PlayAGS, Inc. (NYSE:AGS) Q3 2023 Earnings Call Transcript

Kimo Akiona: I mean, again, not ready to throw out a target in the future for you. But I’ll say that we are as a leadership team, right. And across the company, we are focused on incrementally improving EBITDA margin consolidated. So I think you’re starting to see that now. Obviously, there’s a lot of puts and takes, right, and there’s a lot of difference of variables that go into that. But again, not ready to put out a target. But, we’re intent on improving the margin as we move forward. And I think, we have the different tools in the toolbox to do that. Like some of the premium initiatives that David talked about, I think, some of the new products that we’re rolling out, I think you can see some of the initiatives we’ve already been working on, we’re already gaining some call it SG&A leverage, as we move through this year, expect to continue next year.

R&D is really the one that we’re intent on, continuing to call it spend at the similar rate that we do today. That’s the one that will be ongoing, but, again, intends on improving margin and as we go forward. So not ready to quite give you a target just yet.

Operator: Our next question comes from Chad Beynon from Macquarie.

Chad Beynon: Thank you, evening, thanks for taking my question. I wanted to ask about interactive 20% year-over-year growth, which was the strongest growth within the segments? Kimo, you talked about Q4, maybe slightly lower growth in that, but really just wanted to have you guys expand a little bit in terms of what’s working. Is it more titles, new markets? I know Pennsylvania, Michigan, and New Jersey, are the big markets. But at what point would you consider kind of moving into some of the bigger non-North American markets, given your pipeline of PAX?

David Lopez: I mean, I’m just going to be a little more specific when you speak of non-North American markets, what do you specifically like? What would you refer to that as before I go answering a question that I don’t understand. I am sorry for you question again.

Chad Beynon: Sure. Other big gaming markets, like the United Kingdom.

David Lopez: Okay. United Kingdom, I mean, we do business in Europe. At this time, I think that most of our opportunities still lies within North America. And I think, if you look at Eilers and you look at our success with game titles, and you look at sort of what we’ve done maybe over the last year or two, and how we’re just posting up on Eilers right now in the top five, for some of our game content, I think Chad for us, it’s making sure that we’re in every jurisdiction with every customer that we can be in, in North America, continue to do what we’re doing in Europe, because we are still doing it there, right. But cadence of rollout of new titles, and that’s where we’ve made some of our investments. And there’s a little bit of a nugget that we had in the prepared remarks there.

About, we’re going to offer new content through those investments that we’ve made. So we can put more content out with a better cadence, and then b, we’ll be in a situation where we can offer new game types, we’ll get into those game types, maybe on another call. But there’s some of the most popular ones even as simple as we released our first three real game, Mega Diamond. So three row games are very popular, as you know, we released our very first one, and it’s the best game that we’ve ever released by a huge margin. So that’s what we’re excited about. It’s all about content for us. We think that content cadence, and really just taking a team that we have a lot of confidence in from our R&D team, to mark our commercialization team and our leadership there.

We are just very comfortable and very confident what they’re capable of doing.