Electronic slot and bingo machine maker PlayAGS posted lower year-to-year net income in the second quarter, weighed down by higher interest expenses. But revenue hit a record, with both revenue and earnings per share topping Wall Street forecasts.
In a statement Thursday, Las Vegas-based PlayAGS said net income was $851,000, or 2 cents per diluted share, for the three months ended June 30, down from $1.5 million, or 4 cents per diluted share, a year earlier.
PlayAGS said a jump in market-level interest rates increased the company’s interest expense by about $6 million a year earlier. However, a more than 50% year-over-year increase in income from operations softened the effect of the rise in interest rates.
Analysts surveyed by Seeking Alpha had expected PlayAGS to break even on earnings per share.
Adjusted earnings per interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 16% to $39.6 million from $34.1 million.
Revenue rose 17% to a record $89.8 million from $76.6 million and topped the $83.9 million forecast of Seeking Alpha-polled analysts.
Gaming operations rose 8% from a year earlier to hit a record $61 million. Recurring revenue from domestic electronic gambling machines rose 7% from a year earlier to a record $49.3 million. International recurring electronic gambling machines revenue rose 18% year over year and marked the 12th straight quarter of increase.
Meanwhile, equipment-sales revenue rose 45% year over year to a record $28.9 million. Electronic gambling machine sales revenue increased by more than 40% from a year earlier to $28.3 million.
Operations revenue from domestic electronic gambling machines rose 7% year over year to a record $49.3 million. Domestic electronic gambling machines installed base was 16,422 units on June 30, a 395-unit increase from a year earlier.
In the statement, PlayAGS President and Chief Executive Officer David Lopez said his company’s strong products are creating significant momentum in all three PlayAGS business segments.
Analysts have been bullish on PlayAGS. In May, Jefferies upgraded the company to “buy” from “neutral.” In July, B. Riley analyst David Bain kept his “buy” rating and $14 price target.
PlayAGS shares rose 12 cents, or 1.79% to close at $6.83 on the New York Stock Exchange. The shares gained after hours as well, climbing 16 cents, or 2.34%, to settle at $6.99.
