Third Quarter 2022 Highlights:
• Global EGM Sales Eclipsed 1,000 Units for the First Time Since Q4 2019
• Domestic EGM Recurring Revenue Topped $45 Million; Up 4% Y/Y and 8% Ahead of Q3 2019
• Domestic Premium EGM Footprint Increased 18% Sequentially; Eleventh Consecutive Quarterly Increase
• Domestic EGM RPD Exceeded $30 for the Sixth Consecutive Quarter
• Domestic EGM Installed Base Expanded for the Second Straight Quarter; Up by over 300 Units YTD
• Table Products Adjusted EBITDA Reached a Record $2.6 Million
• On Pace to Achieve Year-End 2022 Net Leverage Target of less than 4.0x
LAS VEGAS, NOVEMBER 8, 2022 - PlayAGS, Inc. (NYSE: AGS) ("AGS", "us", "we" or the "Company"), a designer and developer
of equipment and services solutions for the global gaming industry, today reported operating results for the third quarter ended
September 30, 2022.
Commenting upon the Company's third quarter performance, AGS President and Chief Executive Officer David Lopez said, "Our third
quarter financial results further reflect the people, product and process-driven operating momentum building within our business. Given
the encouraging initial customer response to the broader and more diverse new product lineup we recently unveiled at the Global Gaming
Expo ("G2E"), I am even more excited about what lies ahead for our Company and its key stakeholders."
Kimo Akiona, AGS Chief Financial Officer added, "I am extremely pleased with the balance sheet deleveraging progress we have made
year-to-date, as we ended the third quarter with net leverage at 4.0 times. Supported by the stable operating trends we continue to observe
within the business, I remain confident in our ability to deliver on our year-end net leverage target of less than 4.0 times and look forward
to further reducing leverage in the years ahead.”


Third Quarter 2022 Financial Results
• Total revenue increased approximately 16% year-over-year to $78.3 million. Table Products revenue advanced 30% versus the
prior year, reflecting outsized growth within our progressive installed base, growing demand for our PAX S single-deck card
shuffler, further adoption of our AGS Arsenal site license offering, and the Q1 2022 Lucky Lucky side bet acquisition. EGM
revenue increased by more than 15% year-over-year, paced by EGM sales revenue growth of over 50%. Global EGM sales
topped 1,000 units for the first time since Q4 2019, reflecting successful execution of our strategy to broaden our global
customer account penetration, continued recovery in North American replacement unit demand and complementary EGM sales
into international markets. Interactive revenue grew to $2.6 million in Q3 2022 as we continue to benefit from outsized growth
within our Real Money Gaming ("RMG") business. Total revenue improved approximately 2% over the $76.6 million delivered
in Q2 2022, representing our seventh consecutive quarter of sequential total revenue growth.
• Gaming operations, or recurring revenue, increased 6% year-over-year to $56.6 million. Domestic EGM recurring revenue
improved by 4% versus the prior year, topping $45 million for the second consecutive quarter. Our growing premium game
mix, improved core content execution, further implementation of optimization initiatives, and a stable domestic gaming
macroeconomic backdrop boosted our Q3 2022 Domestic EGM recurring revenue performance. International EGM recurring
revenue advanced 16% year-over-year, paced by the consistent macroeconomic recovery underway throughout Mexico. To
that end, International EGM recurring revenue has now increased sequentially for nine consecutive quarters. Table Products
recurring revenue increased by more than 25% year-over-year to a record $3.8 million, supported by growth across all product
verticals. Table Products revenue has also increased sequentially for nine consecutive quarters. In aggregate, recurring revenue
accounted for over 70% of our consolidated Q3 2022 revenue mix.
• We generated $476 thousand of net income in Q3 2022 compared to a net loss of $1.8 million in the prior year period. The
year-over-year increase in our reported net income was predominantly driven by our strong year-over-year revenue growth,
which contributed to Q3 2022 operating income of $9.0 million compared to $7.0 million in Q3 2021. Q3 2022 marked the
second consecutive quarter in which we were able to generate positive net income.
• Total Adjusted EBITDA (non-GAAP)(1) increased 8% year-over-year to $34.5 million compared to $31.9 million in Q3 2021.
Year-over-year Adjusted EBITDA growth within the Table Products and EGM segments of approximately 57% and 6%,
respectively, was partially offset by a decline within the Interactive segment, as we continued to incur modest incremental
expense in order to accelerate the flow of new AGS game content into the North American RMG channel over the coming
quarters. Adjusted EBITDA increased modestly on a quarterly sequential basis relative to the $34.1 million delivered in
Q2 2022.
• Total Adjusted EBITDA margin (non-GAAP)(1) was 44.0% compared to 47.4% in Q3 2021. The year-over-year change in our
Adjusted EBITDA margin was predominantly driven by a greater mix of EGM unit sales revenue, which carries a lower gross
margin as compared to EGM gaming operations revenue, further post-COVID normalization in our discretionary business
operating expenses and market-level inflationary cost fluctuations. Total Adjusted EBITDA margin compressed modestly
versus the 44.6% achieved in Q2 2022, largely a function of unfavorable changes in revenue and product mix.
(1) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures, see non-GAAP reconciliation below.
(2) Basis points ("bps")