While Global Lottery remains the primary source of revenue for IGT, it was Global Gaming that led the way. Revenue for Global Lottery fell in Q3 while Global Gaming revenue was higher.
PlayDigital revenue remained level year-on-year, with growth in Global Gaming enough to push total revenue up.
Reflecting on Q3, IGT CEO Vince Sadusky highlighted momentum across key performance indicators for the period. It was also noted IGT has tightened full-year guidance to the upper end of previous forecasts based on its Q3.
“The strength of our leadership positions across Global Lottery, Global Gaming and PlayDigital is evident in our third quarter and year-to-date results,” Sadusky said. “Excellent momentum in key performance indicators is driving revenue growth and even stronger profit expansion.
“With a compelling pipeline of innovative products and solutions… I am confident we can achieve our near and medium-term goals as we focus on unlocking the intrinsic value of IGT’s market-leading assets.”
Global Gaming revenue rises 7.9% at IGT in Q3
Breaking down the Q3 performance, IGT says its Global Lottery business generated $601m in the three months to 30 September. This is 4.0% lower than $626m in the previous year.
IGT noted declines across both service and product sales revenue within the Global Lottery segment. Service revenue was down 2.0% to $576m, while product sales revenue slipped 35.9% to $25m.
In contrast, Global Gaming revenue jumped 7.9% to $409m. IGT says that this was driven by growth in the installed base and higher system and software sales. Global Gaming service revenue jumped 7.1% to $197m and product sales 8.7% to $212m.
As for PlayDigital, revenue remained level at $55m for Q3. IGT noted that growth in online casino was offset by the impact of exiting certain legacy iSoftBet jurisdictions. The group also highlights unusually high sports betting hold levels in the prior year.
As for group performance, total service revenue in Q3 edged up 0.2% to $828m. Product sales revenue was also marginally higher at $237m, both of which were enough to push overall revenue up.
Q3 net profit dips amid tough year-on-year comparables
Operating costs for Q3 were down 2.7% to $826m. Cost of services were the main outgoing for IGT by some distance at $408m.
However, Q3 non-operating expenses amounted to $50m, whereas last year IGT reported an additional $103m in profit in this area. As such, pre-tax profit hit $189m, down 40.0% from $315m in 2022.
IGT paid $66m in tax and also discounted $29m in profit from non-controlling interests. This left a net profit attributable to IGT of $94m, down 65.5% year-on-year. However, there was good news in terms of adjusted EBITDA, which increased 7.7% to $433m.
Nine-month revenue exceeds $3.10bn
Turning to the year-to-date performance, IGT posted $3.12bn in revenue in the nine months to 30 September. This was 1.5% ahead of the same point last year. Service revenue slipped 0.2% to $2.51bn but product sales revenue increased 8.7% to $672m.
IGT did not publish a breakdown of segmental performance in the three quarters. However, it did confirm that total operating costs for the period were 0.3% lower at $2.44bn. IGT’s non-operating costs were, however, 31.4% higher at $226m.
Pre-tax profit was level at $519m, while tax payments amounted to $239m and profit from non-controlling interests hit $117m. As such, net profit attributable to IGT reached $164m, down 51.6%. Adjusted EBITDA was 6.4% higher at $1.33bn.
IGT expects revenue to hit $4.30bn in full-year
Taking this into account, IGT has tightened its guidance for Q4 and the full-year. In Q4, total revenue is likely to reach $1.10bn, with Global Lottery ahead of last year and both Global Gaming and PlayDigital revenue level.
As for the full-year, IGT expects revenue to amount to $4.30bn, which is at the upper end of its previous guidance range. Operating profit is forecast to reach 23% for the 12-month period.
“We’re pleased with the financial results we delivered in Q3,” IGT chief financial officer Max Chiara said. “These include top-line growth, margin expansion and strong cash flow generation.
“Our financial position is solid with net debt leverage at a historical low point and already comfortably within our long-term target range. Coupled with no meaningful near-term debt maturities and access to significant liquidity, this greatly enhances our balance sheet and creates additional financial flexibility.”