IGT

IGT stands by $4bn year-end revenue target despite lottery slowdown

Gaming revenue continued to be the ‘standout performer’ for International Game Technology (IGT Plc) during Q3 trading as the firm’s group-wide revenue remained stable against 2022 comparatives.

The NYSE-listed gambling and lottery technology provider reported group-wide revenue for the trading period ending 30 September of $1.06bn, representing no change from Q3 last year.

Total adjusted EBITDA rose 8% from $402m to $433m, whilst operating income increased 13% from $211m to $239m, driven predominantly by gaming operations, which recorded an uptick in revenue in contrast to IGT’s lottery unit.

Group CEO, Vince Sadusky, remarked: “The strength of our leadership positions across Global Lottery, Global Gaming, and PlayDigital is evident in our third quarter and year-to-date results.

“Excellent momentum in key performance indicators is driving revenue growth and even stronger profit expansion. With a compelling pipeline of innovative products and solutions showcased at recent trade shows, 

“I am confident we can achieve our near and medium-term goals as we focus on unlocking the intrinsic value of IGT’s market-leading assets.”

A unit-by-unit breakdown saw Global Gaming revenue increase 8% from $379m to $409m, a trend following on from the second quarter of the year when income for this segment rose 13% to $373m ($330m).

The group’s PlayDigital division also reported year-on-year growth, having also performed well in the first and second quarters of this year, albeit by a lower margin than in Q2. The unit’s Q3 revenue grew 1% from $54m to $55m.

On the other hand, the company’s lottery operations have continued to take a hit from 2022, with revenue declining 4% to $601m ($626m), but the group remains confident in both its European and US prospects in this area.

The third quarter saw IGT enter into contract extensions with the California Lottery and Kentucky Lottery Corporation whilst also delivering an iLottery solution to Poland’s Totalizator Sportowy.

This performance was also reflected by operating income and EBITDA – Global Gaming recorded operating income up 42% to $93m ($65m) and EBITDA up 41% to $135m ($96m).

PlayDigital’s EBITDA also rose 16% from $16m to $19m and operating income increased 32% from $12m to £16m, but as with revenue the Global Lottery segment continued to struggle, with EBITDA down 2% to $206m ($211m) and operating income down 4% to $601m ($626m).

The company attributed these performances to varying factors, with Global Lottery trading linked to the sale of Italian commercial services which contributed $12m in operating income.

Meanwhile, Global Gaming’s performance was attributed to improvements in the research and development process as well as easing of supply chain costs and high-margin system sales. PlayDigital.

Looking ahead, the group expects Q4 revenue of $1.1bn, with global lottery revenue expected to increase ‘low-to-mid single-digits’ and Global Gaming and PlayDigital in line with the prior year. 

For the full year, revenue is expected to reach $4.3bn, with an operating income margin of 23% and cash from operations between $900m-$1bn and capital expenditure of between $400m-$450m.

The group has not provided any update on the potential future divestment of the Global Gaming division, which according to Bloomberg had caught the interest of the Apollo Global private equity group in September.

Of significance, IGT highlighted a pronounced improvement on the management of its net-debt which in Q3 stands at a historic low of $5.07bn – reflecting “strong cash flow generation improving net debt leverage”.

“We are pleased with the financial results we delivered in the third quarter, including top-line growth, margin expansion, and strong cash flow generation,” concluded Max Chiara, CFO of IGT. 

“Our financial position is solid with net debt leverage at a historical low point and already comfortably within our long-term target range, which coupled with no meaningful near-term debt maturities and access to significant liquidity, greatly enhances our balance sheet and creates additional financial flexibility.”

SBC News IGT stands by $4bn year-end revenue target despite lottery slowdown

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