International Game Technology (IGT) Q2 Earnings call transcript Jul 30, 2024

In a recent earnings call, International Game Technology (IGT) reported strong first half results, with over $2 billion of revenue and an operating margin of 23%. The company's global lottery and gaming and digital segments have contributed significantly to this success, with record operating income and adjusted EBITDA achieved before separation divestiture costs.

Key Themes and Trends

IGT's strong performance is a testament to its solid financial health and strategic initiatives. The company has established itself as a leader in global sustainability, with a focus on environmental, social, and governance initiatives. This commitment to sustainability, coupled with its innovative products and value-added solutions, positions IGT as a premier player in the lottery industry.

The sale of IGT's gaming and digital business to Apollo for $4.05 billion in cash is a strategic move that will simplify the company's business model and focus on its core lottery operations. This transaction will provide a quicker realization of value, eliminate shareholder exposure to execution risk, and establish IGT as the premier pure-play lottery business.

Performance Highlights

IGT's global lottery segment has seen high levels of play around the world, with a 2% increase in revenue for the first 6 months and a 3.5% growth in Italy same-store sales. The company's innovative games and strategic partnerships, such as the recent launch of its iLottery platform in Connecticut, have driven growth in digital sales.

The gaming and digital segment also reported strong performance, with a 1% increase in revenue and a 2% increase in service revenue. IGT's focus on innovation and the launch of high-performing games, such as Tiger and Dragon and Mystery of the Lamp, have contributed to this growth.

Strategic Initiatives

IGT's strategic initiatives include the expansion of its global lottery portfolio and the advancement of key strategic partnerships. The company's recent contract wins, such as the 7-year contract with the Colorado Lottery and the 3-year extension with the Mississippi Lottery Corporation, demonstrate its market leadership and innovative capabilities.

Financial Outlook

IGT's financial outlook is positive, with strong profit margins, significant free cash flow generation, and a solid balance sheet. The company's focus on extending and securing its contract portfolio over the coming years positions it well for continued growth.

Conclusion

IGT's strong first half results and strategic initiatives highlight its leadership in the lottery industry and its commitment to innovation and sustainability. The sale of its gaming and digital business to Apollo is a strategic move that will simplify the company's business model and focus on its core lottery operations. With a strong financial position and a clear path forward, IGT is well-positioned for continued growth and success.