- Earnings call transcript Q3 2022

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Operator

Hello, and welcome to today's AGS Q3 2022 Earnings Conference Call. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions] I would now like to hand over to our host, Brad Boyer, Senior Vice President of Corporate Operations and Investor Relations. The floor is yours. Please go ahead.

Brad Boyer

good and operator, you, afternoon, everyone. Thank the to PlayAGS Inc. Welcome

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David Lopez

good and as third Brad, QX. of our carried into extremely with our Thanks, pleased improving everyone. financial recent over quarter afternoon, performance trend I'm

results you to would I walk draw X through your to will detail, our the highlights quarter. financial Kimo in attention greater While like from

First, continues by domestic recurring EGM over our revenue for our beating revenue for tactically year the quarter, including improved our performance expansion of prior base. quality recurring footprint QX levels investment, topped to and consecutive installed drive by performance the million overall X% premium $XX XXXX Thoughtful game consecutive as quarters, exceeding we capital the XX of X%. second strengthen

content increased first the unit year-over-year, Second, our complementary increased core penetration our added time growth topping and by depth EGM portfolio, The of global X,XXX than EGM our since markets, account unit sales customer quarter. XX% into sales units drive international XXXX. to in QX the more for combining sales

table industry-leading Third, and adoption and EBITDA adjusted quarter, in our operational quarterly and our the past sixth performance increased progressive improved improvements for for quarter, PAX further sequential consecutive by in time adjusted customer consecutive growth Fourth, delivered the execution, quarters. performance seventh our while revenue seven steady the for consolidated product sequentially sequentially company-wide the ninth technologies. supported our S game card revenue Products supported EBITDA of Table segment by shuffler

have to in of position less in capital management year-to-date a achieve strength leverage us and performance put our than target year-end net our Finally, Xx. operating efficient

attendance, in last as most strongest established Expo, even shareholders. we've by including encouraged Las employees display about and were for or feelings our diverse Gaming month our excitement on we our I'm lies Vegas at for the I'm year-to-date, more those and momentum, ahead GXE, what in was some My tenure competitors portfolio excited our that as everyone our company my even echoed see. operating improved of While many and in our product the new My diversity customers, AGS. peaked presented to lineup of Global product of by

nearly many New star Xx expectations, XX spot our of undisputed cabinet lived for to are of to highlights new lined show casino gaming support on performance the top operator’s at cabinet year us initial must-have GXE, the October Spectra's With Report over become in performance Spectra reported Eilers the achieving category our Upright there of our and new titles offering house While up launch, Spectra's the was expect products. next-gen cabinet, family Portrait first a the to Cabinet with every floor. the the up the average. high X we has with at

In should showcased segment. first-ever opportunity our our operators' rooms. in market content of Spectra, base performance our content capabilities addition also Like of the expand we high-denom and to turbocharge installed but performance provide on replacement they also high-denom improve high-limit with games titles not be mix new to delivering team our games first These product only inside point Spectra, expanding offering, share. our game outside our and sales and appear solid unique both core

number brands of Looking a content array beyond segment, confident increasingly we also content, of cabinet I'm and our configurations, can premium our continue quarters proven build consecutive XX new product by position an in pipeline, diverse growth. game market's GXE robust supported on AGS our the unit and growing of to cemented further high-denom premium a

table of potential. first party and as a providing content recent showcase With of transformation content from creation at X GXE, revamped games for team all development way customers, coming-out display sorts Finally, by helping a GXE the served AGS X unveiling team's innovative our to our of truly in on Outside game conception formal their stage our expanded interest of to of investments studios the true brand. variety was our expanded customer of commercialization depth our portfolio and equally the products content for change see. think as The was to strong. resonated about the they in to suite EGMs, with added our

table coming more the show the should the near-term space, I'm to our both exiting should allow their industry-leading to S, big-picture I us GXE PAX single-deck EBITDA technology progressive product serve shuffler commitment we of for continue am steadily adjusted our the takeaways of card to by choice All and leverage innovator years table confident as the within grow to attention, while from many saw garnered to customers with most our performance, years. will over current the what boost for financial even product our game encouraged mean our operations. table and our partner along told, the further revenue come. portfolio, to optimize demand look opportunities While

just takeaways. a are of Here few those

We have EGM content expansion significant a demonstrated in core our portfolio.

are innovations and product what highly at momentum premium quality within the EGM show. competitive and Our we making hardware and huge saw strides. are notable product

continued results more detail. Our With along getting a for walk greater recognition money in few and EGM the investments is are Kimo have space our continued we for success opportunities will industry These to over the turn provide with examples international future and to of the to gaming, team our successful year. time is fuel call to come. our just quarter years leadership strong I in market execute. will that, And growth done online you the finally, through third our work now to cultivation product the table each in product real of

Kimo Akiona

our We to off highlights address to we few global David, commentary call providing contemplates a like conditions. thoughts reviewing would would outlook. on to balance and a It from good by quarter also close sheet I flow in you, our on afternoon, macroeconomic items quarter QX. and no some the Thank changes start today's to is my important fourth business and ahead cash by into sharing perspective material note, like see some look as we related everyone. the prevailing third few how trending forward-looking

quarter expanding operations revenue quarter, installed The our $XX domestic domestic second domestic for to trends X% EGM third RPD business the positive first the quarter. revenue increased the approximately quarter gaming our continued base recent EGM Turning topping consecutive million. and into EGM our EGM for with domestic year-over-year $XX to within straight third sixth underlying recurring business,

ability At EGM and growth with installed simultaneously premium prior Our XXX of further the year quarter, XX% third the to increasing penetrate domestic drive in continues to compared period, RPD. of our premium installed for base premium base our domestic sequentially. approximately to end game accounted segment market the the gains reported mix higher-yielding points in X% basis

tailwinds consistent GGR revenue to In initiatives of our performance our the served across created domestic supported continued markets trends addition in recurring our our remarkably footprint, further the premium base game quarter. installed implementation EGM and by optimization growing

configuration expanded premium offerings ahead Premium expect our performance breadth strong package premium segment our content the drive and game footprint. cabinet of the of growth we fourth continued further Looking game quarter, the our in Curve to Orion to and

to EGM third $XX-plus begin to achieve quarter. prior year deliver to base. domestic These a content have our quarter-to-date, exceeds historically sales. leveraging us to normal high-denomination our further quarter base Additionally, we the the allow that strategic Shifting domestic consecutive growth first-ever for our RPD yield consecutive observed installed domestic comfortably EGM trends game installed plan with extending growth sequential and combined EGM to seventh EGM revenue we should drivers, RPD levels, seasonal streak two optimize

of select penetration, The unit first unit from quarter. performance investments, into XX% leveraging performance strategic prior for our of of year, QX incremental eclipsing Third sales of in customer markets versus time account X,XXX over complementary the the improved harvesting returns drove accelerated increased exceptional the international further quarter game our unit global R&D sales and the by XXXX. units our broadening sales HHR our since

to EGM performance. ahead expect quarter, Looking strategic our unit we of same initiatives to sales fourth set the the underpin

and initial Additionally, to new demand. both delivering stimulating gaming and, of game rollout a Spectra robust in performance cabinet of which our customer quarter, are we strong the targeted content execute in plan turn, high-denomination

impacted customer behavior achieve sales to normal what continue equipment observe the exceed macro market-level we Combined, for we global as to these unit should economy have levels. date. lies materially XXXX over quarter fourth demand allow relatively concerns believe QX us ahead Finally, to global that not factors purchasing purchasing EGM

in Third or accounted for $XX,XXX selling price, consecutive Curve product cabinet quarter for mix the quarter significant eclipsed fourth premium-priced quarter. the ASP, our Orion global of portion as our a average

mix, quarter. recently integrity our of improvement price the on third expect global to track continued product further including consecutive sequential anticipated we changes achieve program by to compositional cabinet, initial favorable of Supported fourth to the modest fifth overall launched for sales ASP in our with our level eclipse quarter benefited Spectra the performance. Additionally, ASP implementation ASP quarter XX,XXX

QX to international of EGM international trend end, Mexico's recurring revenue XXXX, continue increased X dating $X.X million, for to to Total segment. of increased the to our by into has To consistent revenue EGM supported consecutive EGM the fourth sequentially quarters that year-over-year recovery. back XX% Turning expect international a continuation we recurring quarter. macroeconomic now

the During restriction-induced as the formally a installed international EGM third units these on quarter, of be low our reported there elected revenue approximately COVID inactive would following from back X% identified to international remove was units that as we felt base probability we recurring turned previously our shutdowns.

recurring did to our immaterial quarter, our Although reduction XXX-unit in EGM over in international revenue result this in base. reported an international the reported installed

we not ahead, our contraction forecast look installed level to serves good of reported any level we do international as the business. scale believe within as the base additional a QX anticipate base and Importantly,

addition once S our The adjusted of paced performance shuffler eclipsing EBITDA, in progressive third revenue units products $X PAX record XX business, over in footprint unit again, quarter. million new Looking and performance beyond XX quarter table the our delivered nearly and million, our increase $X.X record with respectively. and AGMs,

our reported During our of a conducted review comprehensive quarter, products the to reduction unit table we base, third led in which counts. installed a

reflects to the adjustment Following by accurate most revised adjusted multiyear installed all the KPI base, this of products affected revenue review, on believe we our alters segment's were count and Revenue installed the lease. growth EBITDA trajectory. base importantly, not this and EBITDA a at compelling more normally revision the and

building and quarter. QX, on table the third expect expansion less growth achieve opening XX% new sequential calendar, sequential revenue modest to in the prolific quarterly growth, achieved we products Looking to a casino despite ahead

quarter. $X.X license intermediate-term assess Products sustain Table growth site the throughout consistent eclipse adjusted additional remained for outlook Interactive. for should we progressive of accelerating adoption the revenue to demand shuffler quarter consecutive the quarterly rollout the quarterly As positive momentum, trend the segment, we business. business believe our the revenue steady the product within EBITDA sequential Shifting Trends as and was stable million within XXth and

over as year to revenues over continues RMG efforts year, XX% growth interactive Our to grew versus on fruit revenue accounting in North our money XX% the opportunities period. of within compared refocus American the channel resources the prior within by for bear this gaming to real XX% QX market prior

improved AGS as content introduction should achieve begin should online-only our BXC game QX, content online are and Looking additional revenue believe the rate reach steepen flow the incremental revenue to able channel new interactive online within growth, perhaps growth eventually of of the new we to the into the ahead, of the activation jurisdictions customer expansion as into relationships, drive while of North we content American business. of the early

Now margins. turning to

Third our EBITDA QX with quarter XX%, line margin expectations was on adjusted call. in articulated

fluctuations. our reflects to greater as sales EGM operating operations unit gaming mix business a revenue, market-level normalization a Further, which Our EGM carries compared discretionary margin third quarter and of lower margin expenses post-COVID cost revenue. in performance inflationary gross

and R&D to from in modest a while and moderation future disruption with run the below and of EBITDA that in chain achieved quarter. we which inclusion begin fourth growth to should of QX XX% third expect a adjusted the supply realize value-engineered cabinets our a gross we benefit the commitment to margin to be margin investing support global our to revenue complement accretive, ongoing ahead Spectra in slightly initial in logistics to expenses line Looking produce seasonal opportunities should GXE-related is the of full quarter,

less of the months the at segments leverage financial consistency first day-to-day of just stood within confident the highly total in $XX our improving multiple we year, the with our ended product and continue and through Looking by steadily upon year-end building Xx. million target Supported balance deliver XXXX net ability we business available of are within performance quarter to than sheet. observe issued our to the momentum third at previously the X operations, Xx. our We the of leverage liquidity net over

the a and flow items for remainder I closing, the the related in Before perspective address performance cash like to few some of our would outlook to our provide quarter on year.

approximately expect Measures quarter the positioned to Third million, the demand and to our for response strong previously high-denomination content, timing equipment of full spend expenditures drag the $XX driven demand near Free a premium ensure $XX to game in negative lead Spectra our totaled quarter by we approximately $X issued capital taken new million, we million capital expenditures million to year customer standard year-to-date end a land $XX market's in was and to of products that future now our quarter. third the within bringing $XX high-performance top range. unwavering cash and sales initial to QX cabinet EGM are $X million. flow capital times fulfill created million working capital the

debt in our higher quarterly affected recent a cash as free costs of slightly performance. increases further Additionally, rates result service flow market-level

momentum, normalization like into now generate free we rate plans for Looking even ahead questions. higher concludes interest open the remarks. believe operational budgeted would to and after working Operator, to to environment positive lineup account. our quarter, We our cash taking prepared capital capital the anticipated fourth sustained allow us flow this the prevailing spending should

Operator

comes from Stifel. Instructions] first question Stantial Our from [Operator Jeff

Jeff Stantial

North to solid at sequential thinking going you on feels the other Hey, takes puts our yields, for when Thanks in rate? any frame ops contemplate it, reported The of growth the got content. looks growth the Can than of and good a mostly on of expansion if levers just lower the in game quarterly about call hand, kind stable. day, one consumer question. that everyone. wanted to America taking kind a we're kind But sequential XX possible, of start kind QX. and I tick just it change, XX.XX business, like the premium

David Lopez

the and quarter a comment of on up. think There's just you've and itself, summed puts I'll takes. I lot So

of So think movement. there's I a lot

in with I think the from we've he premium is, extrapolate But just get the beyond key premium think made is see that the progress of and business there, progress good kind of hand, doing news is numbers stability. on into happy fantastic. quarter. our one very can our there, what there, We're is we sort I business the the

lot. Kimo, a it can bit so seasonality you through talk little go a isn't I whole There's I'll little think into and we're bit. a he ahead of that for that comes this turn -- us, to play movement over

Kimo Akiona

that's part mean the interesting I it. of

right, to some you starting seasonality think are right? hear out see, And I commentary seeing. people call there, like it, we're I that's normal Jeff, think businesses, their let's in what

we think QX expected be. up it I with ended RPDs where where to

normal than think on. don't I other anything there's So going

I seasonality theme -- seeing. seasonality kind of think, that to normal seemed be we're the

Jeff Stantial

much the to getting of sort of side me that back getting of us return versus let That's versus XXXX makes cost guide can used versus fully for that you around kind some puts Great. we you to anything as XX% XX% Switching kind normalizing past Kimo, Okay. the over out supply that hanging couple And of level. range investments to, of chain go XXXX XX% is R&D years things, for a the you've takes to margins and how on to if replacement cycle helpful. to frame made else that into sense. the of lag back know contemplate? in just

Kimo Akiona

Yes.

seeing was working 'XX, similar gross knows, related And through margins comment lower much QX think Like the I back. business we're in I incremental too to won't QX, everyone just I'll quarter process. that see saw carries the maybe in don't So I coming than dramatically, but past our think on think business we what's pretty right? was as business. QX for-sale recur to for-sale the or say I I'll -- the what budget what 'XX, we're we to still

mix bit a little sequentially of degradation So the is driven. margin

on that you right? degradation is chain seeing. see we're that little think I do is maybe supply thing specifically is again there, one side, the And think ongoing, a other bit I of inflation for-sale

some there. have But side, in component still costs. cost we We do seen letup inflationary the transportation on see

I that right, done positive we we're think it is it. able fully in is we've market. We side, demand to buys and see accepted to fill do seeing. we're But we've inventory the best strategic demand that on and do some with the it the that can we is, the fulfill on made what decisions

So there's positive I there. think a

think a looking. forward little I

to continue will We in invest R&D.

as depends R&D specifically a too 'XX comment But And forward, of level that similar higher. a to a not not So macro on going I'm at maybe be move lot will going the yet. into if on tick 'XX. we

it's premature, right, top of you look storm I I but mind, think much that. it's won't macroeconomic maybe and is into comment ahead. it's but It's But we'll say too premature, about talking a think. mind, of little bit top of future. as a the bit headwinds Everyone I a on

Operator

We Carlo Bank. to now from Santarelli turn Deutsche

Carlo Santarelli

ask David, courteous Thank is for that the you. color. into Thanks Brad. getting you David, you. be if a If know XXXX. But relative were of I guys question to want pertains maybe sale demand we little Kimo, it as envision flattish a the XXXX to XXXX. opportunities. this flattish I expansion one to to replacement, too much not I bit for your with differently unit

into incremental With the sell X,XXX or have, the, that take, guys you the the you for year growth do full that kind presumably have, 'XX? think of you terms of cabinet, will the how in units trajectory you about 'XX Spectra the content momentum give

David Lopez

Yes.

I studios put can have producing time the at the exact think Curve got lot this getting I in gain all all can got we news So without obviously. We've studios action our there. us still X that that games. into good But a a field. like number, XX, We've best of into you said, is is, got Spectra the first majorly say moving. It's the That's I'll that for answer we time. content X

So that's great news.

the think is momentum I So there.

think I product there. is the

how think general, in onto really are was Eilers investment numbers confident in do -- is our specifics, that because very and the fantastic. on were can sort And like, of the we can't think what The is work good have that R&D to in momentum I the our right year. you're sales as grow looks doing numbers, Report there that R&D, the But that don't customers the the But all coming than anymore? And to you're drive on I us in warm you and into far obviously, things we you go. Is pretty to out that, topic drive to bellwether are what current GXE the see the that going get you businesses, in we much just production anything do I hot side, our now. better studios warm, the there is know, of for for we're of you -- in and sort can the in going are proud coming and of see as say that did performance Kimo, guys in many done of that momentum. a product. can't X -- performing up have add? like that. things again, I

Kimo Akiona

think you key covered I the No, points. all

Carlo Santarelli

just could, then $XX $XX in And but SG&A range. of follow-up. if kind been a million little choppy, has to I this Great. million one

think into cetera? inflation everything As this Are 'XX, with kind an presumably of this today you you rightsized albeit perspective? of you 'XX, as kind business where about there run you are, look from ahead et at in guys SG&A is point need rate, good you set some and of a kind the

Kimo Akiona

Yes.

substantially, think I Carlo, yes. I -- think,

think pretty set on I the we're SG&A front.

range good to I that the use think have. you rate a So going forward, it's

Operator

Our David next Riley. from B. question comes from Bain

David Bain

Thank I the third the Texas. guess for would in been have opportunity quarter you. I Great. And nice one results. AGS first

It timing? like expands, there you like opportunity participate could customer for development pretty by WinStar, seems any largest a guys. similar big read deal on you of your to kind early a If structure,

just this of have any comments big-picture So you trying get kind perspective to there. at a if I'm point

David Lopez

Yes. Thanks, David.

them. we very one down products the providing wheelhouse. area Texas in We've of tribes the times It's challenging fantastic there the for in have, some I'd relationships. and obviously, opportunity say, most our really is us. squarely tremendous a committed where of So been an It's Class to for It's II.

transpire opportunity So We with about -- Those to early we're And asked will exactly -- opportunities will Oklahoma how how a of things think to casino. fruition much think now. on what tell the us. get how or that the there, it good, of really what and on Yes, -- Board. it actually Board. have all referred are for are development, another And it are happy early. you've some I one to options I you that's I'll agreement the that an certainly happen? is it's sort question that's that little to fantastic. but think like is out I come But Could the Too transpired. your a bit the question development all the think

David Bain

Right the kind to bit something to depths on of kind with is universe but little S And something could for know that this for kind maybe we grow a shufflers seems complete next should can portfolio, give extension to and momentum. continues shuffler table product guys. the just It broaden like on. then you view PAX you that a as around table transformative side shuffler of that you're it's Okay. there? the piece more take us smaller I'm that scratching surface nicely portfolio the rollout even the Is that of maybe the just wondering I of the if feedback. And

David Lopez

we our reliability than there. a little faster as as probably could to even is machine to slow We're smidge The reliability more. I shuffler We probably we We're is the feedback is So need now, fast fantastic. But bit mean a on down there. be. right think, need I be. the

GXE. available, when the time selling I really first is think was on our service fully commercially it the at is shuffler This we're obviously. point

is build The is tell of interest been not today now. high forward. portfolio So substantial I Obviously, a the would S, -- but to going recent division, a the expectations most can't is X out. have one sort building we we've just that have on there shuffler shufflers very PAX good games love growth for. got it we'll our out. and we'd high. and going well. that the say But of We in one view keep and we'll has opportunity rollout that you here portfolio overall. the part, been shuffler to that sit our when exactly And come view table next out right

we've some the some got great employees. experience got So in We've area.

been been awesome. dev team Our has Service has doing great.

we've been the the we're getting really really, customers. team that once work done the so feedback has proud, of again, from And and

Operator

We now turn Barry to Jonas from Truist.

Barry Jonas

It operator like is the of now types than guys. curious consistent AGS' of Hey, I'm sounds for sound specific others geographies outlook or at pretty point. overall potential operators horizon. better the on storm certain that just despite from perspective this

David Lopez

in nothing trailing think right lot coming. There's is be around "Hey, out or mean hey, that's something anything that's thing that really of heard been I feedback. nothing rather saying, It's that there. off." of There's yet. consistent. not the that we've been see We're that numbers there the to GXE in now, is the There's we a don't business I indicate, our numbers. strong. seen happening where incredibly continue nothing Barry, and were at in nothing us There's certain customers coming this to corner

the sort other now. the and stands certainly where pick to that's try right prognosticator point, in don't don't I So of numbers. it one it this and indicated want when versus be us to see anything at they to a we haven't

Barry Jonas

follow-up. Understood. Understood. just for Then a

You guys HHR have out been performance. calling

HHR Just could big become? it wondering for you? think now is And you big how how

David Lopez

don't we out. break So that

it of over the it we to number but can, to we characterize best give out sort to turn Brad So going that at don't really I'm this point.

Brad Boyer

of that seeing Yes, your growth kind everywhere. Barry, market HHR I the the think of is beauty

addition of and You're the facilities in existing seeing growth with in facilities. markets, existing both new

that it area come seem You're bit online sort for seeing time like further multiyear the like that of of momentum maybe market over first legislative new in that in there's period. could does Hampshire. the little a a expand And jurisdictions New

think, is that for I systems So us, the a with relationship partner. beauty great our we have

look Our just look we're the down to that into continuing as to market grow we and areas and to tap games continue performed for it road. well,

Operator

Our Katz next from from comes Jefferies. David question

David Katz

arc everyone. Thanks you including pieces a premium talk base which to right, I it, be just point. trying to and piece out think that the sort at good a fourth -- wanted RPD a base in longer total figure grow some becomes term But know meaningful at on Hi, what similarly, installed accretion I point, there should going the bit some the RPD the here of there, upward really as installed does some me. the seem little I beyond on afternoon, looks variety And we're of because little that just that quarter. about out of for like increasingly arcs accretive. it there's

so us be you it just would little if bit, unpack that And could a help helpful.

David Lopez

So a there. off David. I'll it kick Thanks, bit

with, at I'll that know and think commented then it now. I you growth obviously, year-over-year performance talked substantial. When and obviously, our on and you just premium premium, growth our look we've I about start was quite premium sequentially

-- time. we over that and I begin think grow will, time, that it help that see over RPD will to really support

Our at you short then at the now. installed we're actual "Hey, say, right same the not base, the fantastic rate. of And success been look nothing there base you has installed growing

we're better -- too anymore. the what of really We use right some do and newer say even to what off pruning trading try installs." are now. we installed focused that's base of the much on that seeing some not for don't You're term we much we And

sort think installed on can color you we correctly. our we're manage arc little to that? add to. that anything drive continue premium on that referring to as will base, of that far but focus that because a grow we being do the We that and Kimo, number drive base that just think you're as making sure I have the

Kimo Akiona

and get if today, is returns that I by into our mean, And strategy, best early right? which how I premium, really entered us the that you going think, we making the always fast the talked I of increasing of think to on, just within some focusing right, we as Like you've investment on think that we we back really moves No. base. right right, business. the is on a about, to our invest execute health was can base in I forward did our lot David, seen when we strategy go pandemic, our we

you'll we really, I as we're returns, to just focused is see yes, move on grow. So installed right, base returns. what continue cash total But the forward, think

So we of want most to that. be mindful

our just best that premium would is trying investment, mean much as returns as a getting in to investing increase on the which So way we can.

David Katz

And could broadly you commentary there if out some I Texas, sort in into release, But larger help of the Can from what out it. in some of market apart I are growing your obviously, for sort that's that you Got separate that just opportunity understand where much double there? from opportunity there's future. tribal are just Texas that of and speaking opportunities the now. and a because deeper units think the are one you large us in and footprint are the there

David Lopez

I'm Brad. to kick going over to the that He's expert. Texas

Brad Boyer

Thanks, David. sure. Yes,

facilities into favorable of that our in by commented issued call the advance moving last we was Court. Supreme ruling partly was we one the kind in the that of June, So back the that on started to of ruling

So And we more added facility additional QX. position rightsized growth we'll nothing in back on would maybe I through QX, look to incremental QX. a of moving some units some in scale. our and that say facility we into large we continue to that deliver there there, in kind but in started

the really Paso our in Rock add El to on the on Houston, I where of state. magnitude, we outside of broaden addition, within facility largest exposure additional some within did area But in our of the of -- we the ruling as state we Speaking partner advantage ruling order would there the sort the took say, was back in units well. So of

Operator

from to turn now Chad Beynon Macquarie. We

Chad Beynon

taking afternoon. with my wanted for allocation. question. I good capital Thanks start to Hi,

your talked You've goal about sub-Xx. of

that said achieve of and that end reiterated You you'll year. that the by the

capital I end now take year, that might your at think achieving a that run, on how now and new range look that should from of in think through the the is share the in repurchases? you're be the M&A company running But from about how actually a maybe terms you how kind of we Anything in that you'll be TTM range it different there. basis. of opportunities should

Kimo Akiona

don't And allocation pretty far course about we've always there's said talk strategy. mean, with capital going I think of Chad, I'd be it's consistent as changes as pretty been environment in of the any I'll quarters. couple over macroeconomic consistent. I has I part it's year. of what last the start to say there's off. the that the calculus big think next

move I always calculus as this think the year. as as rising interest right? are that and year we time not blind we well, been next enter I So we in we has of that living are through rates in think a

to capital think going same. I So allocation be is the

we in as business our to are that. support we'll the out continue if in think feel year. invest any And that things i.e., I be appropriate. like mindful we'll Again, our organic of returns we lease tuck-in as like small of first We'll that or franchise in different we well, quarter R&D to games that those the continue have. tuck-ins this best we exists, did in some of to invest see there's table small the continue there

dramatic see changes forward So allocation I any say that if capital to wouldn't you'll related strategy. going

Chad Beynon

kind And big of of shipped. how we of of a then out be. big we're be can when expect orders off, some frame first or trying house provide beginning Can kind could should the to you opportunity opportunity. can Spectra remind Clearly, the kind placements -- of the Okay. bulk of average Xx you this to these us

you'll to addition know terms just a secondly, I the on earlier first, kind be question from what could timing? in a was frame year-over-year to is? units selling other basis, there is but opportunity up in way the the be asked the And then of Spectra. out of units So

incremental place this Just it the currently an out selling of is and could trying additive floor, on areas figure be the to into. if to you're truly kind

Brad Boyer

Brad. is this Chad,

we as of quarter mix to year. share for drive next commercial first is soft not the here the So of It's highlighted lion's really XQ. the launch in fourth quarter. the remarks, launch full-scale the Spectra prepared scheduled the The going in will in

to we As with the X really said, we about Spectra. offer have support XX feel year launch. good titles we're in We heading where the

I cabinets for same company's X, in think history, time. is have sale relatively right the I now our market the that for what call, beauty at the new the time us in we for first would really

differentiate of Our high-denom to product. content our really Curve helps sort

that mix maybe we we in to really drive haven't past unique So help get some there. had the opportunities some incremental volume

to -- starting the I So truly building can think really of we move portfolio. we're a down path

that some I drive seen over opportunity we've helps really to incremental think time having cross-sell business. as

we good we of as have front lineup think cabinet really the we look ahead in about I feel us that 'XX. So to

Operator

to We Capital. now from turn ROTH Edward Engel

Edward Engel

Hi, XXXX, Interactive, to drive to RMG for to continues here kind return can quickly Within nice growth thanks we there? taking my return Or of investment still in from here, kind that are you margins EBITDA of growth XX% see as saw question. to XXXX? ramping sequential your

David Lopez

turn off, Well, I'll over I'll and to here. kick it Kimo

we operator we're future. a substantial think obviously, It going it's that going gaming. as far on the saying rollout forward. be going slow think as a might rolls everyone's business going money we be side the big into real of and to So side interactive -- on to But vendor taking states is this part it North be throughout without America, goes that as out

hires. business those ones going continue think beef our So our very We investments. and to strategic we're going to be help for good to We up they're business. content recent some made very make to the

in we mindful But that investments. to as we he's anything I'll the and and that if We'll margin Kimo goes, to kick far of revenue add forward. those going see there. see of So got make trajectory be some as growth will over as our

Kimo Akiona

Yes.

the making that. always the it David we it that kind will like kind back XX% So said, and word out, business caution we're think interactive an mindful always and that quick. yes, invest we we've production to increasing cited. we word in It's return? investments profitable, I making But think, will that I pretty that sure using wouldn't how say, And in today but game I right? I would smoothen you the range been to our I run of that's business right? margin -- getting Yes. get of use subjective, will of return that

Edward Engel

to relative newer guess, And mix in your game is that I Thanks then the still table Great. color. just a of gave shufflers average accretive that segment, reported to lease the monthly some to more you for KPIs that price? shift out

Brad Boyer

This take one, I'll Yes, is Ed. Brad. that

accretive normal expect sort ALP. a the little in a this loaded in to bit highlighted we we of the fully So but earnings be scenario, to release, would shufflers

operators basis, we decent on a of units and given have where do converts number rollout it out take to think, on in unit. Generally, trial that revenue-generating the of then unit are trial. are a I phase, sort a we the

position of to so comparison. lower-yielding definitely ALP. to some start at the to within shuffler reflected benefit I year, get would only acquisition and the over a table grow get So side you is mix see have will to then does start influence from see accretively ALP. you Lucky the as And over are year-over-year year-over-year, critical been time, bet a a call But product it in you so a this other continues side that time earlier the you layering is will look bet it mass, that in if which

Operator

conference you like participation. This thank our for We'd call. to Q&A concludes and your today's

lines. your disconnect now may You

PlayAGS (AGS) 12 Nov 222022 Q3 Earnings call transcript