Why Ainsworth’s Revenue Soared 25% but Profits Took a Hit in H1 2025
Ainsworth Game Technology reported a 25% revenue increase for the first half of 2025, yet underlying profits slipped due to margin pressures from tariffs and product mix shifts. The launch of the A-Star Raptor dual screen cabinet bolstered Asia Pacific sales, while challenges persist in Latin America and online segments.
- 25.3% revenue growth driven by North America and Asia Pacific
- 3% decline in underlying profit before tax due to margin compression
- EBITDA flat at $26.9 million with margins down from 22% to 17.7%
- Net cash position fell sharply to $1.4 million amid inventory build and tariffs
- Interim dividends suspended to preserve liquidity amid geopolitical uncertainty
Strong Revenue Growth Amid Challenging Conditions
Ainsworth Game Technology Ltd (ASX – AGI) unveiled its half-year results for the six months ended 30 June 2025, showcasing a robust 25.3% increase in revenue to $152.1 million compared to the prior corresponding period. This growth was primarily fueled by solid sales in North America and a successful launch of the A-Star Raptor dual screen cabinet in the Asia Pacific region. However, despite the top-line momentum, underlying profit before tax edged down 3% to $13.9 million, reflecting significant margin pressures.
The company’s EBITDA remained broadly flat at $26.9 million, but margins compressed notably from 22% to 17.7%. This margin squeeze was attributed to a less favorable product mix, higher costs of goods sold including inventory write-downs on older cabinet models, and the impact of new US tariffs. Currency translation losses further weighed on profitability, with an $8.7 million hit compared to gains in prior periods.
Regional Performance Highlights
North America continued to be a key revenue driver, with steady demand for the A-Star Raptor cabinet and growth in recurring revenue from Historical Horse Racing (HHR) connection fees. The installed base of connected HHR units increased by nearly 1,600 since December 2024, underpinning recurring revenue streams. Yet, geopolitical tensions and tariff introductions are expected to keep margin pressures elevated through the remainder of the year.
In Latin America and Europe, revenue grew modestly but gross profit declined due to a higher proportion of lower-margin reconditioned units and ongoing import restrictions in Mexico. The company holds an 8% share of the Class 3 market in this region but faces a highly competitive pricing environment and cautious economic conditions, particularly in Argentina.
Asia Pacific delivered a standout performance, with revenue nearly doubling compared to the prior corresponding period. The launch of the A-Star Raptor dual screen cabinet in February 2025 was well received, supported by a portfolio of new game titles that have consistently outperformed house averages. However, regulatory reviews in Australia and New Zealand pose ongoing challenges for product approvals and market entry.
Online Segment and Financial Position
The online gaming segment continued to underperform, impacted by competitive market conditions and the termination of a key contract in March 2024. The company is focusing on accelerating game development and expanding digital distribution channels, including partnerships with major operators such as DraftKings, Caesars, and FanDuel, aiming to rebuild momentum in this space.
On the balance sheet front, Ainsworth’s net cash position declined sharply to $1.4 million from $9.7 million at the end of 2024, driven by increased inventory procurement and tariff-related costs. To bolster liquidity, the company renegotiated its credit facility, increasing the limit from US$50 million to US$75 million. Reflecting cautious market conditions and geopolitical uncertainties, interim dividends remain suspended.
Strategic Outlook
Ainsworth continues to invest in research and development to adapt to evolving gaming regulations, technological shifts, and changing player preferences. The company’s focus on delivering superior game performance and expanding recurring revenue streams remains central to maintaining and growing market share. However, ongoing tariff pressures and geopolitical risks underscore a cautious outlook for margins and cash flow in the near term.
Bottom Line?
Ainsworth’s revenue momentum is clear, but tariff headwinds and market challenges signal a cautious road ahead for profitability and cash flow.
Questions in the middle?
- How will ongoing US tariffs and geopolitical tensions affect Ainsworth’s margins in H2 2025?
- Can the online gaming segment recover and contribute meaningfully to revenue growth?
- What impact will regulatory changes in Australia and New Zealand have on product launches?
