue increased primarily due to an increase in Electronic Gaming Machine (EGM) Revenue Per Day (RPD) by 9.5% compared to the prior year, from $24.07 per day to $26.36 per day. This increase in gaming operations revenue can be attributed to an increase in the domestic EGM installed base year over year, although there was a decrease in the international EGM installed base. Equipment sales revenue also saw a significant increase, primarily due to the sale of 822 EGM units year over year.

Strengths

AGS demonstrated strong revenue growth in the latest quarter, driven by increased EGM RPD and higher sales of EGM units. The increase in EGM RPD can be attributed to factors such as improved performance of the machines and potentially higher customer spending. The growth in equipment sales indicates a strong demand for AGS's products, which could be a result of the company's ability to offer innovative and high-quality gaming equipment.

Challenges

Despite the overall revenue growth, AGS experienced an increase in the cost of gaming operations as a percentage of gaming operations revenue. The cost of gaming operations was 21.7% for the latest quarter, compared to 18.3% in the prior year period. This increase in costs can be attributed to factors such as increased field service and support expenses, as well as direct expenses and related costs due to increased activity. AGS should closely monitor and manage these costs to ensure they do not significantly impact profitability.

Noteworthy

AGS's strong performance in equipment sales can be attributed to the sale of a significant number of EGM units, both domestically and internationally. The company sold 3,725 EGM units during the nine months ended September 30, 2023, compared to 2,903 units in the prior year period. This indicates a successful market penetration and customer demand for AGS's gaming equipment.

Summary

AGS reported strong revenue growth in the latest quarter, driven by increased EGM RPD and higher sales of EGM units. The company's ability to offer innovative and high-quality gaming equipment contributed to the growth in equipment sales. However, AGS should closely monitor and manage the increasing costs of gaming operations to ensure profitability. Overall, AGS's performance in the latest quarter reflects positive momentum and market demand for their products.

Source documents

Form 10-Q  filed on Nov 07, 2023
43 pages scanned

Reference data

Company financials Q3 revenue 94.2M
Analyst estimates Q3 EPS missed by -126.67%
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