Global gaming giant International Game Technology (IGT) has unveiled its financial performance for the second quarter, revealing a robust revenue figure of $1.05 billion (£825.3 million/€961.1 million). This positive outcome has prompted the company to revise its revenue projections for the entirety of 2023.
Revenue for the second quarter exhibited a modest increase of 3.3% when compared to the same period in the previous year. However, this growth was relatively stagnant when juxtaposed against the $1.06 billion recorded in the first quarter.
IGT’s global lottery operations emerged as the primary revenue driver, contributing a substantial $624 million during the quarter. While this figure represents a slight dip from the $648 million generated in the corresponding period of the prior year, global gaming revenue experienced a notable surge of 13.0%, reaching $373 million.
The remaining portion of the quarter’s total revenue was attributed to PlayDigital, which generated $59 million.
IGT’s chief executive, Vince Sadusky, attributed the revenue expansion to strategic initiatives implemented during the six-month period concluding on June 30.
Sadusky emphasized, “Our second-quarter and first-half results demonstrate vigorous revenue and profit growth across all business segments. By executing key strategic initiatives and effectively addressing the market’s escalating demand for IGT’s captivating content and solutions, we have successfully attained our objectives.”
The company underscored its collaboration with the Connecticut Lottery as a pivotal strategic initiative.
The firm also highlighted that a two-decade agreement unveiled in June will oversee the instant and passive lottery in Minas Gerais, Brazil.
IGT extended its long-term collaboration with the Belgian National Lottery before the quarter concluded. In April, it expanded its betting partnership with the Rhode Island Lottery.
Sadusky added that IGT is “making consistent progress” toward its 2025 objectives. Meanwhile, IGT Chief Financial Officer Max Chiara revealed that the company is increasing its full-year 2023 revenue projections.
“We have a solid base to continue investing in our growth goals, 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 margin expectations.”
“Strategic alternatives” for Global Gaming and PlayDigital
On June 8, IGT announced that it was considering “strategic alternatives” for its Global Gaming and PlayDigital divisions. This could result in the sale, merger, or divestment of these divisions.
At the time, IGT emphasized that there was no set timeline for the decision.
The company also stated that the process could end with IGT retaining Global Gaming and PlayDigital and continuing to invest in these divisions.
Second-quarter revenue breakdown
Breaking down further by segment, Global Lottery revenue was primarily driven by service revenue, reaching $588 million.
Earnings from services encompass management agreement income, the gradual reduction of license fees, and miscellaneous service earnings. The remaining $35 million originated from product sales.
Globally, service revenue, encompassing terminals and software, reached $188 million. Product sales generated $185 million in revenue.
Sales of gaming machines also saw growth, reaching 8,269 units. This represents a 14.9% increase from the same period last year, with the majority (6,324 units) sold in the United States and Canada.
Geographically, the United States and Canada contributed $650 million in revenue, a rise of 11.1% year-on-year. Revenue from Italy amounted to $240 million, a decrease of 16.6%. This decline is likely due to the ongoing effects of IGT’s divestment of its adjacent payment business in September 2022.
Revenue from the rest of the world totaled $164 million, an increase of 10.8%.
IGT’s Second Quarter Financial Results
Examining operating expenses, service expenses were the highest, totaling $402 million. Research and development expenditures amounted to $211 million. The cost of product sales was $131 million, while expenses incurred from research and development were $60 million.
Total operating expenses for the quarter were $805 million, a rise of 1.5%. This resulted in operating income of $251 million, an increase of 10.0% year-on-year.
Non-operating expenses totaled $75 million. After paying $86 million in income taxes, net income for the quarter was $90 million, nearly triple the net income of $34 million in the second quarter of 2022.
EBITDA and Fiscal Year 2023 Projections
Modified earnings before interest, taxes, depreciation, and amortization (EBITDA) hit $443 million this quarter, a rise of 5.8% annually.
IGT presently anticipates full-year income to be between $4.2 billion and $4.3 billion. This is a boost from its FY23 income projection of $4.1 billion to $4.2 billion, which was forecasted in its FY22 outcomes.
First-Half Breakdown
Total income for the first half of the year was $2.11 billion, an increase of 2.1% annually.
Total operating expenditures for the first half of the year were $1.61 billion, an increase of 1.1% annually. As usual, the service sector had the highest costs, reaching $800 million. Sales, general, and administrative expenses reached $428 million, while the cost of goods sold was $258 million.
Research and development expenses accounted for the remaining $122 million.
Operating expenditures resulted in an operating profit of $506 million.
After non-operating expenditures of $176 million and income taxes of $173 million, net profit for the first half of the year totaled $157 million, an increase of 4.0% annually.
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