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Revenue: $116.5 million, down 23% on the prior corresponding period.
Underlying Profit Before Tax: $4.7 million, down from $13.9 million in the prior corresponding period.
Reported Profit After Tax: $1.1 million, with a $3.3 million income tax benefit.
Reported EBITDA: $10.2 million, compared with $14.6 million in the prior corresponding period.
Underlying EBITDA: $17.1 million, down from $26.9 million, with an underlying EBITDA margin of 14.7% (compressed from 17.7%).
Gross Margin: Expanded 6 points to 62%, driven by a tariff refund and higher average selling prices.
Operating Cash Flow: Turned positive at $8.9 million, against an outflow in the prior period.
Net Debt: Reduced to $8.5 million from $11.8 million at 31 December 2025.
Gaming Operations Units: Totaled 5,644 units at period end, down from 6,091 units at 31 December 2025.
Recurring Revenue: Contributed $43.3 million, compared with $50.7 million in the prior corresponding period.
North America Segment Revenue: $51.9 million, down $31.2 million on the prior comparable period, with unit volume falling to 492 from 1,357.
Asia Pacific Segment Revenue: Grew to $36.9 million from $34.6 million, with unit volume growing to 1,087 units.
Latin America and Europe Segment Revenue: $25.4 million, down 20% on the prior corresponding period.
Interactive Segment Revenue: $2.3 million, down from $2.8 million in the prior corresponding period.
R&D Spend: Increased $1.6 million to $25.8 million, representing 22% of revenue (up from 16%).
Total Operating Costs: Fell $2.7 million on the prior corresponding period to $68.7 million.
Diluted Earnings Per Share: $0.003, against $0.014 in the prior corresponding period.
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For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Gross margin expanded 6 points to 62%, driven by a tariff refund and higher average selling prices.
Operating cash flow turned positive at $8.9 million, a $13.6 million year-on-year improvement, and net debt reduced to $8.5 million.
Asia Pacific segment grew revenue, units, and profit, with the Raptor platform driving momentum and the A865 cabinet performing well.
Dragon Legacy family achieved #1 and #2 positions on the Eilers report for new core video games, indicating a strong product turnaround in North America.
Recurring revenue streams, including HHR connection fees, remain stable with over 10,000 units connected, providing a resilient base.
Group revenue fell 23% to $116.5 million, with underlying profit before tax down to $4.7 million from $13.9 million.
North American unit sales dropped sharply to 492 from 1,357, due to an inconsistent product roadmap that eroded operator confidence.
Latin America revenue declined 20%, impacted by a Mexican gaming tax increase from 30% to 50%, reducing operator capital.
Dividends remain suspended to preserve liquidity and fund product development, reflecting a cautious capital allocation approach.
Interactive segment revenue fell to $2.3 million and has not yet delivered, with competitive pressures and game performance issues persisting.
Q: What were the key drivers behind the significant decline in North American revenue and unit sales during the half? A: Ryan Comstock (CEO) candidly attributed the decline to a product problem, stating the single-screen road map in North America went too long without a compelling new release, eroding operator confidence. While trading conditions were challenging, the core issue was an inconsistent product cadence. However, he highlighted that segment profit margin improved to 54% from 43%, driven by a tariff refund and higher average selling prices, and that the newly launched Dragon Legacy family took the #1 and #2 positions on the June 2026 Eilers report for new core video, providing independent third-party evidence that the product cycle has turned.
Q: Can you elaborate on the strategic importance of the new A865 cabinet and its Hybrid Technology? A: Ryan Comstock (CEO) explained that the A865 introduces Ainsworth's patent-pending Hybrid Technology, allowing both portrait and dual-screen game content to run on the same cabinet platform. This gives the A865 access to the full Raptor portrait and dual-screen libraries. For operators, this means a lower risk profile, as they can convert between content formats without a hardware change, extending the cabinet's useful life and broadening the content library available to any single unit. The A865 launched in Australia in the first half, with rollouts into Latin America and North America planned for the second half.
Q: How is the company leveraging AI, and what tangible commercial output has it produced? A: Ryan Comstock (CEO) detailed that AI adoption is enterprise-wide and governed by a cross-functional executive AI steering committee. 100% of developers are enabled with Agentic AI coding tools, and art, animation, and video teams run generative pipelines. He emphasized this is about capacity and velocity, not headcount reduction. As tangible proof, he cited 'Just Chillin'', a game developed using the latest AI tools, which has been shortlisted for Product Innovation of the Year at the 2026 Global Gaming Awards.
Q: What is the company's strategy for the North American market in the second half of 2026? A: Ryan Comstock (CEO) outlined a four-part plan: 1) Rebuild operator trust through consistent cadence with new titles on the A849 single-screen cabinet in Q3 and Q4; 2) Launch a Raptor test bank program at partner properties to refine go-to-market strategies; 3) Penetrate the A832 dual-screen further with new titles targeting the low-denomination segment; and 4) Leverage proven content from other regions, such as Latin America and Asia Pacific, that has not yet been brought to North America. He also noted that Dragon Legacy is expected to reach Class 2 and HHR market availability in September 2026, extending best-performing content into segments representing about 61% of North American revenue.
Q: Why has the Board decided to keep dividends suspended, and what is the company's capital allocation priority? A: Lynn Mah (CFO) stated that the dividend suspension is a capital allocation choice, not a liquidity constraint. The company generated positive operating cash flow and met all financial covenants. The Board's view is that in the current phase of the product cycle, the highest return on each dollar is in the development pipeline, so they are prioritizing debt reduction and funding product development over distributions until the product cycle has turned into revenue.
Q: Can you provide more detail on the performance and strategy within the Latin America and Europe segment? A: Ryan Comstock (CEO) reported that revenue was down 20% on the PCP due to geopolitical events and the increase in Mexican gaming tax from 30% to 50%, which reduced capital available to operators. Despite this, segment profit margin improved to 26% from 23%, helped by lower price point cabinets which carry higher percentage margins. The company reduced gaming operations units to 3,284 in direct response to the tax increase but delivered an 8% increase in average fee per day, effectively shrinking the fleet and improving its quality. They are preparing to launch the value-focused A832L cabinet into price-sensitive markets and have signed a Playboy licensing agreement to strengthen the premium content road map.
Q: What is the current state of the balance sheet and cash flow, given the weaker revenue? A: Lynn Mah (CFO) highlighted that the balance sheet has strengthened. Net debt reduced to $8.5 million from $11.8 million at 31 December 2025. The debt ratio improved to 18% from 22%, and the cash flow to debt ratio moved to a positive 12% from negative 7%. Net cash generated from operating activities was positive $8.9 million against an outflow of $4.7 million in the PCP, a $13.6 million year-on-year improvement. The Western Alliance Bank facility of $27 million remains in place, and all financial covenants were met.
Q: How is the company managing its cost base and R&D investment during this period of lower revenue? A: Lynn Mah (CFO) explained that total operating costs fell $2.7 million on the PCP to $68.7 million, with cost of goods sold falling $23.5 million tracking lower unit volumes. However, R&D increased $1.6 million to $25.8 million, driven by higher evaluation and testing costs. She emphasized that this increase is deliberate, as the company has consciously not cut development spend into a soft revenue half because the product pipeline is the recovery mechanism. R&D now represents 22% of revenue, up from 16%.
Q: What is the outlook for the Asia Pacific segment, which showed growth during the half? A: Ryan Comstock (CEO) stated that Asia Pacific grew revenue to $36.9 million from $34.6 million, with unit volume growing to 1,087 units and segment profit growing to $9.3 million with margins improving to 25% from 23%. Growth came primarily from Australia on the momentum of the A-Star dual-screen cabinet and the successful release of the single-screen cabinet. The A865 launched in the first half with sustaining early performance, and the Raptor portfolio expanded with Double Dragons and Loot Express, both launching at more than twice floor average. He expects continued momentum in the second half with a full content pipeline.
Q: Can you explain the performance of the Interactive segment and the strategy for its recovery? A: Ryan Comstock (CEO) was straightforward that
For the complete transcript of the earnings call, please refer to the full earnings call transcript.