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Image source: The Motley Fool. International Game Technology Plc (IGT -2.19%)Q2 2023 Earnings CallAug 01, 2023, 8:00 a.m. ETContents: Prepared Remarks Questions and Answers Call Participants
Today, International Game Technology (IGT) held its Q2 2023 earnings call, featuring CEO Vince Sadusky and CFO Max Chiara. During the call, forward-looking statements were made within the meaning of federal securities laws. It was noted that these statements are not guarantees and actual results may differ from what was expressed or implied. The principal risks and uncertainties affecting results were detailed in IGT’s earnings release and SEC filings.
Non-GAAP financial measures were discussed during the call, and additional disclosures and reconciliations with comparable GAAP measures can be found in the press release, presentation slides, and SEC filings on IGT’s investor relations website.
Vince Sadusky began the call by acknowledging the passing of Fabio Cairoli, who was a key leader in IGT’s global lottery business. He praised Fabio’s contributions and expressed condolences for his loss.
Moving on to the Q2 and first-half results, IGT saw solid momentum across all business segments. Reported revenue for the first half was up 2%, but adjusted for the sale of Italy commercial services, it increased 10%. This growth was driven by a 5% increase in global lottery, a 15% increase in global gaming, and a 27% increase in PlayDigital. Operating income for the first six months exceeded $500 million, with an operating margin of 24% in both Q2 and the first half. EBITDA for the first half was approximately $900 million, with a margin expansion of 140 basis points to 42%.
Based on the strong first-half results, IGT raised its outlook for the year. In the global lottery segment, strategic initiatives led to a 5% increase in same-store sales, with Italy achieving a remarkable 9% expansion. The success of new games and game mechanics contributed to the growth in ticket sales and draw games. In North America, same-store sales trends improved progressively throughout Q2 and continued to improve in July.
IGT also made significant progress in strengthening its contract portfolio. It went live as the lottery’s new FM provider in Connecticut and won a 20-year concession to operate instants and passive lottery games in Brazil’s Minas Gerais state. The company’s reentry into the Brazilian market is seen as a long-term opportunity. In iLottery, global sales were up over 70% in the first half, driven by strong trends and the launch of new games. IGT also secured cross-licensing agreements and won contracts in Connecticut to launch its first-ever iLottery system.
In the global gaming segment, IGT saw continued momentum across all key performance indicators, resulting in a 15% increase in revenue and 30% increase in profit for the first half. The company shipped over 16,500 units, including record levels in the U.S. and Canada. Multilevel progressive games and popular titles contributed to these strong results. IGT’s VLT market leadership was also reinforced with recent contract awards in Western Canada and Alberta.
The installed base grew by 9% compared to the prior year, with higher yields and sequential growth for four consecutive quarters. Innovation and the Prosperity Link game were cited as important drivers. Additionally, IGT’s central casino management system was selected for new casinos and agreements were made to extend the Wheel of Fortune brand licensing partnership with Sony.
In overall results, IGT’s Q2 and first-half performance demonstrated solid growth and momentum across all business segments. The company raised its outlook for the year and emphasized the success of strategic initiatives and strong partnerships in driving results.
