PlayAGS, Inc.

PlayAGS said Q4 and full-year 2023 revenues and adjusted EBITDA increased 15% year over year, though no exact company-wide revenue or EPS figures were stated in the transcript. Q4 global EGM unit shipments rose 36% year over year to a record 1,519 units, global ASP was approximately $20,700, domestic EGM RPD reached a Q4 record of $31.68, international RPD was a Q4 record of 8.86, Table Products revenue was a record $4.8 million, Interactive revenue was a record $3.4 million, and Interactive adjusted EBITDA was a record $1.3 million. Fourth quarter free cash flow was $11 million and full-year 2023 free cash flow was approximately $27 million; net leverage ended the year at 3.2x versus 3.8x at the start of the year. For 2024, management expects adjusted EBITDA margin of 44.5% to 45.5%, CapEx of $65 million to $70 million inclusive of capitalized R&D, R&D at about 12% of revenue, free cash flow growth of 25% or more, and year-end net leverage of 2.7x to 3.0x. They also said Q1 margins should land in line with to slightly below the low end of the full-year margin range because of about $1 million of used Orion cabinet sales.

David Lopez framed 2023 as a breakout year driven by “people, product and process,” saying AGS now has its strongest and most diverse product lineup and its best team and execution to date. He highlighted record performance across all three segments, especially the success of Spectra 43 and early traction in Spectra 49, and said the company is positioned for another year of outperformance and multi-year growth. His tone was upbeat and confident, with repeated emphasis on share gains, broader customer reach, and eventual expansion beyond Mexico into a wider international market.

Kimo Akiona focused on the mechanics behind the quarter: EGM shipments up 36% to 1,519 units, ASP around $20,700, domestic RPD at $31.68, international RPD at 8.86, and Table Products revenue at $4.8 million. He said fourth quarter adjusted EBITDA margin topped 45%, and guided 2024 margin to 44.5% to 45.5%, with R&D holding at about 12% of revenue and CapEx at $65 million to $70 million. He also noted the February 5 debt repricing lowered the spread on the term loan by 35 basis points and, together with a $15 million voluntary repayment, should reduce annualized cash interest by about $3 million at current market rates. On the balance sheet, he pointed to year-end net leverage of 3.2x and said the company expects to exit 2024 at 2.7x to 3.0x.

Analysts focused on the IGT-Everi consolidation, market health, share, valuation, the new Spectra 49 cabinet, international expansion, Interactive growth drivers, and the path for margins and free cash flow. Management said consolidation could create an “air pocket” that helps smaller suppliers gain share over time, but emphasized that AGS will stick to its playbook of investing in R&D, sales, and product quality. On market conditions, Lopez said Q1 looks stable, Spectra 43 is “crushing it,” and Spectra 49 is off to a strong start; Akiona added that international growth will come from broader Latin America, Central and South America, and the Caribbean, while Interactive growth should come from more games, online-only content, more customer launches, and better B2B execution. On free cash flow conversion, Kimo declined to give a formal target but said it should improve year over year and that 2024 free cash flow growth of about 25% implies better conversion.