IGT reported revenue of $1.06bn in Q3 as the business reduced its net debt leverage ratio to an all-time low of 3.1x.
Significant events during the quarter included the completion of the sale of IGT’s Italian proximity payments business, generating some €700m in gross proceeds, while the firm also completed its €160m acquisition of iGaming content supplier and aggregator, iSoftBet.
Q3 revenue represented a 7.7% increase year-on-year, or some 14% on a constant currency basis.IGT achieved the result through growth in its Global Gaming and Digital & Betting divisions, which grew by 31.1% and 25.6% respectively, helping to offset a 4% revenue reduction in Global Lottery revenue, the firm’s largest division which still continued to bring in the lion’s share of income.
The Global Lottery segment generated $626m for the business in Q3, representing 59.1% of overall revenue, while the Global Gaming division generated a further 35.8% and Digital & Betting made up the remaining 5.1%.
It is worth noting that on a constant currency basis, Global Lottery revenue climbed around 4% year-on-year.
By geography, the US and Canada represented IGT’s best earning region, generating $651m in revenue or 61.4% of the total. That represented a year-on-year increase of 17.1%.
Italy, another of IGT’s key markets, generated a further $247m, 23.3% of total revenue, though the segment was down 16% year-on-year. The Rest of World segment generated the remaining 15.2% of revenue at $161m, an increase of 20.1%.
Those revenue figures left the business with a total operating income of $211m, down just marginally from $212m in the prior-year period.
The firm’s operating income together with a more than 100% increase in the net cash provided by operating activities (to $236m) gave the business a huge boost in diluted earnings per share for the quarter, up from just $0.31 in Q3 2021 to $1.30 in the latest quarter.
As a result, the firm returned a record $224m to shareholders via dividends and share repurchases through to mid-October.Adjusted EBITDA for Q3 came in at $402m, a slight reduction from $407m in the previous year.
Crucially, IGT was able to pay down its net debt during the quarter, reducing the figure year-on-year by 16.9% to $5.08bn.
“Our strategy to innovate, optimise, and grow is fuelling progress across the portfolio,” said Max Chiara, IGT’s CFO.
“Robust year-to-date cash flows and proceeds from the sale of the Italy proximity payments/commercial services business, in addition to proactive liability management, enabled us to reduce debt to the lowest level ever.
“This enhanced credit profile provides greater financial flexibility to execute on the broadened, balanced capital allocation strategy presented at the Investor Day last November.”
Other significant achievements for the business in Q3 include the strengthening of its lottery contract portfolio, with deals including a four-year extension to its lottery contract in New York, a seven-year extension in Georgia as the state lottery’s primary technology supplier, and a new 10-year instant ticket printing and services contract in Texas.IGT CFO Max Chiara: “Robust year-to-date cash flows and proceeds from the sale of the Italy proximity payments/commercial services business, in addition to proactive liability management, enabled us to reduce debt to the lowest level ever.”
IGT also agreed a deal to deliver up to 7,200 retail lottery terminals to Santa Casa de Misericórdia de Lisboa in Portugal.
Looking to the current quarter, IGT said it expects revenue of approximately $1bn in Q4, with an operating income margin of around 18-19%.
That would leave the business with full-year revenue between $4.1bn and $4.2bn, cash from operations of around $850m-$950m and capital expenditure of around $350m.