Records in per-day domestic electronic-game revenue and domestic EGM gaming-operations revenue helped PlayAGS post a year-to-year revenue surge and narrow its second-quarter loss. Both revenue and earnings per share topped Wall Street forecasts.
In a statement Thursday, Las Vegas-based PlayAGS said its net income was $3.9 million, or 11 cents per share, for the three months ended June 30, compared with a year-earlier net loss of $42.6 million, or $1.20 per share, when the casino industry, and many American businesses, were shut down to flatten the coronavirus infection curve.
The latest per-share result topped the 18-cents-per-share loss consensus forecast of analysts polled by Zacks Investment Research. Lower depreciation and amortization expense and fewer one-time charges helped narrow the loss, the company said.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, were a positive $32.1 million, reversing a year-earlier negative $1.2 million in cash flow.
Second-quarter revenue nearly quadrupled to $66.8 million from $16.8 million and topped the $59.1 million estimate of Zacks-polled analysts.
“The continuous improvement being achieved as a result of our enhanced game-content development execution, upgraded product-management capabilities, and refined capital-deployment processes sets us on a path to deliver more consistent financial performance, improving our capital returns and leverage profile, and, most importantly, strengthening shareholder value over time,” PlayAGS’ Chief Financial Officer Kimo Akiona said in the statement.
PlayAGS’ domestic electronic-game-machine revenue per day was a record $33.11 and its domestic gaming-operation revenue reached a record $45.9 million, up from $7.5 million. PlayAGS said a greater mix of higher-yielding premium games in its domestic installed base and opportunistic pruning of lower-yielding units fueled the results.
B. Riley Securities rates PlayAGS “buy” with a $21 price target. In an investors’ note posted last month on Seeking Alpha, B. Riley analyst David Bain saw upside initiatives like premium game installations for PlayAGS and said the company’s recurring revenue model is performing above consensus, thanks to higher win per unit averages.
In June, PlayAGS entered Canada’s online-gaming market when the Ontario Lottery & Gaming’s gaming site, OLG.ca, started offering PlayAGS’ Golden Wins game. The Ontario Lottery said the platform would offer more PlayAGS games in coming months.
Also in June, PlayAGS said it will join Nexgen Technology in distributing Fast Cash mobile chip devices to Morongo Casino near Palm Springs, California. No financial terms were disclosed for either deal.
PlayAGS shares rose 75 cents, or 9.84%, to close at $8.37 in regular trading on the New York Stock Exchange. The shares added 13 more cents, or 1.55%, to settle at $8.50. The share price has risen 33% in 2021.
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