International Game Technology (IGT) has released its comprehensive financial results for Q3 2024, ending September 30, detailing a mixed performance marked by revenue contractions, operational shifts, and strategic restructuring. As the company navigates economic pressures and industry evolution, understanding these financial figures offers insight into IGT’s future trajectory and resilience.

International Game Technology (IGT) Unveils Q3 2024 Financial Report

Revenue Overview: 2% Decline Compared to Q3 2023

IGT’s total revenue for Q3 2024 came to $587 million, reflecting a 2% decline when compared to the $599 million recorded in Q3 2023. This drop underscores the complex dynamics at play within the global lottery and gaming markets.

One of the primary contributors to revenue was instant ticket services, which saw a modest increase of 1% to $477 million. This growth, however, was not sufficient to counterbalance declines in other revenue streams. Notably, US multi-state jackpot wager-based revenue experienced a steep 56% drop, landing at $21 million, signaling challenges within this high-value sector. Additionally, upfront license fees showed a significant downturn, recorded at a negative $48 million, further impacting the company’s overall revenue.

Geographical Performance: Divergent Regional Results

IGT’s Q3 report also breaks down revenue by geographical regions, presenting a clearer picture of how different markets influenced the overall financial outcome.

• US and Canada: Revenue from these regions fell 7% to $284 million, indicating headwinds in North America.
• Italy: In contrast, Italy demonstrated a strong performance, with revenue increasing 5% to $228 million, highlighting the region’s steady growth as a robust source of income for the company.
• Rest of the World: Revenue from global operations outside of North America and Italy declined 3% to $75 million, reflecting wider economic challenges and variable performance across international markets.

Operating Income and Profit Analysis

IGT’s operating income for Q3 2024 stood at $110 million, representing a substantial 33% decrease from the previous year. The decline in operating income can be attributed to increased growth-oriented investments and the comparative strength of terminal sales in the same period last year.

Total gross profit fell 5% to $263 million, with the company attributing this decline to a mix of higher strategic investments and lower legal costs in the current quarter. These factors, combined with reduced jackpot-related revenue, shaped the overall profit landscape.

Net Cash and Adjusted EBITDA

Net cash provided by operating activities reached $173 million, reflecting a 23% decline compared to Q3 2023. This decrease indicates tighter financial liquidity, influenced by operational expenditures and other cash flow management activities.

IGT’s Adjusted EBITDA was reported at $264 million, down 6% from the previous year’s quarter. The adjusted EBITDA margin stood at 44.9%, showcasing IGT’s efforts to maintain robust profitability margins amid fluctuating revenue streams and increased investments.

Strategic Sales and Corporate Restructuring

A significant development during this quarter was IGT’s announcement on July 26 regarding the sale of its Gaming & Digital divisions to Apollo Funds for $4.1 billion in cash. This strategic divestment underscores IGT’s focus on optimizing its core lottery business and positioning itself as a leaner organization capable of seizing new growth opportunities. The sale is expected to strengthen the company’s financial foundation and redirect resources toward enhancing its primary lottery operations.

Loss from Continuing Operations

IGT’s Q3 report revealed a loss from continuing operations amounting to $46 million, a stark contrast to the $77 million income reported in Q3 2023. This shift highlights the financial strain induced by operational changes and market pressures, affecting the bottom line.

Executive Commentary and Strategic Vision

Vince Sadusky, CEO of IGT, provided insight into the company’s performance and strategic initiatives, stating: “Our third quarter and year-to-date performance underscores the strength and resilience of our business model marked by our scale, attractive margin structure, and strong cash generation. Over the first nine months, we generated $1.9 billion in revenue, led by steady Italy growth and improved third-quarter trends in the US. We are excited to build upon a solid foundation as we transform into a leaner, more focused global lottery pure play and capitalize on attractive industry dynamics.”

Nine-Month Overview: Incremental Revenue Growth

When examining the first nine months of 2024, IGT reported a slight increase in total revenue from $1.85 billion in 2023 to $1.86 billion in 2024. This incremental growth highlights the company’s capacity to maintain revenue stability amid sectoral challenges.

Max Chiara, CFO of IGT, highlighted the sustained cash flow performance: “Sustained cash flow generation in the first nine months was predominantly driven by continuing operations. The value of IGT is enhanced on a go-forward basis by a low pro forma leverage profile and by the launch of a cost optimization initiative as we look to right size the organization while supporting long-term growth initiatives.”

Cost Optimization and Future Growth Prospects

IGT’s ongoing cost optimization initiatives aim to streamline operations, reduce unnecessary expenditure, and align the company’s cost structure with future revenue generation capabilities. The company’s pivot towards a more streamlined model focuses on leveraging core strengths in lottery services while minimizing exposure to more volatile gaming sectors.

Looking ahead, IGT is set to build on its foundation of innovative lottery solutions and strategic market positioning. By adopting a leaner structure and focusing on high-margin business areas, the company aims to drive long-term value for shareholders and enhance its global market presence.

Conclusion: The Financial Results

Despite a challenging Q3 marked by revenue declines and strategic restructuring, International Game Technology (IGT) remains steadfast in its vision to solidify its position as a leading player in the global lottery industry. While the company navigates financial headwinds and transformative changes, the emphasis on strong cash flow, cost efficiency, and targeted growth initiatives sets a course for resilient future performance.

FAQs About IGT’s Q3 2024 Financial Report

1. What was IGT’s total revenue for Q3 2024?

IGT’s total revenue for Q3 2024 was $587 million, a 2% decline compared to $599 million in Q3 2023.

2. Which segment of IGT’s revenue showed growth in Q3 2024?

Instant ticket services showed a 1% increase, contributing $477 million to the revenue.

3. What was the reason for the significant drop in US multi-state jackpot revenue?

US multi-state jackpot wager-based revenue fell by 56% to $21 million, contributing to the overall revenue decline.

4. How did IGT perform in different geographical regions during Q3 2024?

Revenue in the US and Canada fell by 7% to $284 million, Italy’s revenue rose by 5% to $228 million, and revenue from other international markets dropped 3% to $75 million.

5. What was IGT’s operating income for Q3 2024?

IGT’s operating income for Q3 2024 was $110 million, a 33% decrease from the same period in the previous year.

6. How did net cash flow from operating activities change compared to Q3 2023?

Net cash provided by operating activities was $173 million, reflecting a 23% decline compared to Q3 2023.

7. What strategic action did IGT take during Q3 2024?

IGT announced the sale of its Gaming & Digital divisions to Apollo Funds for $4.1 billion in cash to focus on its core lottery business.

8. What was the profit situation for IGT in Q3 2024?

IGT reported a loss from continuing operations of $46 million, compared to a $77 million income in Q3 2023.

9. How did IGT’s Adjusted EBITDA fare in Q3 2024?

Adjusted EBITDA was $264 million, representing a 6% decline from the previous year, with an adjusted EBITDA margin of 44.9%.

10. What were the key remarks from IGT’s CEO, Vince Sadusky, about the quarter?

Vince Sadusky highlighted the resilience of IGT’s business model, steady growth in Italy, and improved trends in the US as foundational strengths for future transformation.

11. What did CFO Max Chiara say about cash flow and future initiatives?

Max Chiara noted that sustained cash flow was driven by continuing operations and emphasized IGT’s cost optimization plans to support long-term growth.

12. What are IGT’s future growth prospects?

IGT plans to streamline operations through cost optimization and focus on its core lottery services to enhance shareholder value and strengthen its market position.