Hello, everyone, and welcome to the PlayAGS Q2 2021 Earnings Call. My name is Charlie, and I'll be coordinating the call today. [Operator Instructions]. I will now hand over to Brad Boyer, Head of Investor Relations to begin. Brad, please go ahead..

Thank you, operator, and good afternoon, everyone. Welcome to the PlayAGS Inc. Second Quarter 2021 Earnings Conference Call. With me today are David Lopez, CEO; and Kimo Akiona, CFO.

A slide presentation reviewing our key operational and financial highlights for the second quarter of 2021 can be found on our Investor Relations website, investors.playags.com. On today's call, we will provide an overview of our Q2 2021 financial performance and offer perspective on our current financial outlook for the business.

This conference call will include the use of forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement based on assumptions today.

Actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update our disclosures.

For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings release that we issued today as well as risks described in our annual report on Form 10-K, particularly in the section of these documents titled Risk Factors.

Our commentary today will also include non-GAAP financial measures. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in our business.

These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our earnings release issued today. Please refer to our filings with the SEC for more information.

With that, I would like to turn the call over to our CEO, David Lopez..

Thanks, Brad, and good afternoon, everyone. Over the past several weeks, I have frequently been asked by investors and business colleagues. Is this as good as it gets for the U.S. land-based gaming industry. After reflecting long and hard, I often reply with a definitive, maybe.

In my over 20-year career in gaming, I cannot recall time in which so many records were being shattered in such a widespread fashion. It seems that with each domestic gaming operators earnings report, long-standing records for margin or EBITDA are being broken.

Similarly, as states report monthly gaming revenue data, more often than not, records are being rewritten. As it relates to AGS, we're able to leverage our over 15,000 unit domestic EGM installed base to benefit from the market strength throughout the second quarter and, in turn, set some records of our own.

Notably, our second quarter domestic EGM RPD and domestic EGM gaming ops revenue each established new records for the company.

Although encouraged by our record-setting gaming ops performance and despite some of the broader market strength continuing into July, we continue to believe that unique macroeconomic factors are influencing the overall domestic gaming market.

While we expect the market to eventually graduate to a new normal as support influences taper off, we believe our improved execution and product momentum across all 3 of our business segments position us for growth and share taking in these quarters ahead.

As you may remember, I commented on a recent earnings call that I believe we had the best new product lineup in our company's history.

While simply a prognostication at the time, I'm proud to say that the enhancement made to our product portfolio, business practices and personnel that gave me the confidence to make my original comment are already beginning to bear fruit.

To that end, a desire to broaden our presence in the lucrative premium recurring revenue slot segment remains one of the most prominent and compelling strategic growth initiatives at AGS. During the second quarter, we achieved 2 major milestones within our premium game business.

First, we leveraged our one-of-a-kind LED Canvas display and consistent game performance to grow our Orion Starwall installed base to over 500 games.

As you may recall, we've only been actively placing Starwalls into the field without the overhang of COVID-related casino closures for effectively 2 quarters, making the ascent to over 500 games an impressive accomplishment.

More importantly, supported by the steady game performance and the introduction of additional product configurations, demand for the Starwall continues to build, which should allow for further growth in the quarters ahead.

As a follow on to Starwall, our team recently executed a thoughtful and successful commercial launch of our second premium game concept, the Orion Curve Premium. Although early in the product life cycle, initial Curve Premium installs have been performing well above house average, helping to further solidify operator demand for the product.

Ultimately, I envision our premium game strategy benefiting our company in 3 unique ways. First, when executed well and as we have witnessed with our initial installs, premium games can deliver RPDs well ahead of our historical game average in both Class II and Class III markets.

Second, we should be able to leverage the strong RPD performance and the capital efficiency benefits derived from using our core Portrait and Curve screen cabinets to deliver our premium games to dramatically improve our returns on invested capital and free cash flow generation over time.

Finally, our premium strategy broadens the overall addressable market for our products as we now have the products to penetrate the over $1 billion domestic premium game market, a capability did not exist prior to the initial COVID outbreak. Turning to our core EGM business.

I'm encouraged by the early indications of improved execution and accelerating product momentum being achieved throughout our game development organization.

To that end, our recently released Captain Riches title, a member of our Ultimate Choice Jackpots family of games and available on our Orion Curve cabinet, achieved a top 15 ranking in the July Eilers game performance reports New Core Video Reel category.

Looking beyond Captain Riches, we have launched additional game themes that we believe have the potential to help further improve our product momentum and recapture replacement market share.

All told, we expect our EGM sales business to recover over the coming quarters, led by our improved game content execution and performance, further strengthening of the North American replacement demand and our continued success in capitalizing upon new product adjacency opportunities such as HHR.

Looking beyond EGMs, I'm equally as encouraged by the momentum in our Table game products and interactive businesses, both of which delivered record adjusted EBITDA in the quarter. Within Tables, we continue to leverage our strong performing and expanding suite of unique content to grow our Table Products installed base.

Additionally, we were live with 10 AGS arsenal site license contracts at the end of the second quarter with the signed deals generating over $2 million of high-margin and recurring annualized revenue.

Looking ahead, I believe unwavering demand for our core Table Products strengthened by our recently launched Bonus Spin Xtreme progressives, along with the ongoing site license discussions and the pending introduction of our PAX S card shuffler have the potential to steepen the growth trajectory we are able to achieve within our Table Products business.

With respect to Interactive, we continue to execute our strategy to accelerate growth within our real-money gaming business.

RMG revenues and adjusted EBITDA established a new record in the second quarter, driven by successful launches into the new regulated jurisdictions, back-end integrations with additional B2C operators and the introduction of additional AGS content into the online domain.

Importantly, the momentum we saw in the second quarter has continued into July, which highlights our RMG team's improved execution.

Although relatively small today in terms of absolute EBITDA dollars generated, we continue to believe that the superior growth attributes and strong pure-play trading multiples should allow our Table product and Interactive businesses to meaningfully enhance shareholder value moving forward.

In closing, I would like to thank all of our AGS team members for their contributions and commitment to the company during what continues to be a uniquely challenging and stressful time for many.

Your efforts have not gone unnoticed as AGS was recently named the best and brightest company to work for in both the Atlanta and national categories for the fifth consecutive year.

Although it's become in vogue way for companies to tout strong corporate culture, I believe our recognition by the Best and Brightest program speaks to our employees' dedication and commitment to fostering a welcoming and inclusive corporate work environment.

With that, I will turn the call over to Kimo to provide additional perspective on our financial results, liquidity position and current outlook for the business..

Thank you, David, and good afternoon, everyone. While an accommodative domestic gaming environment bolstered our second quarter operating results, our performance also benefited from early indication of improved game content development, enhanced product management capabilities and strengthen capital deployment processes.

All told, I believe the continuous improvement being achieved in these 3 areas sets us on a path to deliver more consistent financial performance, improving our capital returns and leverage profile and most importantly, strengthening shareholder value over time.

With that said, I would like to start off today's call by reviewing our second quarter results and providing some forward-looking perspective for each of our operating segments.

Although not anticipated, it is important to note my forward-looking commentary assumes no material changes with respect to COVID-related operating restrictions or casino closures. Turning to our results. Total second quarter EGM revenue was $61.2 million, up over 20% on a quarterly sequential basis.

We sold a total of 613 units in the quarter, 175 of which were associated with new casino openings and expansions. Domestic average selling price, or ASP, was approximately $16,900, reflecting a higher mix of convert-to-sale units sold in the quarter. Excluding the convert-to-sale units, we estimate our ASP would have been approximately $18,200.

Looking out over the balance of the year, we are encouraged by evidence of operators' recent strong financial performance, accelerating the recovery in industry-wide replacement unit demand. Additionally, as our game content execution continues to improve, we believe we could begin to gradually achieve greater replacement unit market share.

Finally, we feel we are well positioned to further leverage our exceptional game performance to take advantage of opportunities in existing and soon-to-open HHR markets. Taken together, we believe these items should allow our second half unit sales to exceed the 902 units sold in the first half of 2021.

With respect to ASP, we expect our premium-priced Orion Curve cabinet to increasingly comprise a greater mix of our total units sold, in turn, helping us to achieve a stronger ASP in the back half of the year. Turning to our domestic gaming operations business.

Second quarter RPD reached a new company record of $33.11, up more than 20% over the $27.10 achieved in the first quarter of 2021.

Strength in the broader domestic gaming revenue environment, as David discussed earlier in his prepared remarks, a growing mix of higher-yielding premium games within our domestic installed base, improving core content execution and our recent strategic pruning initiatives all contributed to our record domestic RPD performance in the quarter.

Our domestic EGM installed base included 15,446 units at the end of the second quarter, representing a modest quarterly sequential decrease of 10 units.

Looking ahead, we expect the combination of a strong initial customer response to our recently released Orion Curve premium cabinet, consistent with demand for our Orion Starwall and scheduled new casino openings and expansions to drive modest sequential growth in our domestic installed base as we progress throughout the year.

As it pertains to our outlook for domestic RPD although the strength in the broader domestic gaming macro environment has continued into July, we expect trends to moderate towards a new normal over time, triggering a corresponding moderation in our domestic RPD performance.

That said, we believe the structural changes we have already made and intend to make to the composition of our domestic installed base led by our premium game and strategic pruning initiatives could allow us to exceed our 2019 RPD performance in the back half of 2021, even if macro trends were to moderate. Shifting to our international EGM business.

Although we continue to see signs of improvement throughout the Mexico market, the pace of recovery has been much slower relative to what we are experiencing in our domestic business.

Second quarter international RPD was $4.66, up nearly 60% over the $2.94 achieved in the 2021 first quarter, but still well below the levels we were achieving prior to COVID.

At the end of the second quarter, we estimate approximately 65% of our 7,879-unit international installed base was active, marking a considerable increase relative to the approximate 36% of units that were active at the start of the year.

All told, a less supportive macroeconomic climate and stringent COVID-related operational protocols continue to protract the recovery within our Mexico gaming operations business.

Although indications of improving customer demand have us feeling cautiously optimistic about potential for international RPD to continue to modestly improve as we progress throughout the remainder of 2021. We believe it could require a couple of years for international RPD to return to pre-COVID level.

Having said that, despite the smaller revenue base, our team has remained extremely diligent at managing expenses within our International segment to ensure the business continues to positively contribute to our consolidated EBITDA performance.

Our Table Products segment remains a model of consistency with second quarter adjusted EBITDA, establishing another all-time record. The Table Products installed base grew to 4,458 units at quarter end, representing an increase of 96 units on a quarterly sequential basis.

Looking ahead, we believe growing interest in our suite of industry-leading progressive products and our AGS arsenal site license offering, combined with the highly anticipated launch of our PAX S card shuffler, have the potential to simultaneously expand our Table Products installed base and increase our average lease price as we progress throughout 2021.

Finally, our Interactive segment delivered record revenues and adjusted EBITDA in the second quarter, led by our outsized growth within our real-money gaming business. RMG revenues more than doubled year-over-year to a record $2.2 million, well ahead of the previous $1.4 million record set in the first quarter of 2021.

Perhaps more importantly, our Interactive segment delivered positive adjusted EBITDA for the sixth consecutive quarter, supported by improved revenue performance and our commitment to profitably scaling our RMG business.

Looking out over the remainder of the year, we view our success of integrating our online content with additional B2C operators, introducing additional AGS titles into the online domain, and expanding our suite of online content to include our first online table game offering as the keys to further strengthening our Interactive segment revenue performance.

Although we remain focused on profitably scaling our RMG business, investments intended to support our future interactive growth initiatives could temporarily dampen our segment level margins in the back half of the year.

Before moving on to your questions, I would like to provide additional color on how we see margins, cash flow and leverage shaping up for the full year.

We achieved an adjusted EBITDA margin of 48% in the second quarter, supported by the strength witnessed in our higher-margin gaming operations business and the gradual return of sales and marketing expenses followed the relaxation of COVID travel restrictions.

Looking ahead to the full year, we continue to expect our adjusted EBITDA margin to land nearer to the low end of our targeted 45% to 47% range, as we anticipate making additional investments in our R&D franchise to support our future growth initiatives, experiencing further normalization in sales and marketing expenses and recognizing a greater mix of lower-margin slot sales revenue as the year progresses.

Second quarter CapEx totaled $11.5 million, bringing our year-to-date capital spend to $21.4 million. Through the first 6 months of the year, we generated $14.5 million of positive free cash flow.

Looking out over the remainder of 2021, we continue to expect our second half capital spend to increase relative to the level we incurred in the first half of the year. Our current CapEx outlook reflects the anticipated timing of new product launches and strengthening customer demand supported by our improved game content execution.

Consistent with the first half of the year, we expect to allocate a disproportionate share of our second half capital spend to support our premium game growth initiatives. Additionally, we expect to continue to thoroughly analyze all of our new game placement decisions to ensure we are allocating our capital to its highest and best use.

For the full year, we believe CapEx should come in slightly below the level incurred in 2019. Although we currently expect CapEx to ramp over the remainder of the year, we would remind investors that we do have discretion over the timing in which the majority of our CapEx is incurred.

Therefore, to the extent the broader gaming macroeconomic environment were to deviate materially from the current trend, we could elect to temporarily moderate or suspend the incremental capital spend in favor of bolstering our liquidity position.

Having said all of that, our strong second quarter financial performance, the accommodative North American gaming industry macroeconomic environment and early indications of improving demand for our products provide us with greater confidence in our ability to generate positive free cash flow for the full year.

Finally, our net leverage at June 30, 2021, was 5x down from 7.5x at the start of the year. Our adjusted net leverage covenant for compliance purposes was 4.1x, placing us firmly in compliance with our 6x leverage covenant.

Looking forward, we remain laser focused on restoring the balance sheet flexibility we have prior to the COVID pandemic when our balance sheet was levered well inside of 4x.

Additionally, we continue to carefully manage our leverage and liquidity position to ensure we can execute on opportunities to lower our borrowing costs as they present themselves. To that end, I am pleased to announce that subsequent to quarter end, we successfully extended our revolver maturity to November 2023.

We saw strong interest amongst lenders throughout the revolver extension process, which could bode well as more meaningful refinancing opportunities arise. Operator, this concludes our prepared remarks. We would now like to open the line up to questions..

[Operator Instructions]. Our first question comes from David Bain of B. Riley..

Great. Very nice quarter. First, if I could, David and Kimo, you mentioned HHR briefly, but twice. And I'm wondering if you could frame the departmental opportunity for AGS.

Maybe speak to the potential next year as it kind of differs from the normal replacement of new openings and what that market could look like for you specifically in terms of additional machine market?.

Thanks, David. We'll stay away from absolute specifics here, but the HHR market for us is it's been strong. And we see that continuing into the second half of the year and a bit more into 2022.

In addition to just the existing customers, we see a little bit of expansion there where that expansion into new states lands and when that might happen, is TBD, but we know that there's been a couple more jurisdictions that will come online.

But with the performance of our games and what we're seeing so far, we just - we do believe that this will be a continuing trend.

It's just really a - it validates what we did about 1.5 years, 2 years ago when we said, "hey, we're going to continue to find new ways to leverage our content into new areas and performance is fantastic versus the competition in the space, and that's what's driving a lot of what's going on right now..

Okay. Great. And then switching to - I guess I have a couple, premium - the premium footprint. What inning fall in, in your view? And looking at the initial performance and feedback of Curve Premium versus like a Starwall. And you mentioned the launch timing for Starwall. But for the best, you can't compare the 2.

It might be helpful just given kind of the potential impact upside, et cetera, to our RPD model. It would be great if you can speak to that..

And so we'll try to frame this the best we can. I'll start with sort of how proud I am of the R&D team product management and our sales team to get these - to just make this happen. Largely, we weren't in the premium space. I know we say that just about every quarter, and now we're just a couple of quarters into it with the exception of Big Red.

And we mentioned in the prepared remarks how quickly we've gotten to the number for Starwall. So - just I think largely, if you just talk about premium, David, it's - Brad and I were in the bullpen still, if you will, right? It represents a very small percentage of our installed game ops space.

It obviously - it's overweight, as far as you know, it produces much more than the percentage that it occupies. So I think we're in the mid-single digits as far as percentage of base. But as far as revenue goes, it accounts for about 10% of our revenue.

So - when you think about mid-single digits of our installed base, that means we have a lot of runway ahead of us. And that sort of has proven out as we look forward throughout the second half of the year, a big chunk of our installs are starting to pop up in the corporate space, and that's a very good indication.

Our games in Class II, Class II premium is really doing very well for us, and I'm really happy with the results there, which was expected. But now we're breaking in the Class III in the corporate space. So opportunity is great. We look forward to second half of the year and then obviously, 2022 because this is a needle mover.

We talk about it in prepared remarks. We know that it's going to continue to move the needle, but mid-single digits is where we're at right now. So there's a lot more runway for us..

Our next question comes from Barry Jonas of Truist Securities..

Great. David, we've heard commentary from some operators, both around reducing slot floor sizes but also around potentially increasing investment for slots. I know there's a bit of a crystal ball here, but at a high level, I'd love to get any thoughts you have on where you think the market could be headed between now and the next few years..

So we'll hit both those questions. I think those things sort of make sense together. It might sound like as a headline, if an operator were to say, "Oh, this is what we're looking at. I think it makes a lot of sense, reducing the floor, the footprint of slots on the floor.

From what I can see, and this is the majority of casinos in the U.S., not all casinos in the U.S. There's a lot of dead floor space. There's machines that are out there that are really just taking up space on the floor to fill out a floor.

So if they were to reduce the footprint on the floor, I think that makes things more efficient and effective for them. But to increase spend in the space means they're going to refresh a larger percentage of their floor. And I think that that's great for them. That's great for the supply side. It's just great for the industry in general.

So as far as like the crystal ball answer and mine is not perfect, obviously, I could see that - it going in that direction. And it really - I know it sounds crazy, but being good - a little bit good for everybody..

Great. That's really helpful. And then I just wanted to touch upon M&A.

How active is the pipeline right now for you guys? Are there any specific areas you could be looking to focus on?.

So I think there's sort of 2 ways to look at investment for us right now. Kimo mentioned in his remarks, that we're going to continue to invest in our R&D franchise. We delve in headfirst in Aus - or well, excuse me, Australia. We dove in headfirst in Australia a couple of years ago now, going back is probably a little bit longer.

We knew that, that investment would take time to pan out and show a return just because getting everyone hired, getting everything set up, getting the first games out and then really becoming effective when you get to game 2, 3 and 4 and beyond. And our team down there, again, really proud of the work they've put in. They're fantastic.

And it's just a nice addition to Atlanta and Reno and Austin and the abilities and productivity we get from there. So one way to look at investment is organic investment. And we're going to continue to do that because we know that there's a great return on that.

When it comes to M&A, and I know it took me a minute to get to your actual question, but we'd like to focus more on - from an M&A perspective on the new stuff, which is Interactive and the like. We're always looking - I think that that's been a discipline we've had over the past 5, 6 years. So we're always active in the space, but nothing imminent.

And - but it's a frame sort of put some guardrails on what we look at, a lot of online stuff is what we're interested in..

Our next question comes from Jeff Stantial of Stifel..

I wanted to start on the gaming ops footprint. It sounds like between the Curve Premium and some of the expansion activity, we should be expecting sequential growth in the back half of the year. If you strip out some of those openings and those expansions, is it fair to think the installed base could largely show sequential growth from here on out.

It sounds like Curve Premium, Starwall, et cetera, are all resonating with their customers.

But I just want to better understand what's left for the pruning of the footprint and sort of how that plays into the ramp cadence here for your total installs?.

So yes. O&E is going to obviously be part of the second half game ops growth. But you mentioned 2 things, "hey, how is premium going to look in the second half and beyond and then pruning.

And it's difficult to say exactly how much we might prune because it just comes down to the effectiveness of going in, removing a unit in various jurisdictions and putting in, let's say, for example, a premium unit. I'd say the best example of that is in Class II.

So although we may have a lot of success with premium, some of that might come along with some pruning. So yes, some modest progression and growth there in the second half of the year due to O&E and premium.

But from the premium perspective, we're going to watch that very closely and try to be efficient with our footprint to just try to get the best returns we can on our capital. So that will be a little bit of a TBD on the second half year question. But either way, it will be very effective for RPD..

Great. And then for my follow-up, Kimo, I appreciate all the color on margins for the back half of the year. I did want to drill in a little bit more there. Specifically, we've heard some peers call out cost inflation from supply chain friction.

Is this something you're seeing, expecting to see you, was this baked into some of your comments on operating cost inflation? Just - can you help us understand that notion and how that impacts how you're thinking about margins in the back half of the year?.

Yes. I think all of the above. I think we're obviously seeing like many people in the industry and not just gaming, right? It's across manufacturing in different sectors, like we are seeing some inflation, whether it's wages or parts and components and whatnot.

I think the other part of margin, right, is you break things apart and you look at our commentary, maybe a little bit on moderation of RPD, right, in gaming play levels that plays into part of it.

Another part of the equation just naturally as we ramped here, right? And we continue to invest in the business, like David said, and continue to hire in R&D. We continue to back online sales and marketing spend and whatnot. We'll have sequential growth like SG&A.

But still, we look to land the year similar to what we said last quarter, we look to land the year closer to call it 45% consolidated..

[Operator Instructions]. Our next question comes from Chad Beynon of Macquarie..

I wanted to ask about product sales. Kimo, you noted that you guys are expecting 2H to essentially mirror 1H in terms of sales.

Within that comment, can you kind of talk about what your expectations are for market share if you expect to stay the same, increase, decrease? And then related to that, the conversations that you're having with operators, given they've generated significant revenues and EBITDA in the second quarter, do you think the replacement cycle could actually start to improve in the near term, assuming a lot of those conversations will start at G2E, but any initial color there..

So actually in the prepared remarks said, we sort of alluded to H2 looks to be better than H1 for us. And built into that right is sentiment we're seeing from the marketplace, right? We see - we don't want to exaggerate it, but we do see, right, replacement cycle picking up. We see operators having great performance.

So we - from talking to sales and whatnot, we do see the funnel or the pipeline picking up for the back half of the year. And there's also some new openings and expansions that we'll see in H2 as well..

And then Chad, I think that when we look at second half of the year, we often get the question about, "hey, how do we see the market shaking out? What's going on?" And really, we see the macro trends continuing, and I alluded to it in the prepared remarks that, "hey, is this the best it gets?" And it's like an absolute maybe because who knows what it's going to do from here.

We anticipate perhaps a new normal at some point, but I know you commented on market share, but if I only knew the denominator, I can tell you what the share is, but we're going to focus on the numerator, and I think that's what we're really going to focus on is doing what we do best. We're really pleased.

Again, give a kudos to the product management, sales and R&D teams that the effective way they've run the business here. So we're going to look forward to an improved second half. And hard to say what that denominator is going to be. But I know G2E will be good for us, the lineup of products that we have this year. I think it is the strongest.

I think the games are performing both on the core and premium side. So I am excited to see what the boys have put together and how things go from here..

Perfect. I understand. And yes, sorry for that clarification. And then on the Table side, just given it probably wasn't the best time to be selling Table Products, particularly in the socially distanced measures that casino has experienced for some time for the past year.

Can you talk about the PAX S shuffler, how that's been received? Maybe if you're still confident you'll be able to deploy that at a number of casinos if that was slightly pushed back just given everything that happened..

Thanks. So PAX S, and we'll just talk in general about Tables. I think on the Table side, again, pleased with our progress. We believe in this business, I think it's going to be a real contributor. We know it's a small part in absolute dollars of what we do, but we also think that it's a grower. So we're pleased with where we're at.

The progressives are out there doing an amazing job. So again, same thing is with the slot team. Our Table team has put together great products. The performance is fantastic, and the sales teams really kicking butt doing what they need to do out there. PAX S, demand for it is going to be fantastic.

We've got folks waiting, willing and ready to fire away when the time comes. We've tested it out there in a live environment. And we're going to continue our testing here in the second half and release at the right point, and I'll focus a little bit on my words, the right point.

Chad, as you know, I have been down this path before, played through these movies. And the one thing we want to do, and I certainly want the team to do is do a full release at the right time when we're ready because that is what generates the most momentum and the most success for that type of product launch.

So I hope that sort of answers your question there, but that's where we see it right now..

Our next question comes from David Katz of Jefferies..

You've covered a lot. So I just want to spend one second if we can on the Oklahoma installed base.

Can you just talk about sort of where that number firms up? Is that a number that grows over time or is relatively stable? And within the RPD, how supportive or stable is that number within it or - assuming, obviously, the premium games are very, very strong and driving the number higher.

But within that, are they accretive, dilutive or neutral, I guess, is the nature of the question..

So you're asking a premium is sort of accretive in Oklahoma. And so there's a few things here sort of in that question. So I think the installed base itself, David, will be stable to maybe a little bit of modest growth. But the caveat to that is going to be a little bit of what I said earlier.

When we go in with more premium into the Class II Oklahoma market, it's sort of a deal where we're going. Some will be replacements, some will be new units. But we want to see how those premium games do versus what it [indiscernible]. Our product management team, along with sales, is laser-focused on finding the right items to swap or prune.

So that installed base, I'll say, will be stable, but it's going to do in many ways what we want it to do as far as a unit quantity goes, but our premium is going to be a big part of improvement. And it's not just that. We are super focused on core. We've got a team in particular, beyond our regular core games.

We have a team in Austin and a developer there that's really focused on that market and performing well in that market. So we have hopes and plans to improve RPD there because that's a bit of a needle mover for us if we do that. Again, stable base, improve RPD, improve returns on our cash that's invested there..

Ladies and gentlemen, this concludes today's Q&A and, therefore, today's call. Thank you for joining today. You may now disconnect your lines..