IGT sees highest lottery same-store sales growth in seven quarters

International Game Technology (IGT) reported financial results Wednesday for the third quarter, reflecting the continued, global impact of the COVID-19 pandemic, but at a lower level compared to the second quarter.

Consolidated revenue of $982 million, down 15% year-over-year, was driven by the highest lottery same-store sales growth and Adjusted EBITDA in seven quarters, boosted by robust player demand. The company also reported "sharp improvement" from the second quarter across all major revenue sources.

Global Lottery revenue amounted to $570 million, up 3%, driven by double-digit growth in North America same-store sales. Global Gaming revenue totals $412 million, down 31% on pandemic-related closures and restrictions. IGT reported positive sequential trends as casinos re-open and installed base is gradually reactivated. Operating income was $129 million, compared to $154 million in the prior year.

IGT delivered $285 million in cash from operating activities and $220 million in free cash flow during the third quarter. It reduced net debt by $46 million as reported and $228 million at constant currency. A net loss of $128 million includes $149 million in foreign exchange losses, primarily non-cash. Adjusted net income was $54 million. Lottery profit flow-through and benefit of cost-saving actions led to $354 million in Adjusted EBITDA.

"The resilience of our portfolio, particularly in lottery, and benefits from our swift cost reduction initiatives are on full display in our third quarter results," said Marco Sala, CEO of IGT. "Strong player demand and a host of compelling new games, systems, and digital solutions led to a sharp, sequential improvement in our most important markets. We continue to monitor the evolution and impact of the pandemic around the world. With a simplified organization firmly in place, we are creating a leaner, stronger IGT."

"Robust cash flow generation during the quarter and year-to-date periods have enabled us to improve our liquidity and reduce net debt," said Max Chiara, CFO of IGT. "We are on track to achieve our 2020 temporary cost-reduction targets and have identified a number of initiatives that will enable us to deliver over $200 million of structural savings over the next two years. As a result, the improvement in our profitability should support our continued focus on reducing debt."

IGT saw a 41% increase in Digital & Betting revenue during the third quarter. It launched full-service, in-house U.S. sports betting trading team during the period, and recently established new partnerships with Boyd Gaming and the National Basketball Association (NBA).