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Galaxy Gaming Reports Q4 and FY 2023 Financial Results

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LAS VEGAS, March 25, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTCQB: GLXZ), a developer and distributor of casino table games and enhanced systems for land-based casinos and iGaming content, announced today its financial results for the quarter and year ended December 31, 2023.

Financial Highlights

Q4 2023 vs. Q4 2022

  • Revenue (gross) increased 25% to $8,382K
  • Revenue (net) increased 13% to $6,737K
  • Net loss of $(820)K vs. net income of $55K
  • Adjusted EBITDA decreased 10% to $2,828K
    • Increased 10% when adjusting Q4 22 for ERTC1

Fiscal Year 2023 vs. Fiscal Year 2022

  • Revenue (gross) increased 23% to $31,729K
  • Revenue (net) increased 19% to $27,789K
  • Net loss of $(1,808)K vs. net loss of $(1,773)K
  • Adjusted EBITDA increased 1% to $10,635K
    • Increased 7% when adjusting FY 22 for ERTC2

Balance Sheet Changes (vs. December 31, 2022)

  • Cash decreased 9% to $16,692K
  • Total long-term debt3 (gross) decreased to $58,431K from $59,740K
  • Stockholders’ deficit increased to $(18,243)K from $(17,885)K

________________________
1 Q4 2022 benefitted from $575k of Employee Retention Tax Credits. Excluding such credits, Adjusted EBITDA increased 10% in Q4 2023.
2 FY 2022 benefitted from $575k of Employer Retention Tax Credits. Excluding such credits, Adjusted EBITDA increased 7% in FY 2023
3 Includes current portion.


Executive Comments

“Q4 of 2023 marked a substantial improvement in operating results as compared to the previous quarter,” said Matt Reback, President and CEO. “We saw gross revenue increases of 25% and 23% in the quarter and the year, respectively, and our gross revenue in Q4 of 2023 was a record at $8.4 million.   We believe that the opportunistic sales of perpetual licenses peaked in 2023, and that we will return to a sustainable growth model relying principally on recurring revenue generated from our robust library of core and premium felt products, our emerging line of GOS products, and our iGaming business in 2024.

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“We had a full quarter of license revenue from EZ Baccarat® in the fourth quarter. However, we were not able to complete the entire installation backlog of our EZ Baccarat Trend Displays, on which we pay no royalties, until February of 2024. We expect these displays will help grow revenue on both a gross and net basis in 2024.

“I am now 4 ½ months into my tenure at Galaxy, and I am very excited about the prospects for the Company. The addition of Michael Ratner as our EVP of Product will help us execute more crisply on product innovation, new product development, and efficient product release. Over the intermediate term, we will develop a strategic plan that will allow us to continue to deliver double-digit revenue growth rates through a combination of organic growth and potential tuck-in acquisitions,” concluded Reback.

With the addition of EZ Baccarat, revenues in our Core vertical now have a contra-revenue component as our Digital vertical has had,” stated Harry Hagerty, Galaxy’s CFO. “To provide additional information to our investors, we will now be disclosing revenue on a gross and net basis in both verticals, and we will also break out sales of perpetual licenses when they occur.

“We incurred some higher-than-planned shipping expenses in Q4 as we expedited the installation of EZ Baccarat displays. Intellectual property registration expenses also continued to be higher than historical levels as we expand the reach of our products into global markets. In our online business, we continue to see double-digit increase in demand for our games (as measured by the gaming revenue they generate). However, the growth in our gross revenue was affected during the back half of 2023 as a result of the renegotiation of royalty rates with Evolution in exchange for a long-term extension of our agreement with them. We reduced the level of our bad debt reserve as we made collection progress on some slow-moving accounts in the quarter. Finally, we have added back all of the expenses related to the Q4 CEO transition in calculating Adjusted EBITDA.

“Our cash position increased to $16.7 million at the end of Q4 as compared to $15.9 million at the end of Q3. However, both figures were below the balance at the end of 2022 as a result of higher-than-normal capital expenditures for our EZ Baccarat displays and $1.2 million of principal payments on our Fortress debt,” Hagerty continued. “Our loan from Fortress Credit Corp. requires our net leverage not to exceed 6.0x at any of the quarter-ends in 2023, and at the end of Q4 we were at 3.7x, comfortably in compliance.   The net leverage covenant steps down to 5.0x in 2024. It remains our intention to reduce our net leverage and to pursue refinancing opportunities.

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We are offering the following guidance for fiscal 2024 with comparison to 2023. This guidance assumes no impact to our business from the wars in Ukraine and the Middle East, and no economic recession or pandemic and is a Forward-Looking statement subject to our safe harbor language below. Finally, the forecast is based on currency exchange rates that we experienced in the fourth quarter.”

(mm) 2023 Actual   2024 Range
  Midpoint Change
Recurring License Revenue $ 28.0     $34.0 – $35.0     23.2 %
Sale of Perpetual Licenses   3.7     1.0 – 1.5     (66.2 )%
Gross Revenue $ 31.7     $35.0 – $36.5     12.8 %
Royalties Netted against Gross Revenue   (3.9 )   (6.0 – 6.5)     60.3 %
Net Revenue $ 27.8     $29.0 – $30.0     2.4 %
             
Adjusted EBITDA4 $ 10.6     $12.0 – $13.0     17.9 %

The company will update its investor deck to reflect the results in this quarter. Investors are encouraged to send questions to management at [email protected] by Friday, April 5, 2024. Management will post their answers to investors on or before April 12, 2024.

________________________
4 It is not possible to provide a reconciliation of Adjusted EBITDA to Net Income without undue burden, as certain factors such as interest rates and tax rates are not knowable.


Forward-Looking Statements

This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections.  All forward-looking statements are based on current expectations and projections of future events.

These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements or installations in land based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, including changes in gaming related and non-gaming related statutes and regulations that affect the revenues of our customers in land-based casino and, online casino markets, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 or other pandemics including without limitation, government imposed shut downs, travel restrictions and supply chain interruptions, unfavorable economic conditions in the US and worldwide, our level of indebtedness, restrictions and covenants in our loan agreement, dependence on major customers, protection of intellectual property and our ability to license the intellectual property rights of third parties, failure to maintain the integrity of our information technology systems, including without limitation, cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business, and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this report. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

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Actual results could differ materially from those expressed or implied in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties. You should not assume at any point in the future that the forward-looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.

About Galaxy Gaming

Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative proprietary table games, state-of-the-art electronic wagering platforms and enhanced bonusing systems to land-based, riverboat, and cruise ship and casinos worldwide. In addition, through its wholly owned subsidiary, Progressive Games Partners LLC, Galaxy licenses proprietary table games content to the online gaming industry. Connect with Galaxy on Facebook, YouTube   and Twitter.

Non-GAAP Financial Information

Adjusted EBITDA includes adjustments to net loss/income to exclude interest, taxes, depreciation, amortization, share based compensation, gain/loss on extinguishment of debt, foreign currency exchange gains/losses, change in estimated fair value of interest rate swap liability and severance and other expenses related to litigation. Adjusted EBITDA is not a measure of performance defined in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). However, Adjusted EBITDA is used by management to evaluate our operating performance. Management believes that disclosure of Adjusted EBITDA allows investors, regulators, and other stakeholders to view our operations in the way management does.   Adjusted EBITDA should not be considered as an alternative to net income or to net cash provided by operating activities as a measure of operating results or of liquidity. Finally, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

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Contact:

Media: Phylicia Middleton (702) 936-5216
Investors: Harry Hagerty (702) 938-1740

 
Exhibit 1

Disaggregation of Revenue

 
(mm) Q4 23 Q4 22 FY 23 FY 22
Consolidated        
Recurring License Revenue $ 8.0   $ 6.9   $ 28.0   $ 25.6  
Sale of Perpetual Licenses   0.4     0.2     3.7     0.3  
Gross Revenue $ 8.4   $ 7.1   $ 31.7   $ 25.9  
Royalties Netted against Gross Revenue   (1.7 )   (0.8 )   (3.9 )   (2.5 )
Net Revenue $ 6.7   $ 6.3   $ 27.8   $ 23.4  
         
GG Core        
Recurring License Revenue $ 5.0   $ 3.7   $ 16.6   $ 15.1  
Sale of Perpetual Licenses   0.4     0.2     3.7     0.3  
Gross Revenue $ 5.4   $ 3.9   $ 20.3   $ 15.4  
Royalties Netted against Gross Revenue   (0.8 )       (0.9 )    
Net Revenue $ 4.6   $ 3.9   $ 19.4   $ 15.4  
         
GG Digital        
Recurring License Revenue $ 3.0   $ 3.2   $ 11.4   $ 10.5  
Royalties Netted against Gross Revenue   (0.9 )   (0.8 )   (3.0 )   (2.5 )
Net Revenue $ 2.1   $ 2.4   $ 8.4   $ 8.0  

 
Exhibit 2
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Reconciliation of Net Income to Adjusted EBITDA

 
    Year Ended December 31,
Adjusted EBITDA Reconciliation:     2023       2022  
Net loss   $ (1,807,586 )   $ (1,773,189 )
Interest expense     9,063,112       7,411,224  
Interest income     (611,271 )     (71,223 )
Provision for income taxes     79,228       208,887  
Depreciation and amortization     2,274,461       2,761,359  
EBITDA     8,997,944       8,537,058  
Share-based compensation (1)     1,021,953       1,278,068  
Realized and unrealized foreign currency exchange (gain)/loss (2)     6,099       290,394  
Severance expense (3)     474,798       28,477  
CEO transition expenses (4)     128,106        
Special project expense (benefit) – Triangulum (5)           (86,959 )
Special project expense – Other (6)     5,969       487,446  
Adjusted EBITDA   $ 10,634,869     $ 10,534,484  

    Three Months Ended December 31,
Adjusted EBITDA Reconciliation:     2023       2022  
Net loss   $ (819,891 )   $ 55,104  
Interest expense     2,315,557       2,129,902  
Interest income     (185,037 )     (48,057 )
Provision for income taxes     15,334       310,828  
Depreciation and amortization     635,357       571,570  
EBITDA     1,961,320       3,019,347  
Share-based compensation (1)     305,925       323,518  
Realized and unrealized foreign currency exchange (gain)/loss (2)     (15,979 )     (199,647 )
Severance expense (3)     448,589        
CEO transition expenses (4)     128,106        
Special project expense (benefit) – Triangulum (5)            
Special project expense – Other (6)           9,287  
Adjusted EBITDA   $ 2,827,961     $ 3,152,505  

(1) Represents non-cash expenses for stock option and restricted stock vesting of directors, officers, employees, and consultants.
(2) Represents realized and unrealized gains and losses due to fluctuations in foreign currency rates.
(3) Includes $440,000 in severance expense relating to the termination of Todd Cravens, who was the President and Chief Executive Officer (“CEO”). Remainder relates to severance expense for two employees.
(4) Represents recruitment fee of $100,000 for new CEO hire and $28,106 in moving expenses incurred by new CEO, Matt Reback and reimbursed by the Company.
(5) Represents payment made to the Company on a policy claim relating to the Triangulum Litigation in 2021.
(6) Represents legal fees paid in relation to miscellaneous shareholder matters.

Other OTC:GLXZ

Galaxy Gaming Appoints Steve Kopjo as Chief Financial Officer

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LAS VEGAS, May 23, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTC: GLXZ), the world’s largest independent developer and distributor of casino table games and technology, announces the appointment of Steve Kopjo as the company’s new Chief Financial Officer. Amid an impressive career in the gaming industry, Kopjo joins Galaxy Gaming on May 28th, bringing extensive experience from senior finance and accounting positions held at various publicly traded gaming companies. With a proven track record of success, Kopjo is set to assume a pivotal role on the Executive leadership team, steering Galaxy Gaming through its next phase of growth and evolution.

With over 15 years of experience in the gaming industry, Kopjo began his career at Ernst & Young as an auditor for casino operators, acquiring his CPA license. Kopjo developed an eclectic skillset in Technical Accounting, Investor Relations, Corporate Finance, and Mergers & Acquisitions through a series of roles with both operators and suppliers, including SHLF entertainment, Wynn Resorts, Play AGS, and most recently as Vice President of Finance at Everi Holdings. Kopjo was a key member of the Play AGS team that led the company’s successful IPO in 2018. At Everi Holdings since 2021, he managed debt restructuring, investor relations, FP&A, and board of director communications, and played a pivotal role in several successful mergers and acquisitions.

The appointment of Kopjo represents a significant move for Galaxy Gaming, as the Company looks to maintain its recent momentum while transitioning long-serving CFO, Harry Hagerty, to a Strategic Advisor role, from which he will continue to serve the company as a resource and contributor on strategic initiatives. Galaxy has been fortunate to have had Hagerty in the CFO role for the past seven years, during which he helped the company grow while negotiating the redemption of the founder and helping to weather the COVID-19 pandemic.

“We are thrilled to welcome Steve as the latest casino gaming expert to join our talented and ambitious Galaxy Gaming team. His experience, leadership, work ethic, and contagious energy will without a doubt contribute to our continued growth and success,” said Matt Reback, President and CEO at Galaxy Gaming. “While it is never easy to replace someone like Harry Hagerty, we are proud of how we have supported his transition from a full-time C-suite role and continue to leverage his valuable experience as a strategic advisor.”

Reback added, “I’ve known Steve for years as a versatile finance professional with a history of navigating complex financial landscapes, executing successful merger and acquisition transactions, optimizing resource allocation through financial, planning and analysis, cultivating strong investor relationships, and ensuring precision in technical accounting. His skills and personality are a strong fit for Galaxy Gaming.”

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Kopjo expressed his enthusiasm about joining Galaxy Gaming, stating, “I was honored to be considered and ultimately selected for this role by Galaxy Gaming. I am excited to join a company with such a respected board of directors, talented leadership team, and robust business foundation. I have watched Galaxy Gaming from afar and always believed it was poised for continued growth, further solidifying its leading position in the gaming industry. I can’t wait to join the team and support the commitment to strategic product innovation. I look forward to bringing my experience to bear as we explore ways to maximize shareholder value, ensuring Galaxy Gaming remains at the forefront of industry excellence.”

About Galaxy Gaming
Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative games, bonusing systems, and technology solutions to physical and online casinos worldwide. Galaxy Gaming offers games that are proven to perform developed by gaming experts and backed by the highest level of customer support. Galaxy Gaming Digital is the world’s leading licensor of proprietary table games to the online gaming industry. Connect with Galaxy Gaming on Facebook, YouTube, Instagram, and X.  

This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. All forward-looking statements are based on current expectations and projections of future events. These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements, or installations in land-based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, changes in gaming related and non-gaming related statutes and regulations and/or self-imposed restrictions imposed on and by our customers that affect their revenues in land-based casino and online casino markets, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 or other pandemics including without limitation, government imposed shut downs, travel restrictions and supply chain interruptions, and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events, or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this press release. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise. 

Contact:

Media:
Phylicia Middleton (702) 938-1753
Investors:        
Matt Reback (702) 337-5229

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Galaxy Gaming Reports Q1 2024 Financial Results

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LAS VEGAS, May 13, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTCQB: GLXZ), a developer and distributor of casino table games and enhanced systems for land-based casinos and iGaming content, announced today its financial results for the quarter ended March 31, 2024.

Financial Highlights

Q1 2024 vs. Q1 2023

  • Revenue (net) increased 8% to $8,001K, a record
    • Revenue (gross) increased 18% to $9,660K, a record
  • Net income increased 89% to $209K
  • EBITDA increased 7% to $3,009K
    • Adjusted EBITDA increased 3% to $3,171K

Balance Sheet Changes (vs. December 31, 2023)

  • Cash increased 5% to $17,487K
  • Total long-term debt1 (gross) decreased to $58,187K from $58,431K
  • Stockholders’ deficit decreased to $(17,899)K from $(18,243)K

Executive Comments

“The first quarter of 2024 showed continued growth at the top and bottom lines,” said Matt Reback, President and CEO. “Both gross and net revenue were records, and by significant margins.   And our Adjusted EBITDA was just shy of the record achieved in Q2 23, when we had $1.6 million in perpetual license sales as compared to $805 thousand in Q1 24. While sales of perpetual licenses were higher than we had planned in Q1 24, they were lower than last year and we remain principally reliant on recurring license revenue, which was 92% of gross revenue in Q1 24 as compared to 85% in Q1 23.

“In the Core sector of our business, Gross Revenue for the quarter was up $1.0 million (20%) and Net Revenue grew by $225 thousand (+4%). Our distribution of EZ Baccarat®, which commenced in September 2023, accounted for the bulk of the increase in recurring license revenue in our Core sector. Also, our GOS product continues to gain momentum with over 100 installations, and development of GOS 2.0 continues on schedule for release later this year. In our iGaming sector, revenues were up 14% on a gross basis and 16% after netting out royalties.

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“We have been hard at work on product development under the leadership of Michael Ratner, and I expect that we will have some interesting product innovation news to announce in the coming months.” concluded Reback. “This has been a principal area of focus for me since I joined Galaxy late last year and I am proud of the momentum our entire product team is gaining.”

We were cash flow positive in the quarter and ended with $17.5 million in cash,” added CFO Harry Hagerty. “Our loan from Fortress Credit Corp. requires our net leverage not to exceed 5.0x at any of the quarter-ends in 2024, and at the end of Q1 we were at 3.8x, comfortably in compliance. It remains our intention to reduce our net leverage by focusing on both EBITDA growth and debt reduction and to pursue sensible refinancing opportunities.

Our Q1 2024 results strongly support the guidance that was given when we released our Q4 2023 earnings. However, we will wait until we have Q2 results in hand and better visibility into the second half of the year before considering whether any changes to guidance would be appropriate. As stated previously, our guidance assumes no impact to our business from the wars in Ukraine and the Middle East, no economic recession or pandemic, and is a Forward-Looking Statement subject to our safe harbor language below. Finally, the forecast is based on currency exchange rates that we experienced in the fourth quarter of last year.”

The company will update its investor deck to reflect the results in this quarter. Investors are encouraged to send questions to management at [email protected] by Wednesday, May 15, 2024. Management will post their answers to investors on or before Monday, May 20, 2024.

Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections.  All forward-looking statements are based on current expectations and projections of future events.

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These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements or installations in land based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, including changes in gaming related and non-gaming related statutes and regulations that affect the revenues of our customers in land-based casino and, online casino markets, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 or other pandemics including without limitation, government imposed shut downs, travel restrictions and supply chain interruptions, unfavorable economic conditions in the US and worldwide, our level of indebtedness, restrictions and covenants in our loan agreement, dependence on major customers, protection of intellectual property and our ability to license the intellectual property rights of third parties, failure to maintain the integrity of our information technology systems, including without limitation, cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business, and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this report. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Actual results could differ materially from those expressed or implied in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties. You should not assume at any point in the future that the forward-looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.

About Galaxy Gaming

Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative proprietary table games, state-of-the-art electronic wagering platforms and enhanced bonusing systems to land-based, riverboat, and cruise ship and casinos worldwide. In addition, through its wholly owned subsidiary, Progressive Games Partners LLC, Galaxy licenses proprietary table games content to the online gaming industry. Connect with Galaxy on Facebook, YouTube and Twitter.

Non-GAAP Financial Information

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EBITDA and Adjusted EBITDA include adjustments to net loss/income to exclude interest, taxes, depreciation, amortization, share based compensation, gain/loss on extinguishment of debt, foreign currency exchange gains/losses, change in estimated fair value of interest rate swap liability and severance and other expenses related to litigation. EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). However, EBITDA and Adjusted EBITDA are used by management to evaluate our operating performance. Management believes that disclosure of EBITDA and Adjusted EBITDA allows investors, regulators, and other stakeholders to view our operations in the way management does.   Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net income or to net cash provided by operating activities as a measure of operating results or of liquidity. Finally, EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Contact:

Media: Phylicia Middleton (702) 936-5216
Investors: Harry Hagerty (702) 938-1740

Exhibit 1
Disaggregation of Revenue
 
  Three Months Ended March 31,        
Consolidated Revenues:   2024       2023     $ Change   % Change
Recurring License Revenue $ 8,854,681     $ 6,940,736     $ 1,913,945     28 %
Sale of Perpetual Licenses   805,193       1,268,250       (463,057 )   -37 %
Gross Revenue   9,659,874       8,208,986       1,450,888     18 %
Royalties Netted against Gross Revenue   (1,658,808 )     (786,452 )     (872,356 )   111 %
Net Revenue $ 8,001,066     $ 7,422,534     $ 578,532     8 %
               
  Three Months Ended March 31,        
GG Core Revenues:   2024       2023     $ Change   % Change
Recurring License Revenue $ 5,398,728     $ 3,903,630     $ 1,495,098     38 %
Sale of Perpetual Licenses   805,193       1,268,250       (463,057 )   -37 %
Gross Revenue   6,203,921       5,171,880       1,032,041     20 %
Royalties Netted against Gross Revenue   (806,280 )           (806,280 )   NM  
Net Revenue $ 5,397,641     $ 5,171,880     $ 225,761     4 %
               
  Three Months Ended March 31,        
GG Digital Revenues:   2024       2023     $ Change   % Change
Recurring License Revenue $ 3,455,953     $ 3,037,106     $ 418,847     14 %
Sale of Perpetual Licenses                   0 %
Gross Revenue   3,455,953       3,037,106       418,847     14 %
Royalties Netted against Gross Revenue   (852,528 )     (786,452 )     (66,076 )   8 %
Net Revenue $ 2,603,425     $ 2,250,654     $ 352,771     16 %
               
NM: Not Meaningful              

Exhibit 2
Reconciliation of Net Income to Adjusted EBITDA
 
    Quarter Ended March 31,
Adjusted EBITDA Reconciliation:     2024       2023  
Net income   $ 208,908     $ 110,694  
Interest expense     2,289,347       2,203,635  
Interest income     (201,866 )     (84,750 )
Provision for income taxes     26,325       5,575  
Depreciation and amortization     686,193       576,342  
EBITDA     3,008,907       2,811,496  
Stock-based compensation (1)     141,242       244,923  
Realized and unrealized foreign currency exchange (gain)/loss (2)     (12,177 )     22,688  
Severance expense (3)     24,483        
CEO transition expenses (4)     8,200        
Special project expense – Other (5)           5,321  
Adjusted EBITDA   $ 3,170,655     $ 3,084,428  
 
(1) Represents non-cash expenses for stock option and restricted stock vesting of directors, officers, employees and consultants.
(2) Represents realized and unrealized gains and losses due to fluctuations in foreign currency rates.
(3) Represents severance expense relating to a terminated employee.
(4) Represents moving expenses incurred by the new CEO, Matt Reback, and reimbursed by the Company.
(5) Represents legal fees paid in relation to miscellaneous shareholder matters.
 

1 Includes current portion.

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Galaxy Gaming® Highlights Galaxy Operating System™ and EZ Baccarat® at IGA 2024

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LAS VEGAS, April 02, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTC: GLXZ), the world’s leading independent developer and distributor of casino table games and technology, will showcase their innovative new table game operating system and player-favorite table games at this year’s Indian Gaming Association (“IGA”) Trade Show & Convention from April 10 – 11 in booth 770 at Anaheim Convention Center.

President and CEO of Galaxy Gaming, Matt Reback shared his excitement, stating, “We look forward to showcasing our premier table games and innovative solutions with our tribal partners at IGA 2024. We’re proud to offer the largest library of category-leading brands that players love enhanced by technology to elevate their gaming experience. This powerful combination can transform the gaming floor for operators.”

Galaxy Operating System™ – The Smartest Table Management System

Upgrade your casino floor with Galaxy Operating System (GOS), the cutting-edge game management system of the future. Boasting innovative progressive jackpot options, eye-catching Nebula LED sensors, and groundbreaking digital tracking capabilities, GOS is a pioneer and the best way for operators to offer enhanced table games on their floors.

GOS’ flexible electronic bonusing platform powers the world’s first Dynamic Progressive. Unlike any other progressive, Dynamic Progressive blends our most popular games with an exhilarating experience for those players looking for a thrill by adding volatility to the game without changing the play experience on the player-favorite base game. Visit the Galaxy Gaming booth to see the latest version of Dynamic Progressive complete with new themes, animations, and celebrations.

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The Smart Bet – Galaxy Gaming’s Ultimate Table Games Library

Boasting the most robust table games library in the industry, Galaxy Gaming fuses established classics with exciting novelties. Level up your casino floor with player favorites like 21+3®, Perfect Pairs®, and Heads Up Hold’em® now amplified with Dynamic Progressive™, powered by GOS™. Don’t miss the #1 commission-free baccarat brand in North America, EZ Baccarat® now featuring the exciting new Panda 8 and Dragon 7 Progressive – the newest baccarat progressive on the market offering an individual jackpot.

Also featured in-booth is Roulette Up™, an inventive game with an optional side bet and progressive wager where players can wager that the outcome will provide an increasing sequence from each spin. Tracking is now seamless, with GOS powering digital tracking for the Roulette Up progressive wager.

Operators are invited to explore the possibilities at booth 770 and discover how Galaxy can elevate their gaming operations.

About Galaxy Gaming 
Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative games, bonusing systems, and technology solutions to physical and online casinos worldwide. Galaxy Gaming offers games proven to perform developed by gaming experts and backed by the highest level of customer support. Galaxy Gaming Digital is the world’s leading licensor of proprietary table games to the online gaming industry. Connect with Galaxy Gaming on Facebook, YouTube, Instagram, and Twitter. 

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This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. All forward-looking statements are based on current expectations and projections of future events. 

 These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements or installations in land based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, including changes in gaming related and non-gaming related statutes and regulations that affect the revenues of our customers in land-based casino and, online casino markets, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 or other pandemics including without limitation, government imposed shut downs, travel restrictions and supply chain interruptions, unfavorable economic conditions in the US and worldwide, our level of indebtedness, restrictions and covenants in our loan agreement, dependence on major customers, protection of intellectual property and our ability to license the intellectual property rights of third parties, failure to maintain the integrity of our information technology systems, including without limitation, cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business, and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this report. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Actual results could differ materially from those expressed or implied in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties. You should not assume at any point in the future that the forward-looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.

Contact: 

Media: 
Phylicia Middleton (702) 938-1753 
Investors:         
Harry Hagerty (702) 938-1740 

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