IGT’s global gaming and PlayDigital units have continued to show strong annual growth to mask a stagnant flagship lottery division throughout the second quarter of 2023.
Publishing its Q2 report, IGT has recorded total corporate revenue of $1.06bn, up 3% year-over-year as the group’s digital and gaming wings show off double-digit growth. Overall it was a strong quarter for the global gaming technology group, which has raised its full-year guidance for both revenue and income.
The global gaming unit contributed $373m in revenue during Q2, up 14% YoY, driven by several factors including record North American cabinet shipments and higher global selling prices.
Meanwhile, the PlayDigital unit, including the PlaySports sportsbook platform which has rolled out across the US this year, showed the most impressive growth. The segment earned $59m in revenue, jumping 38% YoY and boosted by the contribution of the iSoftBet business which it acquired for $140m last year.
IGT pointed towards some major successes during Q2 which helped push these growing divisions, including the 10-year brand licensing deal with Sony Pictures for the Wheel of Fortune brand, which helped to launch the BetMGM Wheel of Fortune online casino in New Jersey.
The firm also rolled out its Advantage gaming system at the Rio Hotel & Casino as it enjoys success selling its new cabinets.
“Our second-quarter and first-half results reflect solid revenue and profit momentum across all business segments,” said Vince Sadusky, CEO of IGT. “We achieved the high end of our outlook by executing key strategic initiatives and growing demand for IGT’s compelling content and solutions.
“We are solidly on track to deliver on our 2025 objectives and remain focused on unlocking the intrinsic value of IGT’s market-leading businesses.”
However, despite the newer units contributing to the growth of the group, IGT’s flagship lottery unit continued its long-term trend of narrowly declining revenues. The global lottery section is still by far the largest contributor of revenue, yielding $624m in Q2, but this marks a 5% decline on an annual basis.
With IGT currently conducting a strategic review into its future, which could include a partial sale of the gaming and digital units, corporate management will look towards the lottery sector to reach growth once more to catalyze long-term successes.
However, most of this decline was attributed to the sale of IGT’s Italian commercial services business which was completed last September, meaning the firm’s Q4 report could offer a more true picture of the health of the lottery unit.
The lottery unit did make a positive contribution to IGT’s bottom line, with the $332m in adjusted EBITDA remaining constant in Q2’22’s figure despite the Italian sale.
Highlighting the firm’s wider successes, the global gaming unit recorded EBITDA growth of 29% to $112m, while PlayDigital grew by 82% YoY to contribute $22m. Overall, IGT’s EBITDA stood at $443m, up 7% YoY.
From an operational income perspective, IGT made $251m from Q2 trading, up 9% YoY, fueled by the 125% in the PlayDigital unit.
Thanks to a quarter of financial and operational successes, IGT has raised its full-year guidance for 2023. Firstly, the group anticipates Q3 revenue of around $1bn and an operating income of 2223%.
For the full year, IGT expects revenue of around $4.2bn-$4.3bn with an operating income margin of circa 23%.
“Our year-to-date performance showcases the strong cash generation of the business. We have a solid foundation to build from as we continue to invest in our growth objectives, further reduce debt, and return capital to shareholders,” said Max Chiara, CFO of IGT. “Based on our first-half results, we are confidently raising our full-year 2023 revenue and operating margin outlook.”