PlayAGS, Inc. (NYSE:AGS) Q4 2022 Earnings Call Transcript

Operator: Thank you. The next question comes from David Katz with Jefferies. You may proceed.

David Katz: Thanks. Thanks for taking my question. Hi, everyone. I wanted to just go into the product sales number, which obviously was stood out as having some strength, and I think you made, some mention about some international sales. Can you unpack for us where those are? And I’ll throw my follow-up in, which is what are you hearing from operators in terms of their comfort with budgets given the economy question that’s out there that has yet to be answered. Thanks.

David Lopez: Thanks David. And thanks, and I think good morning where you are. So appreciate you calling in.

David Katz: Just barely

David Lopez: Yes. It’s either so late that it’s early or so early that it feels late, I’m not sure, but…

David Katz: You get that right.

David Lopez: So on the, yes, on the €“ I think it’s really Latin American sales that you’re referring to. It’s still pretty to sort of very small. So there’s not a whole lot there to unpack at the moment. I think the potential is there and in the future aspirationally those numbers will be much higher going into second half of 2023 and I think into 2024, but I’ll refer to those as aspirational numbers. But it is something that we’re focused on. I know that our product as a, an update I just got, what two or three days ago, our product performs very well down in Latin America and in a couple of countries in particular. But we got some updates there, so that’s going great. From the capital perspective, game sales perspective, its like; I think it’s the same thing every quarter.

We don’t see anything at this point in time. We’re waiting as everyone that watches CNBC, we wake up every morning and we see the news and then we see numbers. We look at numbers real-time here, pretty close to real time. January, we mentioned in the prepared remarks, so it’s a record January, again. So we have a record January for game ops. Game sales are strong. Customers aren’t indicating that they’re trimming anything. There’s nothing that’s been said to us at this point. So as I like to say, the gaming industry has not flinched. I know that, it seems like the stock market has, and watchers of CNBC have flinched, but right now gamblers have not flinched.

David Katz: Understood. So if I can just follow that up quickly, right, with respect to the quarter and the game sales, we always look for sort of large chunks or lumps that may have driven some upside? Or would you consider it just kind of a normal kind of growth across the Board of your customer base?

David Lopez: I’ll give that one to Brad for, he likes it. This depth and breadth answer; it’s different than it used to be.

Brad Boyer: Yes. I think it’s €“ I think it’s the latter, David. I think it’s a function of really key strategic priority of ours on the sales side is to open more doors. So it’s really twofold. We’re opening more doors selling into more customers, and given the added breadth of our content portfolio supported by some high-denom games we’re able to drive up our average order size. So that’s really sort of the method to the badness, open more doors and sell more units into each customer. So that’s what you see in that quarter. There’s really no large outliers or anything in that number.

David Katz: Perfect. Thanks very much guys.

David Lopez: Thanks, David.