International Game Technology: Jackpot Slowdown Impacts Q4 Earnings

International Game Technology (IGT) has reported its Q4 and full year 2024 financial results, missing earnings estimates amid a slowdown in jackpot activity. The company generated $651 million in Q4 revenue and $2.5 billion for the full year, driven by strong instant ticket and draw game sales across markets. However, the slowdown in jackpot activity impacted the company's earnings, with Q4 income from continuing operations reaching $116 million with a 17.9% margin, and full-year income at $271 million with a 10.8% margin.



IGT's Adjusted EBITDA for Q4 was $290 million with a 44.5% margin, and for the full year, it was $1.17 billion with a 46.6% margin. The company announced the $4.05 billion sale of its Gaming & Digital business to Apollo Global Management, expected to close by Q3 2025. IGT secured several significant lottery contracts, including a seven-year facilities management contract with Colorado Lottery and extensions in multiple jurisdictions.



For 2025, IGT expects revenue of $2.55-$2.65 billion and Adjusted EBITDA of $1.10-$1.15 billion. The Board declared a quarterly cash dividend of $0.20 per common share.

IGT's strategic transformation and solid financial performance position the company for future growth. The announced sale of its Gaming & Digital business to Apollo represents a watershed moment that will streamline operations and significantly strengthen the company's balance sheet. The company's financial performance remained solid with full-year revenue of $2.5 billion and Adjusted EBITDA of $1.17 billion, yielding an impressive 46.6% margin. This margin structure underscores the highly profitable nature of IGT's lottery operations, which feature recurring revenue streams and long-term contracts that provide exceptional visibility and stability.



The robust cash generation capabilities of IGT's lottery business are particularly noteworthy, with $1.03 billion in consolidated cash from operations and $659 million in free cash flow for 2024. This cash flow engine enables IGT to simultaneously invest in growth initiatives, reduce debt, and return capital to shareholders through its $0.20 quarterly dividend.

IGT's contract wins and extensions across multiple jurisdictions validate its market leadership and technology capabilities. These long-duration contracts create a formidable competitive moat and provide revenue stability that few businesses can match. The 2025 outlook reveals both near-term investments and long-term strategic positioning, with the company investing to secure its portfolio and extend contract durations beyond eight years, driving sustainable growth and shareholder returns.

The planned $2 billion debt reduction following the Gaming & Digital sale will transform IGT's capital structure, reducing leverage and interest expense while creating additional financial flexibility. This positions the company to potentially increase shareholder returns or pursue strategic acquisitions in the lottery space.

For investors, IGT now offers a clearer investment thesis as a pure-play lottery operator with predictable cash flows, long-term contracts, high margins, and a compelling growth profile in the low-to-mid single digits. While 2025 may be a transition year with elevated investments and the Italy Lotto license payment impacting reported cash flows, the underlying business fundamentals remain exceptionally strong.