International Game Technology (NYSE:IGT) reported robust results for Q3 2023 during its earnings call, demonstrating an 8% increase in year-to-date revenue. The company's growth was primarily driven by its Global Lottery, Global Gaming, and PlayDigital segments. IGT also confirmed that it is on track to achieve its full-year 2023 financial goals and is currently evaluating strategic alternatives for its Global Gaming and PlayDigital segments.
Key takeaways from the call include:
- IGT reported Q3 operating income growth of 13% and achieved a record operating margin. The company generated over $1 billion in revenue.
- The company's growth was driven by its Global Lottery, Global Gaming, and PlayDigital segments. IGT reported revenue growth of 8% in its Global Gaming segment, driven by strong performance in leased games.
- IGT extended partnerships with the California and Kentucky Lotteries, securing long-term contracts. The company also emphasized its focus on iLottery sales and the deployment of new platforms in markets like Connecticut.
- In the PlayDigital segment, operating income grew by 32%, driven by iGaming growth and the launch of new games. IGT is also expanding its presence in sports betting and introducing live streaming sports and sports betting functionality on their terminals.
- CEO Massimiliano Chiara reported a 6% increase in revenue, excluding the sale of the Italy Commercial Service business. Q3 operating income rose 13% to $239 million, and adjusted EBITDA reached $433 million, up 8%.
- Global Lottery revenue was around $600 million, down 4%, but up 5% when adjusting for the sale of Italy Commercial Service. Global Gaming saw an 8% increase in revenue, driven by growth in the install base and higher system and software sales.
- IGT expects revenue of about $4.3 billion for the full year and maintains its profit margin outlook. The company is continuing its strategic evaluation process and believes a transaction for the gaming segment is still a valid option.
During the call, IGT's CEO highlighted the company's strong position in several game categories and reported strong sales of new video poker cabinets. The company also discussed lottery volatility and the outlook for slot sales, noting challenges in certain regions but overall positive performance.
The company's CFO, Massimiliano Chiara, mentioned that the easing supply chain is resulting in lower costs, a benefit they expect to continue into 2024 and contribute to margin progression. The company also highlighted its good momentum and focus on growth, renovation, and optimization to achieve their full-year commitments and 2025 targets.
InvestingPro Insights
In light of the recent earnings call, InvestingPro provides some valuable data and tips for investors considering IGT. The company's market cap stands at a respectable 5100M USD, with a P/E ratio of 53.52, indicating high investor expectations. The revenue for the last 12 months as of Q3 2023 is 4273M USD, aligning with IGT's reported robust results and growth.
From an InvestingPro Tips perspective, two key insights stand out. Firstly, IGT has high earnings quality, with free cash flow exceeding net income, which can be indicative of a healthy financial situation. Secondly, the Relative Strength Index (RSI) suggests the stock is in oversold territory, meaning it could be an opportune time to invest.
It's important to note that there are additional InvestingPro Tips available, providing a more comprehensive view of IGT's financial health and market position. For instance, the fact that IGT has maintained dividend payments for 9 consecutive years could be of interest to income-focused investors.
In conclusion, the InvestingPro data and tips suggest that IGT is a company worth considering for investment, particularly given its strong Q3 2023 performance and positive outlook for the future.
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