Galaxy Gaming hails online growth as revenue rises in 2018

2 April 2019

Independent table games provider Galaxy Gaming has reported a 25% year-on-year increase in revenue for 2018, citing the performance of its internet-based games operation as one the main drivers behind this rise.

Revenue for the 12 months through to December 31, 2018, amounted to $18.6m (£14.3m/€16.6m), up from $14.9m in the previous year.

Galaxy put this growth down to higher revenue from its internet-based gaming activities, supported by uptake in its Bonus Jackpot System. The supplier also benefitted from the strong performance of its premium games such as Heads Up Hold ’em, High Card Flush, and Player’s Edge, which command a higher price point per unit.

The provider also noted that the adoption of an accounting standards update in relation to contracts with customers resulted in additional revenue of $986,637 for the year.

Galaxy noted a rise in costs and expenses in 2018, with the provider spending a total of $14.6m over the course of the year, up from $12.4m in 2017.

Most of this was attributable to selling, general and administrative costs, where Galaxy saw spending increase from $9.1m to $10.9m. Research and development costs also hiked from $488,829 to $926,474, but spending on ancillary products and assembled components dipped from $226,077 to $142,776.

Depreciation and amortisation increased from $1.77m to $1.84m, though share-based compensation declined from $813,480 to $776,354.

However, the overall increase in expenses and costs did not stop Galaxy posting a net income of $1.2m for the year, compared to a loss of $11,423 in 2017.

Income before provision for income taxes stood at $1.4m, up from $553,150 last year, with provision for income taxes down from $564,573 to $196,798. Galaxy also noted improved adjusted earnings before interest, tax, depreciation and amortisation, with this rising 30% from $5.08m to $6.59m.

Reflecting on the results, president and CEO Todd Cravens said he was proud of the performance in 2018, paying tribute to Galaxy’s fourth-quarter showing in particular.

For the final three months of the year, revenue increased by 18% from $4.6m to $4.89m, while net income improved from a loss of $66,000 to a positive of $483,000. Adjusted EBITDA also hiked 8% year-on-year to $1.58m in Q4.

“Despite spending time analysing strategic alternatives in Q4, we delivered solid revenue growth during the quarter,” Cravens said, “I hope we’ll be able to do more of the same in 2019: delivering table game solutions that serve our casino clients well by attracting and exciting their guests.”

Galaxy’s CFO Harry Hagerty added: “Our balance sheet matured significantly in 2018. Cash on hand increased 76%, adjusted EBITDA increased 30% and total debt (gross) increased 6%. 

“Our ratio of total debt to adjusted EBITDA improved to 1.5x at year-end," he said. "In 2019, I hope we will see opportunities to put our balance sheet to work in the service of growing our business.”