Galaxy reveals losses despite revenue jump in Q2

Galaxy Gaming has reported pre-tax and net losses for the three months to June 30, despite having achieved a 19% year-on-year increase in revenue.

Revenue in the second quarter amounted to $3.7m (€3.1m), compared to the restated amount of $3.1m in the corresponding period last year.

However, adjusted earnings before interest, tax, depreciation and amortisation fell 15% from a restated amount of $1.3m in Q2 of 2016 to $1.1m.

Galaxy also reported a pre-tax loss of $93,000, compared to a pre-tax income of $846,000 in Q2 of last year, while net loss amounted to $80,000, after the same period last year heralded net income of $536,000.

Todd Cravens, who recently took over as chief executive at Galaxy, said: “Our year-over-year revenue growth of 19.4% was very strong.

“Consistent with statements made in our Q1 2017 earnings press release, near-term investments in our sales, marketing and compliance resources are negatively affecting affect our profits.

“However, we continue to believe that those investments are necessary to position us for sustained growth over the long-term.”

As previously reported, Galaxy in April detailed on Form 8-K that its financial statements for 2015 and for three quarters of 2016 would be restated due to two issues.

The first issue pertained to the amortisation of original issue discount related to the Prime Table Games’ (PTG) promissory note, which had not previously been deducted on the company’s income tax returns in any period since the note was issued in October 2011.

The second issue also related to the PTG note, as the related foreign currency transaction gains and losses were incorrectly reported as other comprehensive income, rather than earnings.

Related article: Galaxy Gaming names Cravens as new chief executive