IGT raises 2023 revenue and profit outlook after ‘solid’ Q2 financials

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IGT is raising its full-year revenue and profit outlook on the back of its first half of 2023 performance, which includes a “solid” second quarter where several key figures demonstrated improvement.

Publishing its Q2 results, the gaming company reported a three per cent year-over-year increase in revenue to $1.06bn (Q2 2022: $1.02bn), level with what was earned during the first quarter of the year.

IGT revenue gains in gaming and digital

Revenue gains were once again seen in the group’s Global Gaming and PlayDigital segments. Gaming rose by 13 per cent YoY to $373m (2022: $330m) while the latter grew by 38 per cent to $59m (2022: $43m).

Gaming revenue was supported by demand for products, as global installs improved by nine per cent and global unit shipments increased by 15 per cent including record shipment amounts in the US and Canada.

PlayDigital growth was supported by an expansion of omnichannel and digital jackpot offerings, including contributions from iSoftBet, a 38 per cent uptick in North America GGR, robust Canadian growth and sports betting improvements.

IGT also stated that OPtiMa-related cost reduction initiatives have transformed the business into a more efficient and profitable organisation, adding that a “more structured approach to software development and multi-year licensing agreements requires capitalisation of certain costs per US GAAP”, mainly impacting gaming but will also have a small impact on PlayDigital.

Global Lottery had revenue declines once more compared to the previous year, falling by four per cent to $624m (2022: $648m). Removing comparisons involved in the net sale of its Italian commercial services in September last year, revenue rose by 8 per cent YoY.

However, the company described the lottery performance as “solid”, driven by same-store sales growth in Italy, which rose by eight per cent, and LMA incentives. Global same-store sales only improved by two per cent with North America and Rest of world stable despite lower jackpot activity.

Vince Sadusky, CEO of IGT, commented: “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.”

Full year 2023 outlook raised

IGT’s Q2 operating income came in at $251m, up 10 per cent YoY (2022: $228m) with an operating income margin of 23.8 per cent (2022: 22.3 per cent).

Lottery operating income remained flat at $229m (2022: $230m) following the Italy same-store sales performance, while gaming rose by 25 per cent to $71m (2022: $57m) and PlayDigital increased by 125 per cent to $18m (2022: $8m).

Adjusted EBITDA during the quarter improved by eight per cent YoY to $443m (2022: $409m), net income rose to $90m (2022: $34m), while net debt fell by six per cent to $5.36bn (2022: $5.72bn).

As a result of solid Q2 trading, IGT has raised its full-year 2023 outlook with revenue projected to be between $4.2bn and $4.3bn, with an operating income margin of 23 per cent, cash from operations of $900m to $1bn and capital expenditures of $400m to $450m.

In Q3, the company also expects revenue of approximately $1bn and an operating income margin of 22 per cent to 23 per cent.

“Our year-to-date performance showcases the strong cash generation of the business. 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,” added Max Chiara, the group’s CFO. 

“Based on our first-half results, we are confidently raising our full-year 2023 revenue and operating margin outlook.”