IGT raises FY23 guidance as gaming and digital divisions drive Q2 revenue

International Game Technology’s (IGT) Global Gaming and PlayDigital divisions have driven an impressive quarter for the company, prompting a readjustment of its full year trading projections.

The London-based igaming, iLottery and betting solutions developer informed its NYSE investors that total group income for Q2 2023 had risen 3% to $1.06bn (Q2 2022: $1.02bn).

This was driven largely by an increase in revenue for its Global Gaming division by 13% to $373m ($330m) with operating income up 25% to $71m ($57m). Meanwhile, PlayDigital revenue grew 38% to $59m ($43m) and operating income increased 125% to $18m ($8m). 

IGT attributed this strong performance to ‘strong player demand trends’ as well as the contribution of iSoftBet, acquired in July last year.

The overall strong performance in Q2 has prompted IGT to raise its guidance for the remainder of the year, projecting Q3 revenue of around $1bn and an operating income margin of between 22-23%.

For the full year, the firm expects revenue of between $4.2bn-$4.3bn, an operating income margin of 23%, cash from operations of between $900m-$1bn and capital expenditures of $400m-$450m.

Vince Sadusky, IGT CEO, said: “Our second-quarter and first-half results reflect solid revenue and profit momentum across all business segments.

“We achieved the high end of our outlook by executing key strategic initiatives and growing demand for IGT’s compelling content and solutions. We are solidly on track to deliver on our 2025 objectives and remain focused on unlocking the intrinsic value of IGT’s market-leading businesses.”

The group’s iLottery division, Global Lottery, encountered some hurdles, however. Total revenue was down 4% year-on-year to $624m ($648m), although a bulwark was provided by the sale of its Italian commercial services business in September of last year.

Operating income for the division, meanwhile, stood at £229m – which the firm stated is ‘in line with the prior year’. The figure for the end of Q2 was slightly lower than the year prior, dippling from $230m to $229m.

On a wider scale, the firm was able to close Q2 in a strong financial position thanks to the performance of Global Gaming and PlayDigital. The increase in revenue was accompanied by 8% growth in adjusted EBITDA to $443m ($409m), with a margin of 42% (40%).

Meanwhile, net income rose 10% to $251m ($228m). The company closed the quarter with slightly reduced net debt, down 6% from $5.7m to $5.3m.

Cementing some long-term business relationships in the quarter, IGT notably secured a 20-year licence to promote lottery games for the Minas Gerais State Lottery in Brazil, as part of a consortium with Saga Games BGI and Scientific Games.

The London-based firm has also signed a 10-year contract with the Maltese National Lottery, an eight-year deal with the Connecticut Lottery Corporation (CLC), a contract extension in Costa Rica and an eight-year transition agreement in Belgium.

Financially, some hurdles have remained for its Global Lottery division, however. The unit’s total revenue was down 4% year-on-year to $624m ($648m), although a bulwark was provided by the sale of its Italian commercial services business in September of last year.

“Our year-to-date performance showcases the strong cash generation of the business,” remarked Max Chiara, IGT CFO. 

“We have a solid foundation to build from as we continue to invest in our growth objectives, further reduce debt, and return capital to shareholders. Based on our first-half results, we are confidently raising our full-year 2023 revenue and operating margin outlook.”

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