IGT has reported a consistent start to 2024 as growth to Global Lottery was partially offset by the timing of Gaming & Digital product sales.
As a result of its first quarter results, the company has upgraded its full-year 2024 revenue and profit outlook, in addition to further progress towards its Gaming & Digital business transaction with Everi Holdings.
Gaming & Digital offsets Global Lottery growth
Publishing its Q1 financials, IGT declared a group revenue of $1.07bn, up one per cent in comparison to the same period last year (Q1 2023: $1.06bn), as the timing of Gaming & Digital product sales partially offset strong Global Lottery growth.
Gaming & Digital revenue fell by seven per cent year-over-year to $406m (2023: $436m) following lower product sales as there were “fewer terminal unit shipments in the current year and elevated intellectual property and software licences in the prior year, partially offset by higher service revenue driven by growth in the global installed base, which more than offset lower yields and a 10 per cent increase in igaming revenue”.
Global Lottery revenue improved by six per cent YoY to $661m (2023: $624m) after higher product sales, driven by the “delivery of GameTouch 28 self-service terminals in Canada and software upgrades in Singapore and Germany and continued same-store sales strength in Italy”.
IGT’s Q1 operating income was in line with the same period the previous year at $256m (2023: $255m), with a margin of 24 per cent (2023: 24.1 per cent). Excluding separation & divestiture costs, operating income increased by seven per cent to a record $273m with a margin of 25.6 per cent.
Gaming & Digital operating income dropped by three per cent to $81m (2023: $83m) as research and development process gains and easing of supply chain costs were offset by lower revenue and additional investments in the business.
Global Lottery operating income improved by eight per cent YoY to $258m (2023: $240m) on the back of strong Italy same-store sales and higher product sales margin. Corporate support and other expenses stood at $83m (2023: $68m) due to separation and divestiture costs of $18m.
The group’s adjusted EBITDA stood at $443m (2023: $449m) at the end of the quarter with a margin of 41.5 per cent (2023: 42.3 per cent). Excluding separation & divestiture costs, adjusted EBITDA stood at $461m with a margin of 43.1 per cent.
As of March 31, IGT’s free cash flow had dropped by 86 per cent YoY to $29m (2023: $216m), while net debt stayed consistent at $5.2bn (2023: $5.1bn).
“We delivered a record organic profit performance in the first quarter, if we exclude separation & divestiture costs,” stated Max Chiara, CFO of IGT.
“The company is operating from a position of strength with historically low net debt leverage, ample liquidity, and manageable near-term debt maturities.”
Upgraded 2024 outlook
As previously mentioned, following Q1, IGT has upgraded its full year 2024 outlook and has introduced its expectations for Q2.
For Q2, the company expects revenue of around $1.05bn with an operating income margin of approximately 22 per cent, or 24.5 per cent excluding separation and divestiture costs.
For the full year, IGT has upgraded its guidance to revenue of approximately $4.4bn with an operating income margin of around 21 per cent, or 24 per cent excluding separation and divestiture costs.
Cash from operations is expected to be below $1bn, while capital expenditures are expected to be around $500m.
Vince Sadusky, CEO of IGT, added: “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.”