IGT reported growth in its global gambling and PlayDigital verticals during its fourth quarter and full-year 2022 financial statements. This was due to strong player demand as well as operating leverage.
CEO Vince Sdusky commented on the results and said that IGT was successful in achieving all its financial goals last year. He also noted that IGT enters 2023 “from a position that is strong with momentum across all business segments.”
A strong year has allowed CFO Max Chiara to confirm that the company was able “reduced debt and leverage to their lowest levels ever.”
IGT Global Gaming strong player demand spurs growth
IGT published its financials and reported a Q4 total revenues of $1.09bn. This is a 4 per cent increase over the previous year (Q4 2021: 1.05bn). Its growth in the aforementioned reporting segment led to IGT publishing its financials.
Global gaming revenue increased by 21 percent to $389m (2021 – $321m). This was due to strong player demand, operating leverage, and PlayDigital grew 56 per cent, to a record $65,m (2021 – $42m). This is due to organic growth and market expansion, as well as the iSoftBet acquisition.
Global lottery revenues declined by 7 percent to $639m during the quarter (2021: $687m). However, IGT reported that strong player demand meant the vertical delivered solid results.
After the company’s global gaming business ($68m, an 89% increase) and PlayDigital ($17m), total operating income rose 24% YoY to $230m (21: $186m). This was due to increased profitability and verticals, and stability for global lotteries ($216m).
The strong profit growth in global gambling ($101m, up 54%), and PlayDigital ($22m), up 14%, and a substantial contribution from the global lottery ($318m down 5%) also contributed to an increase in adjusted EBITDA.
IGT’s Q4 net debt was $5.15bn, which is a 13% decrease YoY (2021: 326m).
Sadusky stated, “We met all our financial goals and strengthened product leadership positions in our global lottery, gaming, PlayDigital activities, and global lottery.”
Full year net debt declines
IGT celebrated the completion or exceeding of its financial targets for the entire year. Total revenue increased by eight percent YoY to $4.23bn (2004: $4.09bn), and IGT reached its goal to reach $4.1bn-$4.2bn.
Global gaming grew per vertical by 28% to $1.42bn (2021 – $1.11bn), PlayDigital grew at 27% to $209m (2021 – $165m), and global lottery fell 8 percent to $2.59bn (2021 – $2.81bn).
IGT believes that the vertical has significant potential to increase its revenue and profit margins through 2025, based on the positive results of global gaming.
The full-year operating income was $922m. This is a 2 percent increase YoY (2021: 902m). This record was set after significant improvements in global gaming (242m, an increase of 462%). PlayDigital’s operating income also increased YoY (by 50m), which was an increase of 51 percent, while the global lottery fell by only 16 percent ($909m).
After strong years in global gaming ($365m up 111%) and PlayDigital ($68m up 41%), adjusted EBITDA for 2022 fell to $1.66bn (2021: 1.69bn). This was despite declines in global lottery ($1.31bn down 15%).
IGT’s net debt for this year was 13% lower than last year, at $5.15bn (21: $5.92bn). This is due to strong cash flow generation and Italian commercial services sales proceeds. The final sale instalment of the Italian gaming machine, digital gaming businesses, and the Italian gaming machine. Net debt leverage improved to 3.1x (2021 : 3.5x).
Max Chiara, CFO, stated that “2022 was an additional year of significant financial achievements.”
IGT’s improved earnings power is highlighted by 2022 adjustedEPS, which includes a lower interest expense and an increase in the effective tax rate. We achieved strong cash flow and funded future growth with increased investments.
This, along with the proceeds from non-core business sales, enabled us to reduce our debt and leverage to their lowest levels. As we implement our multi-year plan, the company’s improved credit profile and substantial liquidity will provide support and flexibility.
2023 Outlook
IGT has laid out its outlook for the first quarter and full-year 2023. The company anticipates Q1 revenues of close to $1bn and an operating margin between 22 percent and 24 percent.
The company has established a FY23 goal for revenue between $4.1bn to $4.3bn, an operating margin of 21 percent and 23 percent, cash from operations between $900m- $1bn, and capital spending between $400m- $450m.
IGT projects that global gaming will continue its momentum. IGT also predicts PlayDigital to experience double-digit revenue growth and low single-digital same store sales growth.
Sadusky said: “Important strategy work executed over the past few years has transformed IGT to a company with better growth prospects, a higher profit profile and a solid pathway to delivering our long-term objectives. In 2022, it has enabled record capital returns for shareholders.
“We enter 2023 with a strong position and good momentum across all business segments.”
