International Game Technology 2025 Q1 Earnings Misses Targets as Net Income Declines 53%

International Game Technology (IGT) reported its fiscal 2025 Q1 earnings on May 13th, 2025. Despite efforts to maintain steady growth, IGT's results missed market expectations, as net income saw a significant decline of 53%. The company revised its guidance to align with the low end of previous estimates due to challenging market conditions. IGT's revenue of $583 million fell short of the anticipated $627.84 million, while adjusted earnings per share of $0.09 missed the consensus estimate of $0.11. The company remains committed to optimizing its portfolio and pursuing long-term growth strategies.

Revenue
The total revenue of International Game Technology decreased by 11.8% to $583 million in 2025 Q1, down from $661 million in 2024 Q1. Service revenue contributed $557 million, while operating and facilities management contracts brought in $545 million. Systems, software, and other segments added $13 million, and product sales accounted for $26 million, culminating in a total revenue of $583 million.

Earnings/Net Income
International Game Technology's EPS declined 68.3% to $0.13 in 2025 Q1 from $0.41 in 2024 Q1. Meanwhile, the company's net income declined to $60 million in 2025 Q1, down 53.1% from $128 million reported in 2024 Q1. The EPS performance indicates significant financial challenges.

Post-Earnings Price Action Review
The strategy of buying IGT when revenue exceeds expectations and holding for 30 days has historically delivered a robust 135.53% return, outperforming benchmarks. However, this approach carries a considerable risk, evidenced by a maximum drawdown of -56.79% and a moderate Sharpe ratio of 0.37, reflecting moderate risk-adjusted returns. This strategy suggests that while potential gains exist, investors should be mindful of the associated volatility. The recent earnings report, which missed expectations, may affect the viability of this strategy in the short term, and investors should weigh the potential gains against the inherent risks. The company's commitment to innovation and portfolio optimization could provide long-term benefits, but current market conditions may pose challenges to immediate performance.

CEO Commentary
"Global sales of instant ticket and draw games continue to expand, driven by a steady pipeline of game innovation and portfolio optimization strategies," said Vince Sadusky, CEO of IGT. He acknowledged the challenging environment, noting that "First quarter profit was in line with expectations at constant currency and we delivered strong cash conversion." Sadusky emphasized the company's focus on sustainable, long-term growth, stating that despite current uncertainties, they are excited about ongoing initiatives aimed at enhancing shareholder value.

Guidance
International Game Technology expects to achieve revenue of approximately $2.55 billion and Adjusted EBITDA of roughly $1.10 billion for the full year 2025, aligning with the low end of earlier guidance. The company anticipates cash from operations to be a use of approximately $350 million, primarily due to incremental foreign exchange impacts related to the Italy Lotto license fee.

Additional News
In recent developments, International Game Technology (IGT) has declared a quarterly cash dividend of $0.20 per common share, payable on June 12, 2025, to shareholders of record as of May 29, 2025. This move underscores IGT's focus on returning value to shareholders despite challenging market conditions. Additionally, the company recently executed a €1 billion term loan due 2030, with €500 million already drawn to repay existing borrowings. The remaining €500 million is committed and will be used if the Italy Lotto license is awarded. These financial maneuvers indicate IGT's proactive approach to maintaining liquidity and funding key contract renewals. No major M&A activity or C-level changes have been reported within the past three weeks.