Gaming equipment maker and content provider International Game Technology Plc (IGT) on Tuesday reported aggregate revenue of US$1.13 billion for the final quarter of 2023, up 3.4 percent from the prior-year period.
The company posted a net loss attributable to shareholders of US$7 million for the period, an improvement on the US$64-million loss recorded a year earlier.
IGT’s board nonetheless declared a quarterly cash dividend of US$0.20 per common share, payable on April 9.
IGT runs three main segments: global lottery; global gaming; and PlayDigital, its online content arm.
Fourth-quarter operating income rose 11.3 percent year-on-year to US$256 million, “with strength across global lottery, global gaming, and PlayDigital” segments, stated the gaming supplier. Operating income margin for the reporting period expanded by 160 basis points to 22.7 percent, it added.
The group’s fourth-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at US$454 million, up 8.4 percent from a year ago. EBITDA margin reached 40.2 percent, compared with 38.3 percent in fourth-quarter 2022.
Revenue from global gaming was US$390 million in the October to December period. Such revenue was “in line with the prior year, as higher terminal product sales revenue and increased intellectual property revenue were offset by lower systems sales,” stated IGT.
In the fourth quarter, the global gaming segment sold 9,391 machine units, down 1.0 percent from a year earlier. But the sale of machines in the rest-of-the-world markets rose 30.9 percent year-on-year, to 2,662 units, according to Tuesday’s announcement.
Fourth-quarter revenue from global lottery increase 6.6 percent year-on-year, to US$681 million. Group revenue from PlayDigital was down 9.2 percent year-on-year, at US$59 million.
Vince Sadusky, IGT’s chief executive, said in prepared remarks that the company “delivered a strong finish to the year … propelling full year 2023 profits to record levels”.
For the calendar year, IGT reported net income attributable to its shareholders of US$156 million, on revenue that grew by 2.0 percent year-on-year, to US$4.31 billion.
“A compelling array of products and solutions fuelled broad-based momentum in key performance indicators, driving margin improvement across our global lottery, global gaming, and PlayDigital segments,” noted the CEO.
Adding value
IGT is to separate its gaming and PlayDigital segments and combine those businesses with another gaming technology supplier, Everi Holdings Inc, the companies had said on February 29 in a joint update. IGT shareholders are expected to own approximately 54 percent of the combined company, and Mr Sadusky will lead the combined entity.
In his Tuesday remarks, Mr Sadusky said: “We believe the recent determination to split the business and create separate lottery and gaming pure play companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.”
Moody’s Investors Service Inc said last week that the “planned spinoff” of the global gaming and PlayDigital businesses had “no impact” on IGT’s credit ratings. The ratings agency upgraded IGT last year to “Ba1” from “Ba2”, with a “stable outlook”.
Max Chiara, IGT’s chief financial officer, was quoted in Tuesday’s release as saying that the company had been able to “achieve all” of its “financial goals in 2023”.
He added: “Robust cash generation funded incremental investments in the business and shareholder returns, while driving leverage to historically low levels, putting IGT in a strong financial position as we enter 2024.”
The company said it achieved “record” adjusted EBITDA in 2023, at nearly US$1.78 billion, up 6.9 percent from the prior year; and record annual adjusted EBITDA margin of 41.3 percent.
IGT expects to record revenue in the range of US$4.3 billion to US$4.4 billion in 2024, with an operating income margin of between 20 percent and 21 percent. The firm said the latter range includes “circa 300 basis point negative impact” from pre-closing separation and divestiture costs related to its gaming and PlayDigital segments.
