Likely second-quarter market share gains in International Game Technology Plc’s (IGT’s) land-based gaming and online segments “potentially lubricate strategic optionality” for the group, said a Wednesday note from analyst David Bain, of B. Riley Securities Inc.
In June, IGT announced that its board was “evaluating potential strategic alternatives” for the group’s global gaming and PlayDigital segments.
Such steps could include “sale, merger or spin-off”, stated the group. In a subsequent note, Mr Bain had suggested that were IGT to split its global gaming and digital content units from its lottery business, the first two could potentially be packaged and listed “in either the United States or Australia”.
His latest note on IGT followed the gaming supplier’s second-quarter results on Tuesday, where group revenue was just below US$1.06 billion, 3.3-percent higher than a year ago.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) for the latest reporting period stood at US$443 million, up 8.3 percent from the second quarter of 2022.
Mr Bain stated: “We gauge a segment of investor focus that is currently geared toward potential strategic alternatives for its global gaming and digital business.”
He added that while IGT was one of the first gaming technology suppliers to report earnings for the three months to June 30, “we believe gaming year-on-year EBITDA growth will show better than all peers while gaming metric growth will show above the peer group: IGT is taking market share.”
IGT’s global gaming revenue stood at US$373 million in the quarter to June, up 13.0 percent from a year earlier. Revenue in the group’s digital and betting segment was US$59 million, up 37.2 percent from a year earlier.
Mr Bain stated: “In digital, IGT’s beat reflected better-than-expected margins, partially due to the timing of jackpot expense.”
He added: “We note recent upward movement in iCasino slot title rankings and continue to believe IGT is under-represented in the segment.”
