Ainsworth Flags 93% Profit Collapse as North America Sales Dry Up
Ainsworth flags sharp profit drop as North American headwinds bite
Ainsworth Game Technology (ASX: AGI) has issued a trading update for the six months ending 30 June 2026 (H1CY26), flagging a sharp deterioration in earnings relative to the previous corresponding period (PCP). The company expects profit before tax (excluding currency impacts and one-off items) of approximately $1.0 million, down from $13.9 million in the PCP on a similar basis. Total revenue is expected to come in at approximately $116 million, a fall of approximately 24% from $152.1 million in the PCP and below the $138.7 million recorded in H2CY25.
Reduced outright sales and fewer units under gaming operations in North America were the primary contributors to the shortfall, compounded by increased competitive pressures and adverse economic conditions in the region. Management has responded with leadership changes and a stated cost reduction programme, signalling an active reset rather than a passive acknowledgement of the result.
Ryan Comstock, Chief Executive Officer
“The expected results outlined above were impacted by organisational changes which occurred during the latter period of FY25. Following these changes new sales and product strategy leadership have now been appointed within North America to ensure a more targeted approach is established to improve these financial outcomes. Our strategy reflects initiatives implemented, resulting in the improvements in Australian revenues, which is helping to offset ongoing challenging market conditions and competitive pressures across our international markets, while maintaining investment in product development.”
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Breaking down the numbers — what the financials reveal
Revenue and earnings snapshot
The headline figures reflect a broad-based revenue contraction, with earnings declining at a faster rate than revenue. Underlying EBITDA (excluding currency impacts) is expected at approximately $13 million, compared with $26.9 million in the PCP, representing a decline of approximately 52%. Operating cash flow is expected to remain positive at approximately $2 million, though net debt is forecast to rise to approximately $14 million from $11.8 million at 31 December 2025.
The company has confirmed that undrawn debt facilities remain available to support ongoing operations and strategic initiatives, an important consideration for investors assessing near-term liquidity.
| Metric | H1CY26 (Expected) | H1CY25 (PCP) | H2CY25 | Change vs PCP |
|---|---|---|---|---|
| Total Revenue | ~$116m | $152.1m | $138.7m | -~24% |
| Profit Before Tax* | ~$1.0m | $13.9m | — | -~93% |
| Underlying EBITDA* | ~$13m | $26.9m | — | -~52% |
| Operating Cash Flow | ~$2m | — | — | Positive |
| Net Debt | ~$14m | — | $11.8m | Increased |
*Excluding currency impacts and one-off items
Regional performance breakdown
Performance varied materially across AGI’s three operating regions:
- North America: The primary drag on group results. Reduced outright sales and a lower number of units under gaming operations drove the revenue shortfall, with increased competitive factors and adverse economic conditions cited as contributing pressures. New sales and product strategy leadership has now been appointed to address these outcomes.
- APAC: The standout positive story for the period. The region contributed approximately 31% of total revenue, up from 23% in the PCP, with revenue expected to increase approximately 4% on the PCP. The segment result is forecast to improve to 25% from 23%, driven by the release and ongoing installations of the Raptor™ cabinet and subsequent cabinet variations released in early 2026.
- Latin America/Europe: Revenue is expected to be approximately 13% lower than the PCP, though this is offset by improved segment margins, with overall results expected to remain broadly consistent with the PCP.
APAC’s performance, underpinned by the Raptor™ rollout in Australia, demonstrates that AGI’s product strategy can deliver results in receptive markets, even as North America remains under pressure.
Understanding the gaming machine market and why North America matters
Gaming technology companies such as AGI generate revenue through two primary channels. The first is outright sales, where gaming cabinets (the physical machines) are sold permanently to a casino or venue operator in exchange for an upfront payment. The second is gaming operations, a revenue-share or lease arrangement where the machines remain on AGI’s balance sheet and the company receives a portion of the income those machines generate over time.
North America has historically been AGI’s dominant revenue region, which means softer performance there carries a disproportionate impact on group-level results. A simultaneous decline in both outright sales and gaming operations units in that market, as seen in H1CY26, compresses both immediate revenue and the ongoing income stream from deployed machines.
Research and development (R&D) investment is the mechanism through which gaming technology companies protect and grow their market position. New cabinet releases, such as the Raptor™, are the commercial product of this spending. AGI’s R&D expenditure is expected to represent approximately 22% of total revenue in H1CY26, up 7% on the PCP and above the H2CY25 rate of 18.5%. Maintaining elevated R&D spend through a period of revenue contraction indicates a management preference for competitive positioning over short-term cost preservation.
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Management’s response and what comes next
Leadership changes and strategic reset in North America
AGI’s management has attributed a meaningful portion of the H1CY26 result to organisational changes that occurred during the latter period of FY25. In response, new sales and product strategy leadership has been appointed within North America, with the stated aim of establishing a more targeted commercial approach to improve financial outcomes in that region.
The appointment signals that management views the North American underperformance as addressable through operational and structural intervention, not solely as a function of external market conditions.
Ryan Comstock, Chief Executive Officer
“In response to the expected results, we continue to review all areas of the business aimed at reducing the cost base, improving product performance, and achieving market share gains across all geographical regions to positively improve financial performance for the remainder of FY26.”
Key priorities for the remainder of FY26
Management has outlined the following priorities for H2CY26:
- Reducing the cost base across all business areas
- Improving product performance
- Achieving market share gains across all geographical regions
- Progressing product development to remain competitive in North America
- Sustaining APAC revenue momentum through continued Raptor™ cabinet rollout and variations
R&D investment remains a stated priority, with the expected H1CY26 rate of approximately 22% of total revenue running materially above the H2CY25 rate of 18.5%. Investors will be watching whether this spend translates into competitive product gains in North America as the year progresses.
The H1CY26 figures are based on current management forecasts and remain subject to period-end close and audit review procedures. The full H1CY26 result will follow in due course.
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