Australian slot machine supplier Ainsworth Game Technology (AGT) reported a 78% year-on-year decline in net profit for the first half of 2026, with earnings falling to AU$1.1 million (US$790,000).
The company attributed the decline to challenging market conditions, weaker consumer sentiment and regulatory changes affecting several regions.
Revenue for the six months ended June 30 dropped 23% to AU$116.5 million (US$83.6 million), while EBITDA declined 30% to AU$10.2 million. Underlying EBITDA decreased 36% to AU$17.1 million.
AGT also recorded a pretax loss of AU$2.2 million, compared with a AU$1.6 million profit in the previous year. A tax benefit of AU$3.3 million allowed the company to report a positive result after tax.
North America Sales Decline
North America remained AGT’s largest market, generating 44% of group revenue, although revenue from the region fell 38% year-on-year to AU$51.9 million.
The company said weaker machine sales and a smaller installed base affected performance. Unit sales dropped from 1,357 to 492, while the installed gaming operations base decreased from 2,961 units to 2,360.
AGT also highlighted regulatory changes as a factor behind the decline, including increased gaming tax in Mexico and the removal of Historical Horse Racing machines in New Hampshire.
Despite lower revenue, the company reported improved segment margins in North America, supported by a tariff refund received under the International Emergency Economic Powers Act and increased recurring revenue.
Chief Executive Ryan Comstock said AGT had focused on controlling costs, reducing debt and improving cash flow while continuing investment in research and development.
“Given the challenging trading conditions, our focus has been on disciplined cost management to enhance margins, reducing debt and improving our operating cash flow whilst also continuing our investment in R&D, and successfully launching new products in key markets,” said Comstock, as reported by Inside Asian Gaming, citing the official report (pdf).
Comstock said limited new product activity in North America had affected results and that the company was addressing the issue through its upcoming product plans.
“A lack of compelling new product offerings in recent times in our largest market – North America – has adversely impacted our performance. We have taken steps to address this and are focussed over the next six months on a product roadmap with a consistent release cadence off the back of the Dragon Legacy.”
Asia-Pacific Delivers Growth
Asia-Pacific was the only region to record year-on-year revenue growth during the period. Revenue increased 7% to AU$36.9 million, supported by the A-STAR Raptor cabinet range.
The region contributed 32% of group revenue, with 1,087 gaming machine sales compared with 1,049 in the previous year.
AGT said the A-STAR Raptor range, including its single-screen version, received a positive response. The company also reported strong early results from Double Dragons and Loot Express, which launched above average casino-floor performance levels and continued to perform above those averages.
“We are encouraged by the strong reception to our new product releases and expansions. Of note has been the release of our A-STAR Raptor range in a single-screen version in the Asia-Pacific market.”
Revenue from Latin America and Europe declined 20% to AU$25.4 million, reflecting weaker sales in key markets and geopolitical pressures. Ainsworth Interactive, the company’s online division, generated AU$2.3 million compared with AU$2.8 million a year earlier.
Focus on Financial Management
AGT’s gross margin improved to 62% from 56%, supported by higher average selling prices and a tariff refund. Net debt decreased to AU$8.5 million from AU$11.8 million at the end of December.
The company also recorded costs linked to a patent dispute with Aristocrat Technologies Australia involving Hold & Spin game features. AGT recognized a AU$2.3 million provision, including legal costs, and later agreed to license Aristocrat’s Australian game play feature patents for AU$8.5 million.
Dividends remain suspended as AGT focuses on maintaining liquidity and funding product development.
The company said future growth will depend on releasing products that meet market demand while maintaining financial discipline.
“Looking ahead our focus remains on driving revenue growth across all our markets by delivering innovative and competitive products for which there is strong demand coupled with disciplined financial management to deliver shareholder value.”