Executive Summary

Q3 2022 revenue rose 12% year-over-year to $5.91M, but Adjusted EBITDA fell 5% to $2.35M; the quarter posted a net loss of $(0.70)M vs. prior-year net income of $0.87M .
Sequentially, reported revenue increased vs. Q2 ($5.68M → $5.91M); management highlighted 6% growth on a constant-currency basis amid FX headwinds .
Guidance was modestly modified: FY22 revenue targeted at the midpoint of $22.5–$23.5M and Adjusted EBITDA at the low end of $10–$11M due to FX, rates, and inflation pressures .
Post-quarter events: the company paid $2.0M to eliminate contingent IP royalties for Bonus Craps, expected to save ~$315K annually at Q3 run-rate; board reauthorized up to $750K of share repurchases .

What Went Well and What Went Wrong

What Went Well

Constant-currency growth: “On a constant currency basis, revenue increased by 19% in the quarter and 27% in the first nine months vs. 2021; sequential revenue growth was 6%” (Todd Cravens, CEO) .
Product pipeline momentum: New games/technologies introduced at G2E were “very well received,” with “several commitments to trial” new products (CEO) .
Balance sheet improvement: Cash rose to $19.3M and gross long-term debt declined vs. YE21; the firm was “comfortably in compliance” with Fortress covenant (CFO) .

What Went Wrong

FX and macro headwinds: Worsening exchange rates (USD vs. EUR/GBP), higher floating interest rates (+138 bps in Q3), and inflation lifted expenses and interest burden (CFO) .
Profitability pressures: Adjusted EBITDA declined year-over-year; Q3 reported a net loss, driven largely by higher interest expense on the Fortress term loan .
Elevated operating costs: SG&A was up ~22% YoY in Q3 due to headcount, compensation, travel, and professional services to strengthen financial systems and IP protection .

Financial Results

Metric	Q1 2022	Q2 2022	Q3 2022
Revenue ($USD)	$5,918,599	$5,676,195	$5,906,989
Net (Loss) Income ($USD)	$(13,962)	$(1,115,641)	$(698,690)
Diluted EPS ($USD)	$0.00	$(0.05)	$(0.03)
Income from Operations ($USD)	$1,589,116	$949,150	$1,297,952
Adjusted EBITDA ($USD)	$2,673,431	$2,358,387	$2,350,161

Year-over-year highlights (Q3 2022 vs. Q3 2021): revenue +12% to $5,907K; Adjusted EBITDA −5% to $2,350K; net loss $(699)K vs. net income $874K .

Segment/geography breakdown (reported):

Geographic Revenue	Q1 2022	Q2 2022	Q3 2022
North America & Caribbean ($USD)	$2,291,913	$2,683,756	$2,602,001
Europe, Middle East & Africa ($USD)	$3,626,686	$2,992,439	$3,304,988
Total ($USD)	$5,918,599	$5,676,195	$5,906,989

Selected KPIs (quarter-end balance sheet):

KPI	Q1 2022	Q2 2022	Q3 2022
Cash and Equivalents ($USD)	$17,242,102	$17,249,631	$19,275,180
Long-Term Debt (Gross) ($USD)	$60,184,433	$59,867,645	$59,550,000
Accounts Payable ($USD)	$488,235	$527,871	$3,399,386
Accrued Expenses ($USD)	$1,904,179	$3,014,122	$2,982,457
Stockholders’ Deficit ($USD)	$(16,836,876)	$(18,296,514)	$(18,505,952)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (net of iGaming royalties)	FY 2022	$22.5–$23.5M (lowered at Q2)	Midpoint of $22.5–$23.5M	Maintained range; clarified midpoint
Adjusted EBITDA	FY 2022	$10–$11M (lowered at Q2)	Low end of $10–$11M	Tilted to low end
Revenue (net of iGaming royalties)	FY 2022	$24.0–$25.0M (raised at Q1)	Superseded by Q2/Q3 updates	Lowered vs. Q1
Adjusted EBITDA	FY 2022	$11.8–$12.5M (raised at Q1)	Superseded by Q2/Q3 updates	Lowered vs. Q1

Assumptions reiterated: no new COVID lockdowns, no worsening war impact, and no recession .

Earnings Call Themes & Trends

Note: A Q3 2022 earnings call transcript was not found in our document catalog or public sources; themes below draw on Q1–Q3 MD&A and the Q3 press release [ListDocuments returned none; Internet links did not provide a GLXZ transcript].

Topic	Previous Mentions (Q1 2022 and Q2 2022)	Current Period (Q3 2022)	Trend
FX headwinds (USD strength)	FX headwinds cited impacting reported revenue growth	Worsening FX; constant-currency growth emphasized (19% in Q3)	Headwinds intensified
Interest rates and debt costs	Fortress term loan; higher rates driving interest expense growth	Floating rate up 138 bps in Q3; interest expense elevated	Headwinds intensified
Inflation and OpEx	Higher travel, compensation, marketing; contested proxy/legal costs	Higher professional services to enhance financial systems/IP protection	Persistent pressure
Product innovation (Triton, digital)	Triton 1.0 installs; Triton 2.0 demo planned; online 21+3 Progressive launch	New games/tech well received at G2E; trials committed	Positive momentum
iGaming growth (Galaxy Digital)	Strong non-U.S. and newly opened U.S. markets	Continued growth; FX dampens reported figures	Growth, FX-dented
UK recovery (land-based)	UK recovery aiding Galaxy Core	Continued recovery noted	Improving
Regulatory/legal	Contest proxy-related costs; covenant waiver resolved	Covenant compliance; buyback authorized	Stabilizing

Management Commentary

“On a constant currency basis, revenue increased by 19% in the quarter and 27% in the first nine months... As compared to Q2 2022, sequential revenue growth was 6%... [At G2E] we introduced several new games and new technologies... we already have several commitments to trial” (Todd Cravens, CEO) .
“Exchange rates, interest rates and inflation rates worsened in Q3... floating rate... increased by 138 basis points... we incurred higher-than-normal professional services expenses as we strengthen our financial systems and our intellectual property protection... balance sheet improved with increased cash and modestly reduced debt... comfortably in compliance” (Harry Hagerty, CFO) .
“In consideration of a $2 million cash payment, we eliminated the obligation to make contingent consideration payments... for Bonus Craps... this should save us around $315K on an annual basis” (CEO) ; transaction confirmed in 10-Q Note 5 .

Q&A Highlights

No public Q3 2022 earnings call transcript was found; therefore, no Q&A details are available from primary sources [ListDocuments returned none; Internet search did not yield GLXZ transcript].

Estimates Context

Wall Street consensus estimates (S&P Global/Capital IQ) for Q3 2022 were unavailable due to request limit errors at time of retrieval. Values retrieved from S&P Global could not be displayed; consensus comparisons are therefore not included. Where estimates are missing, we recommend cross-checking directly with S&P Global IQ Pro for EPS and revenue consensus levels for Q3 2022.

Key Takeaways for Investors

Growth resilient ex-FX: Underlying demand appears healthy with double-digit constant-currency growth; FX and rate headwinds mask core momentum .
Margin/p&l constrained by debt carry: Elevated interest expense on the Fortress term loan is the primary drag on net income despite operating gains; de-leveraging and rate path remain key .
Product catalysts: Positive reception at G2E and impending trials can drive 2023–2024 placements and iGaming title expansion, supporting revenue durability .
Cost discipline and systems: Near-term professional services spend to upgrade financial systems/IP protection should taper, aiding operating leverage if macro stabilizes .
Cash and buyback: With $19.3M cash and buyback authorization of up to $750K, capital returns are possible within covenant limits, signaling confidence while preserving flexibility .
FY22 guide anchored to macro risks: Targets point to cautious execution—midpoint revenue and low-end EBITDA—reflecting FX/rates/inflation; monitor revisions as conditions evolve .
Structural IP savings: The $2.0M payment eliminating Bonus Craps contingent consideration lowers run-rate royalties (~$315K annual), improving recurring economics .

Sources: Q3 2022 8-K and press release ; Q3 2022 10-Q ; Q2 2022 8-K/10-Q ; Q1 2022 8-K/10-Q . The company press release web page: and GlobeNewswire: .

Galaxy Gaming, Inc. (GLXZ)·Q3 2022 Earnings Summary