Global gaming giant International Game Technology (IGT) has revealed its financial performance for the second quarter, reporting a total income of $1.05 billion (£825.3 million/€961.1 million). This positive outcome has prompted the company to revise its financial projections for the entirety of 2023, indicating an optimistic outlook.
The company’s revenue for the second quarter showed a modest increase of 3.3% compared to the same period last year. This growth aligns closely with the $1.06 billion reported in the first quarter.
IGT’s Global Lottery division generated the largest share of revenue, contributing $624 million. While this figure represents a slight decline from the $648 million achieved in the second quarter of the previous year, the Global Gaming segment experienced a notable 13.0% surge in revenue, reaching $373 million.
The remaining portion of the quarter’s revenue, amounting to $59 million, was attributed to PlayDigital.
IGT’s chief executive, Vince Sadusky, attributed the positive revenue growth to strategic initiatives implemented during the first half of the year, ending on June 30.
“Our performance in the second quarter and the first six months of the year demonstrates robust revenue and profit growth across all of our business units,” Sadusky stated. “By successfully executing key strategic plans and meeting the increasing demand for IGT’s engaging content and solutions, we are exceeding our initial expectations.”
The company emphasized its collaboration with the Connecticut Lottery as a key strategic initiative that has contributed to its success.
The firm also disclosed the validation of a two-decade agreement to run immediate and passive lottery games in Minas Gerais, Brazil, which was revealed in June.
Before the conclusion of the quarter, IGT expanded its long-term collaboration with the Belgian National Lottery. In April, the firm extended its gaming partnership with the Rhode Island Lottery.
Sadusky stated that IGT is “making steady progress” toward its 2025 objectives. Meanwhile, IGT’s Chief Financial Officer, Max Chiara, declared that the operator is increasing its full-year 2023 revenue projections.
“We have a strong foundation to continue investing in our growth targets, further decrease debt and return capital to investors,” Chiara stated. “Based on our first-half performance, we are confident in raising our full-year 2023 revenue and operating profit expectations.”
“Strategic Options for Global Lottery and PlayDigital”
On June 8, IGT announced it was considering “strategic options” for its Global Lottery and PlayDigital divisions. This could lead to the sale, merger, or separation of these divisions.
At the time, IGT emphasized that there was no schedule for the decision.
The firm also mentioned that the process could conclude with IGT retaining Global Lottery and PlayDigital and continuing to invest in those divisions.
Second-Quarter Revenue Breakdown
Broken down further by segment, Global Lottery revenue was primarily driven by service revenue, totaling $588 million.
Income was generated through management contracts, the gradual reduction of licensing fees, and additional services. The remaining $35 million was derived from product sales.
Worldwide gaming operations revenue (including hardware and software) reached $188 million. Product sales revenue amounted to $185 million.
Sales of gaming machines also experienced growth, reaching a total of 8,269 units. This signifies a 14.9% increase compared to the same period in the previous year, with the majority (6,324 units) sold in the United States and Canada.
Geographically, revenue from the United States and Canada reached $650 million, representing an 11.1% year-on-year increase. Revenue from Italy amounted to $240 million, exhibiting a 16.6% decrease. This decline is likely a consequence of the ongoing impact of the sale of IGT’s adjacent payment business in September 2022.
Revenue from other regions totaled $164 million, reflecting a 10.8% increase.
IGT’s Second Quarter Earnings
Among operating expenses, the most significant cost stemmed from services, totaling $402 million. Research and development expenditures amounted to $211 million. The cost of goods sold for products was $131 million, while expenses incurred for R&D were $60 million.
Total operating expenses for the quarter reached $805 million, marking a 1.5% increase. This resulted in an operating profit of $251 million, representing a 10.0% year-on-year increase.
Non-operating expenses amounted to $75 million. After paying $86 million in income taxes, net income for the quarter was $90 million, nearly triple the $34 million net income recorded in the second quarter of 2022.
EBITDA and Fiscal Year 2023 Projections
Modified earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $443 million in the current quarter, a 5.8% increase from the same period last year.
IGT now projects full-year income to be between $4.2 billion and $4.3 billion, exceeding its earlier prediction of $4.1 billion to $4.2 billion for fiscal year 2023, which was presented in its fiscal year 2022 earnings report.
First Half Breakdown
Total income in the first six months was $2.11 billion, a 2.1% increase from the same period last year.
Total operating expenditures in the first six months were $1.61 billion, a 1.1% increase from the same period last year. As is typical, the services division saw the highest spending at $800 million. Sales, general, and administrative expenses totaled $428 million, while the cost of goods sold was $258 million.
Research and development costs accounted for the remaining $122 million.
Operating costs resulted in an operating profit of $506 million.
After non-operating costs of $176 million and income taxes of $173 million, net profit for the first six months totaled $157 million, a 4.0% increase from the same period last year.
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