IGT posts over $1 billion revenue for Q2, raises full-year outlook

International Game Technology (IGT) has reported its financial results for the second quarter of the year, showing robust revenue and profit momentum across all business segments. IGT's consolidated revenue for Q2 2023 reached $1.06 billion, representing a 3% growth compared to the previous year. 

Notably, when accounting for the Italy commercial services sale in September 2022, revenue surged by 11%. This performance came as a result of IGT's strategic initiatives and growing market demand for its gaming and lottery solutions, the company noted.

IGT also reported an operating income of $251 million, representing a 10% increase from the prior year. The operating income margin also expanded by 150 basis points to 24%, showcasing the company's improved operational efficiency. Diluted earnings per share came at $0.23, a significant improvement from the loss per share of $0.02 in the prior year.

Meanwhile, revenue for the first half of the year totaled $2.11 billion, a rise of 2.1%. Operating expenses for H1 amounted to $1.61 billion for the first six months of the year, a slight rise of 1.1%. The services segment generated the highest expense, at $800 million.

Vince Sadusky, the CEO of IGT, stated: "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."

Vince Sadusky, CEO of IGT

Breaking down the revenue by segment, IGT's Global Lottery segment generated $624 million, showing a 4% decline year-over-year. However, after considering the Italy commercial services sale, the segment's revenue increased by 8%.

This growth was fueled by strong same-store sales in Italy, the execution of a multi-year software licensing agreement for a lottery central management system, and higher LMA incentives.

Global Gaming, another key segment for IGT, saw remarkable growth, with revenue reaching $373 million, a significant 13% increase from $330 million in the prior year. The surge was driven by record U.S. & Canada unit shipments, higher global average selling prices, growth in the installed base across various regions, and robust system sales.

PlayDigital, IGT's digital gaming division, also experienced a notable upswing, with revenue soaring by 38% to $59 million, up from $43 million in the prior year. This growth was attributed to strong player demand trends and contributions from IGT's acquisition of iSoftBet.

Max Chiara, the CFO of IGT, expressed confidence in the company's financial position, stating: "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."

Based on the strong first-half results, IGT raised its full-year 2023 revenue and operating margin outlook. IGT provided its third-quarter and full-year 2023 expectations, with a revenue projection of approximately $1 billion for Q3 and a 2023 revenue outlook of $4.2 billion to $4.3 billion, alongside an operating income margin of approximately 23%.

In terms of operational achievements, during Q2, IGT secured a 10-year brand licensing extension with Sony Pictures Television, granting the company exclusive rights to the legendary Wheel of Fortune brand across various gaming segments. Additionally, IGT was awarded a 20-year license, as part of a consortium, to operate certain lottery games for the Minas Gerais State Lottery in Brazil.

IGT Wheel of Fortune

The company's commitment to innovation was further strengthened with the launch of the first-ever omnichannel Wheel of Fortune jackpot game in the U.S. and the exclusively digital MegaJackpots games in Alberta. Moreover, IGT expanded its omnichannel Powerbucks games to Alberta, building on its successful performance in other Canadian provinces.

Regarding the company's debt management, IGT reported a net debt of $5.4 billion compared to $5.2 billion at the end of 2022. The net debt leverage ratio remained stable at 3.1x, in line with the previous year.

During the quarter, IGT also announced that its Board of Directors is exploring strategic alternatives for its Global Gaming and PlayDigital segments, "aiming to unlock the full value of its portfolio." The company is considering various options, including the sale, merger, or spin-off of these segments.

Access IGT's full Q2 report here.