IGT strengthens 2023 targets despite lottery decline

IGT Plc has confidently reaffirmed its FY2023 corporate objectives after a strong start to the year, driven by growth in all primary business segments.

In its Q1 2023 trading update, the NYSE-listed gambling technology firm reported corporate revenues of $1.06 billion, a 1% increase from the $1.05 billion recorded in Q1 2022. This growth occurred despite a -$26 million impact from Q1 FX currency fluctuations and the sale of Lottomatica B2C business.

Following the sale of its Italian business, IGT’s Global Lottery unit experienced an 8% revenue decline to $624 million, down from $680 million in Q1 2022. However, this decline was offset by a 17% increase in both Global Gaming and Play Digital units, which reported revenues of $381 million and $55 million, respectively.

IGT attributed the Global Gaming unit’s growth to improved service and product sales, while the Play Digital unit’s growth was driven by significant enhancements to its online casino offerings, following the integration of the iSoftBet games portfolio.

IGT’s operating income margin reached 24%, matching its high-end outlook, with Q1 operating income rising 1% to $255 million, up from $252 million in Q1 2022. Adjusted EBITDA stood at $449 million with a 42.3% margin, marking one of the company’s highest levels in history. IGT also improved its net debt leverage to a record low of 3.0x, with a total net debt of $5.1 billion.

CEO Vince Sadusky expressed confidence in achieving their full-year outlook, attributing IGT’s success to compelling innovation and strong customer demand across Global Lottery, Global Gaming, and PlayDigital segments.

IGT is also leading the way in cashless gaming growth, signing a multi-year agreement with Graton Resort & Casino to enable cashless gaming through the newly implemented Resort Wallet and IGTPay solutions. The company also extended sports betting momentum through strategic agreements with Betfred, Treasure Bay Casino and Hotel, UBetOhio, Santa Ana Star Casino Hotel, and BetSkybox.

IGT reaffirmed its full-year 2023 outlook, expecting revenues between $4.1 and $4.3 billion, and an operating income margin of 21% to 23%. The company projects Q2 2023 revenue of approximately $1.0 billion and an operating income margin of 22% to 24%.

CFO Max Chiara highlighted significant cash flow generation and improved credit profile, emphasizing their commitment to achieving the 2.5x – 3.5x net debt leverage target range by 2025.