IGT’s global gaming division headlined corporate growth during Q3, offsetting a slowdown in lottery revenues as the group navigated the global economic downturn.
Publishing its Q3 financial report, IGT posted total revenues of $1.06bn, up 8% year-over-year from Q321’s $984m.
Global Gaming steals the show for IGT during Q3
Global gaming revenues increased 31% YoY, reaching $379m, which was driven by “increases in machine shipments, average selling prices, installed base yields, and intellectual property and multi-year poker site licenses”.
The unit performance saw a 72% increase in terminal sales, with US and Canada machine units sold increasing by 61% and new and expansion machine sales increasing by 83% YoY.
The gaming division also saw operating income increase by 107% YoY, reaching $65m compared to Q32021’s $31m.
Lottery revenues slowdown whilst digital and betting progresses
This helped to offset a slowdown in IGT’s global lottery unit performance, which experienced a 4% decrease in revenues down to $626m, attributable to global financial headwinds felt from weakening currencies against the US dollar.
Meanwhile, the digital and betting unit recorded 27% revenue growth YoY, increasing to $54m, driven by growth in casino and material contributions from its acquisition of iSoftBet.
New North American markets and organic growth were also listed as reasons for IGT’s Digital and betting revenue growth. In Washington State, the firm penned a multi-year contract with Nisqually Red Wind Casino which will leverage IGT’s full turnkey solution.
The group noted that, despite operating income across its digital and betting unit remaining flat, it will continue to invest to fund necessary growth.
Total revenues were fueled by North America, with US & Canadian revenues reaching $651m, up 17% YoY, compared to Italy ($247m) and Rest of World ($161m).
“IGT’s organization along three business segments enables our teams to be focused on developing and delivering best-in-class products and services,” said Vince Sadusky, CEO of IGT. “The accomplishments are evidenced in accelerated revenue and profit expansion in the third quarter, achieving the top-end of our margin outlook.
“Customer and player demand trends remain encouraging and IGT’s suite of innovative products and solutions has never been better. In addition, we reached the lowest debt leverage in the company’s history, while returning a record $224m in capital to shareholders so far this year.”
Maintaining its profitability level despite macroeconomic challenges, IGT posted flat adjusted EBITDA, falling 1% YoY to $402m compared to $407m last year.
Global lottery retains strong profitability, with a 34% margin yielding $211m in net income, though this was down 10% YoY, attributable to a lower contribution from the Italian business and increased R&D investment.
Total operating income also stood at $211m, with gaming and digital & betting gains offset by the 10% reduction in lottery income as well as corporate support expenses growing by 38%.
IGT also offered insights into its full-year projections, anticipating revenue of $4.1bn – $4.2bn.
“Our strategy to innovate, optimize, and grow is fueling progress across the portfolio,” said Max Chiara, CFO of IGT. “Robust year-to-date cash flows and proceeds from the sale of the Italy proximity payments/commercial services business, in addition to proactive liability management, enabled us to reduce debt to the lowest level ever.
“This enhanced credit profile provides greater financial flexibility to execute on the broadened, balanced capital allocation strategy presented at the Investor Day last November.”