IGT sees revenue up 4% to $1.1B in Q1, driven by 42% growth in global gaming business

International Game Technology (IGT) announced Tuesday its financial results for the first quarter of 2022, showing revenue of $1.1 billion in a 4% rise compared to 2021, driven by Global Gaming product sales. 

The company’s operating income for the quarter was $252 million, and its operating income margin of 24% exceeds outlook by 200 basis points. Adjusted EBITDA of $433 million matches 2021’s record level at constant currency, and 41% adjusted EBITDA margin recorded this quarter was among the highest in the company’s history.

IGT also returned a record $80 million to shareholders via cash dividend and share repurchases for the second consecutive quarter in Q1, and reaffirmed full-year revenue and profit outlooks. 

In an official press release, Vince Sadusky, CEO of IGT, spoke about these results and said: “The first quarter results clearly reflect the power of our portfolio. The quarter’s strong margin profile highlights the long-term recovery of the gaming business as well as increased levels of lottery play from pre-COVID periods. The company’s initiatives around a simplified corporate structure have resulted in strong liquidity as we continue to invest in product development and return capital to shareholders”.

Max Chiara, CFO of IGT, added: "This quarter marks excellent progress on the profitable growth trajectory outlined at our November 2021 Investor Day. The benefits we are realizing from continued discipline around cost and cash flow management are evident in profit margins that are among the highest in the last three years and in significantly lower interest expense. We are on pace with our leverage target for the year and expect further improvement with the expected proceeds from the announced asset disposition."

During the first quarter of the year, the company achieved several milestones that drove IGT into these satisfactory results. The brand secured a three-year lottery contract extension with the Missouri Lottery, and inked a deal with Lotto Baden-Württemberg in Germany.

The company also executed a broad patent cross-licensing agreement with Aristocrat Leisure Limited; signed an agreement with Atlantic Lottery Corporation; launched IGT PlayCasino games in West Virginia and expanded its digital footprint to five US states and in Ontario; and more.  

However, this quarter saw the company’s Global Lottery revenue decrease to $680 million compared to $749 million in the prior year. This included $95 million in prior-year benefits from Italy gaming hall closures, higher multi-state jackpot activity, and incentive accruals related to LMA agreements. Excluding these benefits, the segment produced a 4% increase year-over-year.

Global Gaming revenue saw an increase of 42% to $325 million, driven by significantly higher product sales revenue and higher active installed base units.

Digital & Betting revenue also went up 24% to $47 million, as double-digit growth across activities continues driven by market expansion. The company’s operating income of $252 saw a decrease of 3% compared to 2021. 

After the quarter ended, on April 11, the company announced an agreement to acquire iGaming content provider and third-party game aggregator, iSoftBet, for €160 million ($168.7 million); transaction expected to close during the second quarter of 2022. 

In February 2022, the company announced an agreement to sell its Italian proximity payment/commercial services business for €700 million ($738 million); transaction expected to close during the third quarter of 2022. 

In January 2022, IGT made changes to its Executive and Board leaders including the retirement of  Lorenzo Pellicioli as Chairperson of the Board of Directors, appointment of Marco Sala as Executive Chair of the Board of Directors, Vincent Sadusky as CEO and Executive Director, and Maria Pinelli and Ashley M. Hunter as members of the Board of Directors. 

In view of these events, and the financial results pertaining to the first quarter of the year, IGT reaffirmed its full-year revenue and profit outlook, and introduced the second quarter of 2022 projections.

For the full year, the company reaffirmed its projection of $4.1 billion to $4.3 billion revenue, with an operating income margin of 20-22%. Cash from operations fluctuating between $850-$1,000 million, and capital expenditures of $400 million.  

For the second quarter, IGT expects revenue of $1 billion to $1.1 billion, and an operating income margin of 20-22%.

See IGT's full Q1 2022 financial report here.