Margin Gains Offset Revenue Drop
Ainsworth Reports 23% Revenue Drop Despite Margin Improvements And Cost Discipline
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Key Points
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Ainsworth disclosed a licensing agreement with Aristocrat Leisure Ltd to pay AU$8.5 million over three and a half years, plus a one-off AU$2.3 million provision related to a patent claim.
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In North America, revenue was US$51.9 million (about 44% of total), with 10,737 HHR connections and 2,360 machines under participation/lease; HHR connection fees represented 36% of segment revenue.
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The reported results include non-operating items: foreign currency losses of A$3.5 million, transaction costs of A$1.1 million related to a terminated scheme and takeovers, and a patent provision of A$2.3 million, which help explain why underlying PBT was A$4.7 million despite a pretax loss of A$2.2 million.
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International revenues accounted for about 70% of total revenue, with recurring revenues including HHR connection fees totaling about A$43.3 million.
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Over the past year, AGI’s shares have risen roughly 11%, signaling positive investor sentiment amid a tougher market backdrop.
Ainsworth Game Technology reported H1 FY26 revenue of A$116.5 million, down 23% from the prior year, but the company managed to improve margins and narrow losses. Statutory profit after tax hit A$1.1 million despite weaker consumer demand and regulatory headwinds in North America, where the removal of Historical Horse Racing in New Hampshire dented results Gaming Intelligence.
Underlying EBITDA reached A$17.1 million with a 15% margin, while operating cash flow turned positive at A$8.9 million and net debt shrank to A$8.5 million. The company is pushing new gaming cabinets like Dragon Legacy and A-STAR Raptor to reignite growth across its markets Intergame Online.
Margins Improve Despite Revenue Slump
Gross margin expanded to 62%, buoyed by a tariff refund and higher average selling prices in Asia Pacific and North America. Underlying profit before tax was A$4.7 million, but reported pretax loss of A$2.2 million reflects one-off costs including a A$3.5 million foreign currency loss, A$1.1 million in transaction costs, and a A$2.3 million patent provision Market Screener.
North America Revenue Falls on HHR Pullback
North America revenue dropped to US$51.9 million, about 44% of total sales, with weaker machine sales and the removal of Historical Horse Racing in New Hampshire hitting hard. The region had 10,737 HHR connections and 2,360 machines under participation or lease, with HHR connection fees representing 36% of segment revenue Gaming Intelligence.
Higher Mexican gaming taxes added pressure to the North American division. Ainsworth also signed a licensing deal with Aristocrat Leisure to pay A$8.5 million over three and a half years, further weighing on near-term earnings Market Screener.
International Push Offsets North American Weakness
International revenues accounted for about 70% of total sales, with recurring revenues including HHR connection fees totaling A$43.3 million. This steady revenue base helped offset the decline in machine sales and provided cash to fund new product development Intergame Online.
New Cabinets and AI Strategy Aim for Turnaround
Management is banking on new gaming cabinets like Dragon Legacy and A-STAR Raptor to drive growth. The company is also expanding its use of artificial intelligence and continuing heavy R&D investment across all markets Gaming Intelligence.
Investor confidence has held steady, with Ainsworth's shares rising roughly 11% over the past year despite the tougher market backdrop. The positive cash flow and narrowing debt position suggest the company has room to invest in new products while managing near-term headwinds Market Screener.
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