Ainsworth Game Technology Posts $21.1M Profit Despite $45M Goodwill Hit
Ainsworth delivers underlying profit despite currency headwinds in CY25
Ainsworth Game Technology reported an underlying profit before tax of $21.1 million for the twelve months ended 31 December 2025, representing a 9% decline from the prior corresponding period. The Ainsworth Game Technology CY25 Results (ASX: AGI) were impacted by significant non-cash charges, including a $45.2 million goodwill impairment, $12.0 million in currency translation losses, and $8.3 million in transaction costs related to terminated takeover offers.
Revenue climbed 10% to $290.8 million from $264.1 million, driven by higher product sales across Asia Pacific and the Americas, alongside growing Historical Horse Racing (HHR) connection fees. However, underlying EBITDA remained flat at $48.0 million compared to $48.2 million in CY24, with margins compressing to 16.5% from 18.3% due to product mix pressures in Latin America and the introduction of US tariffs in North America.
The reported loss after tax of ($19.2 million) contrasts sharply with the $30.3 million profit recorded in CY24. Once adjusted for currency movements and one-off items, underlying profit after tax increased to $31.2 million from $21.8 million. Dividends remain suspended to preserve liquidity and fund ongoing product development initiatives.
| Financial Metric (AUD millions) | CY25 | CY24 | Change |
|---|---|---|---|
| Revenue | $290.8m | $264.1m | +10% |
| Underlying EBITDA | $48.0m | $48.2m | Flat |
| Underlying Profit Before Tax | $21.1m | $23.2m | -9% |
| Reported Loss After Tax | ($19.2m) | $30.3m profit | -$49.5m |
| Gaming Operations Units | 6,091 | 6,871 | -780 |
Gaming operations units totalled 6,091 at reporting date, down from 6,871 units at 31 December 2024. Recurring revenue, including HHR connection fees, contributed $97.7 million compared to $95.5 million in the prior period. The balance sheet shifted from a net cash position of $9.7 million at CY24 end to net debt of $11.8 million, primarily due to inventory procurement and transaction costs incurred during the period.
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A-Star Raptor cabinet drives APAC turnaround with 52% revenue growth
Asia Pacific emerged as the standout performer in the Ainsworth Game Technology CY25 Results (ASX: AGI), delivering a 52% revenue surge to $65.0 million following the February 2025 launch of the A-Star Raptor dual screen cabinet. Segment profit jumped to $13.6 million, representing a 21% margin compared to just $2.7 million (6% margin) in CY24, demonstrating significant operational leverage as fixed costs absorbed higher unit volumes.
The region sold 1,914 units during the period, up from 1,406 units, with Australian average selling prices strengthening to $25,600 from $24,700. The A-Star Raptor cabinet launched with three Stand-Alone Progressive families: Year of the Snake, Nugget Hunter, and Eagle Riches. All six initial game titles have consistently performed above house average since rollout, validating the product development strategy.
Key game brands driving APAC performance:
- Year of the Snake (performing above house average nationally)
- Nugget Hunter (over 2,000 copies installed with sustained performance)
- Eagle Riches (contributing to strong cabinet uptake)
The APAC segment demonstrates the earnings leverage inherent in Ainsworth’s business model. Fixed overhead costs are already in place, so incremental sales flow through to profit at high margins. The successful Raptor launch validates management’s focus on product innovation and market-specific cabinet design, with the portfolio strengthened through increased emphasis on Stand-Alone Progressive products.
Management restructured the Australian sales and studio team in early 2025, delivering a robust product roadmap with seven brands and 14 unique titles brought to market on schedule. A portrait screen version of the A-Star Raptor cabinet was introduced in February 2026 to further capitalise on regional demand.
North America maintains scale but faces margin pressure
North America revenue remained broadly flat at $151.3 million on a reported basis, or $147.6 million at constant currency compared to $147.0 million in CY24. Segment profit declined to $65.5 million (43% margin) from $68.2 million (46% margin), driven by lower gross profit margins on product sales and the impact of US tariff introductions during the year.
HHR connection fees now contribute 25% of segment revenue, up from 22% in the prior period, with 11,018 connected units generating recurring revenue (an increase of 2,120 units). This growing connection fee base provides predictable, recurring revenue that partially offsets the decline in participation units, which fell to 2,618 from 3,015.
Participation and lease revenue of $38.5 million contributed 25% of segment revenue, down from $40.0 million (27% of revenue) in CY24. The overall decline was driven by the reduced installed base and lower average fee per day of US$26, down from US$28.
The region sold 2,178 units during the period (up from 2,099), with average selling prices of US$20,300 compared to US$20,800 in the prior period. Demand for the A-Star Raptor portrait cabinet launched in early CY24 remains steady, with a range of titles released to maintain market competitiveness.
Three key product developments for North America:
- Raptor Dual Screen rollout commencing Q1 2026, focusing on high-denomination core brands Eagle Bucks and The Enforcer, plus brand extension with San Fa Fortunes
- New Silver Phoenix game design studio established in Las Vegas to extend development capacity
- Standardised development across Class III, Class II and HHR platforms, with Coin Kingdom and Five Fortunes being the first themes supported across all verticals
Tariff headwinds are real but manageable. The growing HHR connection fee base provides recurring revenue that smooths volatility from one-time equipment sales, demonstrating the strategic value of Ainsworth’s platform expansion in the region.
What are recurring revenues and why do they matter for gaming stocks?
Gaming companies generate revenue from two distinct sources: one-time unit sales and recurring revenue from gaming operations. Recurring revenue streams include participation fees (where operators pay a percentage of gaming revenue), lease payments, and connection fees for platforms like Historical Horse Racing systems.
Recurring revenue provides earnings stability and visibility, smoothing the volatility inherent in lumpy equipment sales cycles. When a gaming company sells a cabinet outright, it receives a one-time payment. However, when that same cabinet is placed under a participation agreement, the company receives a steady stream of payments for the life of the installation, often measured in years.
For Ainsworth, recurring revenue totalled $97.7 million in CY25 (including HHR connection fees), up from $95.5 million in the prior period. This revenue stream contributed approximately 34% of total group revenue, providing a stable base that supports investment in product development and geographic expansion.
Higher-quality earnings streams typically command premium valuations in public markets. Investors value the predictability of recurring revenue because it reduces earnings volatility and provides greater visibility over future cash flows. Companies with significant recurring revenue bases are often viewed as more defensive during economic downturns, as installed gaming operations continue generating fees even when new equipment sales slow.
The quality of recurring revenue varies by contract type. HHR connection fees, where Ainsworth charges operators for each connected unit regardless of gaming performance, represent the highest-quality recurring revenue. Participation agreements tied to gaming performance carry more volatility but typically offer higher margins when games perform well.
Latin America navigates headwinds while Europe gains traction
Latin America revenue increased 4% to $69.3 million despite ongoing Mexican import restrictions that affected regional sales. Segment profit fell to $18.6 million (27% margin) from $27.5 million (41% margin), driven by a higher proportion of A-Star Raptor cabinet sales at lower margins and a 20% mix of reconditioned units compared to 14% in CY24.
The region sold 1,793 units during the period, up from 1,752 units, with average selling prices strengthening to US$19,000 from US$17,700. Gaming operations installed base decreased 10% to 3,473 units from 3,856, predominantly due to conversions to sales in Mexico to mitigate import restrictions and the sale of older cabinets within Argentina.
Demand continues to grow for the A-Star range of cabinets, particularly Xtension Link and San Fa brands. Xtension Link, with over 2,000 units in operation, continues to outperform house average by 1.7x and is consistently listed as a top game in Mexico and Latin America. San Fa series maintains over 800 units above house average across the region.
The first half of the year was marked by headwinds including importation challenges, political uncertainty, and currency volatility. Conditions improved in the second half, particularly in Mexico, while Peru and the Caribbean remained stable, high-potential markets. Argentina showed progressive improvement as macro-economic conditions stabilised.
In Europe, Ainsworth’s strategy remains focused on selective expansion in regulated markets. Strong performance in France and growing momentum in Spain validate the approach of combining localised content, versatile cabinets, and partnerships aligned with each market’s regulatory requirements. Both the Raptor and A-Star cabinets were featured as top performers in 2025 in the Eilers & Krejcik report.
Balance sheet supports product investment despite net debt position
Ainsworth’s balance sheet shifted from a net cash position of $9.7 million at 31 December 2024 to net debt of $11.8 million at 31 December 2025. The movement was driven primarily by inventory procurement in anticipation of higher sales, transaction costs incurred during the period, and working capital timing differences.
Total assets decreased to $419.2 million from $441.7 million, with net assets declining to $328.7 million from $360.6 million. The reduction was driven by goodwill impairment in the current period, as well as decreases in cash, trade receivables, and property, plant and equipment, partially offset by increases in inventories and deferred tax assets.
The company increased its credit facility from US$50 million to US$75 million on 23 June 2025, providing expanded headroom for strategic initiatives. All financial covenants were met during the current period. The debt-to-equity ratio stood at 28% compared to 23% in CY24, while the debt ratio (total liabilities to total assets) increased to 22% from 18%.
Financial Position Summary
The modest net debt position of $11.8 million is manageable relative to the asset base of $419.2 million and the expanded US$75 million credit facility. Dividends remain suspended to maintain available liquidity and continue investment in product developments that position the company for future growth.
Net cash used in operating activities totalled $11.2 million in CY25, reflecting working capital deficiency mainly driven by increased inventory investment and payment of transaction costs. This compares to $3.0 million used in CY24, which included a SAT payment of $28.6 million. Net cash inflow from financing activities was driven by increased net proceeds from borrowings.
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CY26 outlook centres on Raptor Dual Screen rollout and HHR expansion
The Ainsworth Game Technology CY25 Results (ASX: AGI) set the stage for product-led growth in CY26, with the Raptor Dual Screen rollout commencing in North America during the first quarter. Initial deployment focuses on high-denomination brands including Eagle Bucks, The Enforcer, and San Fa Fortunes, targeting premium gaming floors where these titles have established performance records.
The APAC portrait screen version of the Raptor Dual Screen was introduced in February 2026, capitalising on the successful momentum established by the original dual screen cabinet launched in February 2025. Management developed a robust product pipeline during CY25, delivering seven brands and 14 unique titles on schedule, reflecting improved execution and coordination across the organisation.
Three key catalysts for CY26:
- Raptor Dual Screen North America rollout commencing Q1 2026
- HHR connected unit growth with 11,018 units already generating recurring revenue
- APAC portrait cabinet launch in February 2026
Ainsworth released 30 online slot titles in CY25 for US, Canada, and Latin America regulated markets, extending land-based intellectual property into digital channels. The online segment continues to focus on slot brand extension, leveraging established land-based titles such as San Fa, Mustang Money, and Triple Shot to strengthen brand recognition and player familiarity.
Research and development spend remained disciplined at 17% of revenue, supporting the expanded product pipeline. Global headcount increased 6% to 575 employees from 542, predominantly due to higher R&D personnel within Americas studios to support the product pipeline and increased direct labour at the North America production facility.
Management remains focused on cost discipline and cash flow preservation while continuing investment in product development. The product pipeline is loaded for CY26, with investors advised to watch for early read-throughs on Raptor Dual Screen uptake in North America and continued HHR unit growth as leading indicators of commercial momentum.
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