Revenue Performance
International Game Technology (IGT) has unveiled its financial results for the second quarter of 2024, reflecting a nuanced performance across its core business segments. Total revenue for the quarter reached approximately $1.05 billion, marking a slight year-on-year decline of 1%. This decrease is primarily driven by a drop in the Global Lottery segment, whereas the Gaming & Digital division exhibited growth.
The Global Lottery sector experienced a 2% revenue decline, totaling $613 million. This downturn is largely due to the absence of a substantial multi-year software license sale from the previous year, which had significantly boosted the prior period’s figures. Conversely, the Gaming & Digital segment saw a modest 1% increase in revenue, reaching $436 million. This growth was supported by an expanded installed base, though it was partially counterbalanced by lower terminal unit shipments.
Operating Income and Expense Dynamics
IGT’s total operating income for Q2 2024 stood at $230 million, reflecting an 8% decrease from the same period last year. This overall decline in operating income is indicative of broader challenges faced by the company, though performance varied across its segments. Notably, the Gaming & Digital division achieved a 16% increase in operating income, amounting to $103 million. This significant growth underscores the segment’s operational efficiency and success in capitalizing on market opportunities. In contrast, the Global Lottery segment saw an 8% decrease in operating income, totaling $212 million, highlighting the ongoing difficulties within the sector amidst the lack of last year’s exceptional software sale.
In terms of corporate expenses, the company saw a remarkable reduction in corporate support expenses, which fell by 67% to an operating loss of $51 million. This substantial decrease reflects improved cost management and operational efficiency. Meanwhile, other expenses increased by 8%, although the total remained an operating loss of $35 million, reflecting ongoing investments and adjustments within IGT’s operations.
EBITDA and Financial Stability
Adjusted EBITDA for the quarter was reported at $420 million, representing a 5% decline year-on-year. Despite this decrease, the figure underscores IGT’s ability to generate significant earnings before interest, taxes, depreciation, and amortization, demonstrating resilience amid revenue fluctuations. Additionally, net debt decreased by 5% to $5.11 billion, signaling enhanced financial stability and flexibility for the company.
Strategic Developments
These financial results come in the wake of major strategic moves by IGT, including the acquisition of IGT’s Gaming and Digital business by Apollo Funds and the subsequent merger with Everi. This strategic realignment reflects IGT’s broader plan to concentrate on its core business areas and unlock the intrinsic value of its various segments.
IGT CEO Vince Sadusky remarked on the company’s achievements, stating, “IGT delivered strong first-half results, including record operating income and Adjusted EBITDA net of Separation and divestiture costs. Consistent investments in technology, game content, and other innovative solutions provide us a solid foundation to build from as we execute on our growth objectives. The recently announced sale of our Gaming & Digital business for $4.05 billion in cash is an important step in unlocking the intrinsic value of IGT’s best-in-class businesses.”
IGT CFO Max Chiara added, “We generated over $460 million in cash from operations in the first half of the year, and our balance sheet is as strong as ever. Our ample liquidity and manageable near-term debt maturities provide us significant flexibility in light of upcoming investments to extend and secure our long-term lottery contract portfolio for the coming years.”
IGT’s Q2 2024 financial results illustrate a period of mixed performance, characterized by a decline in overall revenue juxtaposed with growth in the Gaming & Digital segment. The company’s strategic realignment and improved operational efficiencies highlight its ongoing efforts to enhance financial stability and unlock value, setting a foundation for future growth as it navigates these significant changes.