Independent table games provider Galaxy Gaming has cited its internet-based operations as one of the main drivers behind a 23% year-on-year increase to record revenue during the first quarter of the year.
Revenue for the three months through to March 31, 2019 amounted to $5.3m (£4.1m/€4.7m), up from $4.4m in the same period last year. This was the first time Galaxy surpassed $5m in revenue in the first quarter.
Galaxy put this increase primarily down to higher revenue from three areas of the business: its internet-based gaming activities, premium games and the Bonus Jackpot System due to additional game placements.
The majority of revenue was generated within North America and the Caribbean, with this total up from $3.5m in Q1 of 2018 to $3.8m this year, while there was significant growth in Europe, with revenue jumping from $857,885 to $1.5m.
Galaxy also noted an increase in costs and expenses for Q1, with this amount up from $3.4m to $4.6m. This was primarily due to a $955,800 year-on-year rise in selling, general and administrative expenses, with this figure up from $2.6m to $3.5m.
The provider said this was a result of higher costs associated with the strategic alternatives review for the quarter, as well as higher compensation and related expense due to higher revenue and continued investment in personnel.
Research and development expenses were also up from $193,402 to $299,180, while stock-based compensation costs climbed from $166,478 to $223,604.
Although adjusted earnings before interest, tax, deprecation and amortisation (EBITDA) increased 30% year-on-year to $2.0m, higher costs in Q1 hit net income, with this slipping from $536,708 to $460,664.
Income before provision for income taxes also fell from $681,577 to $561,678.
Todd Cravens, president and CEO of Galaxy, praised the provider’s performance in the three-month period, citing growth across all continuing product segments and “very strong increases” in its progressives and in our igaming business
“We hope that this momentum will continue in 2019 as we move forward in seeking licenses to sell in jurisdictions where we have not previously been able to do so,” he said.
CFO Harry Hagerty added: “Q1 showed a continuation of recent trends: year-over-year increases in revenue and adjusted EBITDA, an increase in cash and a decrease in debt.
“We were very comfortably in compliance with the financial covenants in our bank credit agreement. Our balance sheet will change significantly as a result of the share redemption we completed in May 2019, but we believe the company has several options to help it manage the significant increase in leverage.”