International Game Technology (IGT) has unveiled its financial results for the second quarter of 2024, revealing mixed performance across its various sectors. The total revenue for the quarter was just shy of $1.05 billion, reflecting a year-on-year decline of 1%. Despite challenges, the company’s Gaming & Digital segment demonstrated resilience with growth, offsetting some of the declines seen in other areas.
IGT Releases Financial Figures for Q2 2024
Revenue Breakdown
Global Lottery Performance
Global Lottery, a significant component of IGT’s portfolio, experienced a 2% drop in revenue, bringing in $613 million for the quarter. This decline is primarily attributed to a multi-year software licence sale in the prior year, which had inflated the previous year’s figures. Despite this setback, Global Lottery remains a cornerstone of IGT’s operations, continuing to generate substantial revenue.
Gaming & Digital Growth
In contrast to the decline in Global Lottery, the Gaming & Digital segment saw a 1% increase in revenue, reaching $436 million. This growth is driven by the expansion of the installed base, although it was somewhat tempered by lower terminal unit shipments. The resilience of Gaming & Digital highlights the strategic investments IGT has made in technology and game content, paving the way for future growth.
Operating Income and Expenses
Total Operating Income Decline
The total operating income for the quarter was valued at $230 million, marking an 8% decline compared to the same period last year. This decrease reflects the challenges faced by the Global Lottery segment, which saw an 8% drop in operating income to $212 million. Despite these challenges, the Gaming & Digital segment reported a robust 16% increase in operating income, reaching $103 million.
Corporate Support Expense Reduction
IGT made significant strides in reducing its corporate support expenses, which dropped by 67%, resulting in an operating loss of $51 million. This reduction is part of the company’s broader efforts to streamline operations and enhance efficiency. However, other expenses increased by 8%, remaining at a loss of $35 million.
EBITDA and Net Debt
Adjusted EBITDA
Total adjusted EBITDA for the quarter was $420 million, representing a 5% decline year-on-year. This decrease is indicative of the broader challenges faced by the company, despite the growth seen in the Gaming & Digital segment. Adjusted EBITDA remains a critical measure of IGT’s underlying operational performance, reflecting its ability to generate earnings before interest, taxes, depreciation, and amortisation.
Net Debt Reduction
IGT also achieved a 5% reduction in net debt, bringing the total down to $5.11 billion. This reduction in debt highlights the company’s commitment to improving its balance sheet and enhancing financial stability. The decrease in net debt is particularly significant in light of the company’s recent strategic moves, including divestitures and acquisitions.
Strategic Acquisitions and Divestitures
Apollo Funds Acquisition
The financial results for the quarter come on the heels of significant news regarding Apollo Funds’ acquisition of IGT’s Gaming and Digital business. This move is part of IGT’s broader strategy to streamline its operations and focus on core areas of growth. The sale, valued at $4.05 billion in cash, underscores the intrinsic value of IGT’s Gaming & Digital business and its potential for future growth.
Merger with Everi
In addition to the acquisition by Apollo Funds, IGT has decided to merge its gaming and digital vertical with Everi. This merger aims to create a more robust and competitive entity, leveraging the strengths of both companies to drive growth and innovation in the gaming industry. The merger is expected to unlock significant synergies and enhance the combined entity’s market position.
Executive Commentary
CEO Vince Sadusky’s Insights
IGT CEO Vince Sadusky highlighted the company’s strong first-half results, including record operating income and adjusted EBITDA, net of separation and divestiture costs. He emphasised the importance of consistent investments in technology, game content, and innovative solutions, which provide a solid foundation for future growth. Sadusky described the sale of the Gaming & Digital business as a pivotal step in unlocking IGT’s intrinsic value.
CFO Max Chiara’s Financial Outlook
IGT CFO Max Chiara provided additional insights, noting that the company generated over $460 million in cash from operations in the first half of the year. He highlighted the company’s strong balance sheet, ample liquidity, and manageable near-term debt maturities, which provide significant flexibility for upcoming investments. Chiara reiterated the company’s focus on extending and securing its long-term lottery contract portfolio.
Conclusion: The Financial Results
IGT’s financial results for the second quarter of 2024 reflect a period of transition and strategic realignment. While facing challenges in the Global Lottery segment, the company demonstrated resilience and growth in Gaming & Digital. The recent acquisition by Apollo Funds and the merger with Everi position IGT for a promising future, driven by technological innovation and strategic investments.
FAQs About IGT’s Financial Figures for Q2 2024
1. What was IGT’s total revenue for the second quarter of 2024?
IGT’s total revenue for the second quarter of 2024 was just shy of $1.05 billion, reflecting a year-on-year decline of 1%.
2. How did the Global Lottery segment perform in Q2 2024?
The Global Lottery segment experienced a 2% drop in revenue, bringing in $613 million. This decline was primarily due to a multi-year software licence sale in the prior year.
3. What was the revenue growth for the Gaming & Digital segment?
The Gaming & Digital segment saw a 1% increase in revenue, reaching $436 million. This growth was driven by the expansion of the installed base, though offset by lower terminal unit shipments.
4. How did IGT’s total operating income change compared to last year?
IGT’s total operating income for the quarter was valued at $230 million, marking an 8% decline compared to the same period last year.
5. What were the changes in corporate support expenses?
IGT reduced its corporate support expenses by 67%, resulting in an operating loss of $51 million.
6. What was IGT’s total adjusted EBITDA for Q2 2024?
IGT’s total adjusted EBITDA for the quarter was $420 million, representing a 5% decline year-on-year.
7. How much did IGT’s net debt decrease by?
IGT’s net debt decreased by 5%, bringing the total down to $5.11 billion.
8. What significant acquisitions and divestitures were recently announced by IGT?
IGT announced the sale of its Gaming & Digital business to Apollo Funds for $4.05 billion in cash. Additionally, IGT decided to merge its gaming and digital vertical with Everi.
9. What did IGT CEO Vince Sadusky say about the company’s performance?
IGT CEO Vince Sadusky highlighted the company’s strong first-half results, record operating income, and adjusted EBITDA net of separation and divestiture costs. He emphasized consistent investments in technology, game content, and innovative solutions as a foundation for future growth.
10. What did IGT CFO Max Chiara comment on the financial outlook?
IGT CFO Max Chiara noted that the company generated over $460 million in cash from operations in the first half of the year. He emphasized the strong balance sheet, ample liquidity, and manageable near-term debt maturities, providing significant flexibility for upcoming investments.
11. How is IGT planning to use the revenue from the sale of its Gaming & Digital business?
The revenue from the sale will be used to unlock the intrinsic value of IGT’s best-in-class businesses and support future growth initiatives.
12. What are IGT’s strategic priorities moving forward?
IGT’s strategic priorities include leveraging technological innovations, expanding its installed base, and securing long-term lottery contract portfolios.
13. How will the merger with Everi benefit IGT?
The merger with Everi aims to create a more robust and competitive entity, leveraging the strengths of both companies to drive growth and innovation in the gaming industry.
14. What measures has IGT taken to improve operational efficiency?
IGT has reduced corporate support expenses and net debt, streamlined operations, and enhanced financial stability to improve operational efficiency.
15. How does IGT view its long-term prospects?
IGT remains focused on leveraging its strengths, capitalising on emerging opportunities, and driving long-term growth and financial stability in the evolving gaming industry.
