Second quarter revenue at International Game Technology was up 74 per cent to over $1bn, fuelled by strong increases in all businesses, including 35 per cent growth in global lottery sales. The company delivered operating income of $244m, highlighting excellent progress on structural cost savings.
Global lottery revenue increased 58 per cent to $725m, the second-highest revenue and profit levels in segment history, driven by strong player demand, whilst global gaming revenue came in at $316m, up 126 per cent from the prior year and 19 per cent sequentially on continued recovery trends. Digital and betting revenue increased 41 per cent in the quarter. The company expects second half 2021 revenue and operating income from continuing operations of $2bn and $300m, respectfully, meaningfully higher than the prior year.
“Impressive second quarter results highlight the vitality of our portfolio,” said Marco Sala, CEO of IGT. “Outstanding Lottery performance, the progressive recovery in land-based Gaming, and strong increase in Digital & Betting activities drove substantial revenue and profit growth, delivering Adjusted EBITDA that is among the highest recorded in a quarterly period. On the strength of the first half performance, we are raising our outlook for the year and now expect to exceed 2019 levels for key financial metrics this year.”
“Record free cash flow from continuing operations and proceeds from recent asset sales fueled significant debt reduction in the first half,” said Max Chiara, CFO of IGT. “Our leverage profile improved substantially, reaching pre-pandemic levels well ahead of expectations, and improving our credit profile and overall financial condition.”
In terms of savings, IGT achieved approximately two-thirds of $200m plus 2021 OPtiMa savings targets year-to-date.
IGT saw a growing adoption of its best-in-class cashless solutions, most recently with Agua Caliente Casinos and Washington’s Lottery. It deployed its Wheel of Fortune-themed Historical Horse Racing games at Churchill Downs in Kentucky and signed a seven-year systems contract with Maryland Lottery connecting 11,500 Video lottery terminals and electronic table games across six casinos. It also saw expanded availability of its PeakSlant49 cabinet, with high-performing core video content, under the purchase model.
Elsewhere, the company completed the sale of its Italy B2C gaming businesses.
Jefferies analyst David Katz said: “The strong upside in the quarter is consistent with that of other names in Gaming thus far, with the cash generation particularly important for IGT, as it progresses to the <4X leverage target. We expect this progress should result in a positive reaction in the shares, particularly given the recent weakness."