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IGT reported second-quarter revenue of $1.05 billion. In a press release, the company says the 1% dip was “in line with the prior year.” IGT’s CEO Vince Sadusky said, “IGT delivered strong first half results, including record operating income and Adjusted EBITDA net of Separation and divestiture costs.”
In IGT’s Q2 2024 earnings results news release, looking forward, Sandusky added: “Consistent investments in technology, game content, and other innovative solutions provide us a solid foundation to build from as we execute on our growth objectives.
The recently announced sale of our Gaming & Digital business for $4.05 billion in cash is an important step in unlocking the intrinsic value of IGT’s best-in-class businesses.”
Key takeaways
- Business is steady with record income in the first half of the year.
- Gaming and digital will spin off to a new company, while lottery will remain with IGT after the deal closes late next year.
- Lottery is the larger of the two divisions.
- A dozen or so new higher-priced lottery products will launch in the second half of the year.
IGT’s Q2 2024 earnings overview
The earnings were released shortly after the announcement that Appolo Global Management will acquire IGT’s gaming and digital divisions. While that division will become a privately held company, the lottery division will remain public under a new stock ticker.
The revenue from the lottery division during the second quarter was $613 million. This was a 2% decrease from the same period last year. IGT says the dip was due to a multi-year software license deal during the second quarter of last year.
While the lottery division fell slightly, the gaming and digital division saw a tiny 1% increase. IGT (NYSE: IGT) reports this division generated $436 million in revenue for the second quarter.
Overall operating income was affected by divesting the two divisions. IGT’s operating income during the second quarter was $230 million compared to $251 million last year. If the $26 million in separation and divestiture costs were excluded the operating income would have increased to $256 million.
Income for the soon-to-be-divested gaming and digital division was the strong point of second-quarter earnings. IGT reported operating income of $103 million during the quarter. This is a strong 16% increase from the same period in 2023 when the division reported $89 million in operating income.
During the quarterly earnings call, Sadusky sounded confident the deal would receive all regulatory approvals necessary to close by the end of 2025.
IGT’s gaming and digital division
IGT’s gaming & digital division will be a thing of the past in a little over a year.
This division represented 40% of revenue and 28% of operating income for IGT during the first half of 2024. Land-based and online casino revenue accounted for 29% of EBITDA for IGT for the first half of the year.
The company considers North America to be one market. During the quarter it appears as though the US online casino business was stronger than Canada. The company says that its US iGaming performance “was offset by game mix and timing of jackpots in Canada”
As of July, the company has the top online casino, slots, and table games according to Eilers & Krejcik Gaming. Cash Eruption is the top online slot while blackjack is the number one online table game.
IGT launched Prosperity Link for online casinos at the beginning of the third quarter. Revenue from the popular land-based casino game will be included in the next earnings period.
IGT is already mostly a lottery company
During IGT’s second-quarter earnings call, Sandusky said IGT is already primarily a lottery company. This is shown in the revenue splits.
The lottery segment accounted for 72% of operating income and 60% of revenue for IGT during the second quarter.
IGT slots like “Wheel of Fortune” have been the company’s calling card over the years. That’s no longer the case.
The company has been focused on growing its lottery division before signing a deal to offload the gaming and digital segment.
During the second quarter, IGT signed a seven-year deal with the Colorado Lottery. It also extended its contract with Mississippi for three years.
Sandusky commented that states are slower to approve online lottery than he’d like. Despite the slow adoption, the IGT signed a five-year iLottery contract with Atlantic Lottery Corporation and launched iLottery in Connecticut.
The second half of the year should be stronger for IGT’s lottery division. IGT will launch about a dozen new higher-priced lottery products over the next six months.
The company expects its forecast of low single-digit growth for the lottery division to remain intact while it prepares the sale of its other segment.
Sadusky says the company will share plans for the future of its lottery business when the deal for the gaming and digital division gets closer to completion.
