IGT Reports Strong First Quarter and Upgrades 2024 Outlook

CEO Vince Sadusky highlighted the better-than-expected results in the Global Lottery and Gaming & Digital sectors, prompting an upgrade in the company’s revenue and profit forecasts for the full year. “Innovative game, hardware, and systems solutions drove better-than-expected Global Lottery and Gaming & Digital performance in the first quarter. As a result, we are upgrading our full-year 2024 revenue and profit goals, which reflect broad-based momentum across key performance indicators in the balance of the year. We continue to make progress on separating Global Lottery from Gaming & Digital and preparing for the proposed transaction with Everi,” said Sadusky.

Key Financial Highlights

IGT reported consolidated revenue of $1.07 billion for Q1 2024, a slight increase from $1.06 billion in the same period last year.

The revenue growth was fueled by a 6% year-over-year increase in Global Lottery revenue, which reached $661 million. This rise was attributed to higher product sales, particularly from GameTouch™ 28 terminals in Canada and software upgrades in Singapore and Germany.

Operating income stood at $256 million, consistent with the prior year, but excluding separation and divestiture costs, it increased to a record $273 million. This resulted in an improved operating income margin of 25.6%.

Sector Performance

The Global Lottery segment saw an 8% rise in operating income to $258 million, bolstered by strong same-store sales in Italy and high product sales margins. In contrast, the Gaming & Digital segment reported a 7% decline in revenue to $406 million, primarily due to fewer terminal shipments and a drop in intellectual property and software license sales compared to the previous year. However, the segment’s operating income margin expanded by 80 basis points to 20%, reflecting improved R&D processes and supply chain cost reductions.

IGT continues to progress on separating its Global Lottery division from Gaming & Digital, preparing for a proposed transaction with Everi Holdings, Inc. This move is part of a broader strategy to streamline operations and focus on core strengths.

The company also announced several key achievements and initiatives:

• Winning top honors at the ICE London 2024 awards, including “Lottery Product of the Year.”
• Securing a supply contract extension with the UK National Lottery.
• Launching the Cash Pop™ draw-based game in Maryland through a licensing agreement.
• Introducing iGaming content in Rhode Island and providing PeakDual™ 27 video lottery terminals in Quebec.

Financial Position and Outlook

CFO Max Chiara emphasized IGT’s strong financial position. “We delivered a record organic profit performance in the first quarter, if we exclude Separation & divestiture costs. The Company is operating from a position of strength with historically low net debt leverage, ample liquidity, and manageable near-term debt maturities,” he said.

For the second quarter of 2024, IGT expects revenue of approximately $1.05 billion and an operating income margin of about 22%, or 24.5% excluding separation and divestiture costs.

For the full year, the company forecasts revenue around $4.4 billion, with an operating income margin of 21%, or 24% excluding separation and divestiture costs. Cash from operations is projected to be at least $1 billion, with capital expenditures of approximately $500 million.