International Game Technology reported revenue of $1.005bn for the second quarter (PS825.3m/EUR961.1m), prompting the operator’s to raise its revenue forecast for 2023.
The second quarter revenue increased by 3.3% when compared with Q2 2022. was largely the same as Q1 revenue of $1.06bn.
IGT’s Global Lottery Segment, which generated $624m in revenue, was the largest contributor to its overall revenue. Global Gaming revenue grew 13.0%, to $373.0m. This was lower than the $648m generated in Q2 of last year by the same segment.
PlayDigital’s $59m revenue accounted for the remainder of the total for the third quarter.
Vince Sadusky CEO of IGT stated that the strategic initiatives implemented throughout the six-month period to 30 June were the driving force behind the increase in revenue.
Sadusky said, “Our results for the second quarter and first half reflect a solid revenue and profitability momentum across all segments.” We achieved our high-end outlook by executing strategic initiatives, and increasing demand for IGT’s compelling content and solution.
The operator cited its partnership, with the Connecticut Lottery, as one of key strategic initiatives. The operator also noted that a 20-year agreement to operate an instant and passive lotteries in Minas Gerais in Brazil was confirmed in June.
IGT has extended its partnership with the Belgian National Lottery just before the end of the third quarter. In April, expanded its betting partnership with Rhode Island Lottery.
Sadusky also added that IGT “is on track” to achieve its 2025 goals. Max Chiara revealed that IGT’s CFO, Max Chiara has raised the company’s revenue forecast for 2023.
Chiara said, “We have an excellent foundation on which to build as we continue investing in our growth goals, reduce debt further, and return capital back to shareholders.” We are confidently increasing our revenue and operating margin forecast for 2023 based on our first-half performance.
Global Gaming and PlayDigital have “Strategic Alternatives”
IGT announced on 8 June that it was evaluating “strategic options” for its Global Gaming segment and PlayDigital segment . The segments could be sold, merged, or spun off.
IGT stated at the time that this decision is not subject to a deadline.
The company also stated that the process could end with IGT keeping Global Gaming and PlayDigital, and continuing to invest into the segments.
Revenue breakdown for Q2
Global Lottery revenues are largely made up of service revenue. This totals $588m. The service revenue is made up of revenue from contract management, licence fee amortisation, and other services. The remaining 35m was from product sales.
Global Gaming’s service revenue, which includes terminals and software, totaled $188 million. Product sales revenue totaled $185m.
This segment also saw an increase in the number of gaming machines sold, totaling 8,269. The increase was 14.9%. Most of the 6,324 units were sold in North America and the US.
Location-wise, 650m dollars of revenue were generated in the US and Canada. This represents an increase of 11.1% on a year-over-year basis. The revenue from Italy was $240m. This is a 16.6% decrease. This decline is most likely the result of IGT selling its proximity payment business to in September 2022.
The rest of the world’s revenue totaled $164m, an increase of 10.8%.
IGT Q2 bottom-line
Services accounted for the largest portion of operating costs, totaling $402m. The total cost of research and development was $211m. The cost of sales for products was $131m while the research and development expenses were $60m.
The total operating costs for the third quarter were $805m and increased by 1.5%. Operating income increased by 10.0% to $251m.
The total non-operational expenses amounted to $75m. After income taxes of $86m the net profit for the quarter reached $90m. This is almost triple what it was in Q2 2022, when the net income was $34m.
EBITDA projections for FY23
The adjusted earnings before interest tax, depreciation, and amortization (EBITDA), which totalled $443m in the third quarter, was up 5.8%.
IGT expects its revenue to range between $4,20bn and $4,530bn for the entire year. The FY23 revenue forecast of $4.10bn – $4.20bn was projected in the FY22 results.
H1 Break down
The total revenue for the first six months of the year was $2.11bn. This represents a 2.1% increase.
The total operating expenses in H1 were $1.61bn, an increase of 1.1%. Services generated the largest expense of $800m, as is usual. Selling, general, and administrative costs totaled $428m while product sales cost was $258m.
The remaining $122m was spent on research and development.
Operating expenses brought operating income up to $506m.
After non-operating costs of $176m and income tax of $173m, total net profit for H1 increased by 4.0% to $157m.