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The board of IGT Plc has announced to markets that, as of this morning, the NYSE technology group will operate solely as a lottery systems technology provider.
This announcement comes as IGT expects to complete the sale of its Gaming & Digital business to Apollo Global by the end of Q3 trading in 2025.
On 26 July, IGT accepted a $4.05bn offer from New York PE fund Apollo Global to acquire its Global Gaming and PlayDigital units. The buyout is part of a $6.3bn transaction by Apollo Global, which will merge IGT’s gaming and digital units with fintech partner Everi Holdings, under the private ownership of the PE fund.
Publishing its Q3 trading update, IGT announced to markets: “This quarter marks the first reporting period where the results of the Gaming & Digital business are classified as discontinued operations.”
Revenue from existing lottery operations for the period stood at $587m, a 2% decline compared to 2023’s $601m.
A breakdown of the lottery unit shows service revenues accounting for $566m of income, while product sales contributed $20m. On a year-to-date basis, IGT’s lottery revenues are maintained at $1.86bn, in line with 2023 results.
Q3 accounts reported a $38m restructuring charge associated with “OPtiMa 3.0,” a programme focused on optimising general & administrative and operating activities, as operating income declined to $110m (Q3 2023: $163m).
Adjusted EBITDA decreased by 6% to $264m (Q3 2023: $279m), as IGT faced tough year-on-year comparisons with higher multi-state US jackpots activated through a higher-margin product channel in 2023.
Further headwinds saw IGT register a foreign exchange loss of $39m, compared to FX gains of $36m in the prior year, primarily due to the impact of EUR/USD exchange rate fluctuations on euro-denominated debt notes.
Net income for the period stood at $43m, down 65% from $123m recorded in the prior year, with IGT maintaining cash equivalents of $501m.
Accounts also detailed that during Q3 trading, a restructuring charge of $38m ($27m after tax) was incurred, primarily due to a planned reduction of about 3% of the company’s global workforce.
“Our third-quarter and year-to-date performance underscores the strength and resilience of our business model marked by our scale, attractive margin structure, and strong cash generation,” said Vince Sadusky, CEO of IGT.
“Over the first nine months, we generated $1.9 billion in revenue, led by steady Italy growth and improved third quarter trends in the U.S. We are excited to build upon a solid foundation as we transform into a leaner, more focused global lottery pure play and capitalize on attractive industry dynamics.”
On a year-to-date basis, IGT’s adjusted EBITDA is maintained at $880m, with an EBITDA margin of 47.3% compared to 48.6% in the prior year.
The board of IGT remains committed to reducing its corporate net debt of $5.2bn, aiming for a $2bn reduction upon closing the sale of the Gaming & Digital business. Future debt leverage is expected to align at 2.6x of adjusted EBITDA from continuing operations.
Looking ahead, IGT expects $40m in annualised cost savings by the end of 2026, with approximately 50% of these savings anticipated by the end of 2025.
“Sustained cash flow generation in the first nine months was predominantly driven by continuing operations,” said Max Chiara, CFO of IGT.
“The value of IGT is enhanced on a go-forward basis by a low pro forma leverage profile and by the launch of a cost optimization initiative as we look to right size the organization while supporting long-term growth initiatives.”
