IGT posts slight declines in ’24 as Everi merger looms

International Game Technology (IGT) recently released its financial performance results for the full year, reporting modest revenue and EBITDA declines, marking a significant transition period as it prepares to operate under new ownership.

For the fourth quarter, IGT reported revenues of $651 million (£513.9 million/€619.1 million), reflecting a 4% decrease year-on-year. The adjusted EBITDA for the quarter was $290 million, which represents an 8% decline compared to the previous year. This resulted in a reduction of the adjusted EBITDA margin from 46% to 44%.

IGT attributed these declines to the remarkable product sales revenue secured in the previous year, noting that the recent quarter produced the second highest product sales revenue in the company’s history. This emphasizes the competitive nature and cyclical patterns within the gaming industry.

For the full year ending December 31, IGT’s total revenue amounted to $2.5 billion, a slight 1% decline year-over-year. The company’s full-year adjusted EBITDA stood at $1.1 billion, marking a 4% decrease from $1.2 billion in 2023. However, it is noteworthy that IGT successfully reduced its net debt from $5.1 billion to $4.7 billion during this period, which indicates proactive financial management amidst challenging market conditions.

IGT’s Strategic Shift: Merging with Everi

This financial report serves as a pivotal milestone for IGT, representing its last full year of operations as an independent, publicly traded company. By 2025, IGT plans to divest its lottery division and merge its gaming operations with the fintech and gaming solutions provider, Everi Holdings Inc. This transformational $6.3 billion merger, facilitated by Apollo Global Management, will see the new entity taken private.

The merger marks a significant turnaround for IGT, especially considering an earlier agreement from February that would have kept the combined company publicly listed under the IGT brand. In this new arrangement, current IGT CEO Vince Sadusky will transition to lead the new lottery entity, which will retain public status under a different name. Meanwhile, Hector Fernandez, former CEO of Aristocrat Gaming, has been appointed to lead the merged company.

“The year 2024 will mark a transformative phase as we complete our strategic review and finalize the sale of our Gaming & Digital segment for $4.05 billion,” Sadusky remarked. “Our expertise in developing premier lottery solutions and innovative gaming content is set to enhance long-term growth and shareholder value.”

Focusing on the Lottery Business

During the subsequent earnings call, Sadusky reiterated his optimistic outlook, placing a strong emphasis on IGT’s lottery sector. “We have made substantial progress in separating our gaming and digital businesses,” he stated, expressing confidence in their readiness for the transition to the new corporate structure.

A significant focus for investors is IGT’s ongoing bid for an extension of its contract with the Italian lottery. This contract is crucial for the future growth of IGT’s operations, with a deadline for submission set for March 17. CFO Max Chiara reported that the bidding process is advancing as scheduled, alleviating potential concerns among stakeholders. Additionally, the recent decision by the Texas Lottery to prohibit courier services was discussed, but officials confirmed that this would have minimal impact on operations.

Nick Khin and Gil Rotem will continue to lead IGT’s gaming and digital divisions in the management team of the new organization, with support from Darren Simmons, who oversees Everi’s fintech business. Their positions are pivotal in maintaining operational continuity and driving strategic initiatives in the evolving landscape of the gambling industry.

As IGT transitions into this new phase, the company’s ability to adapt and innovate within the lottery sector, while managing its digital gaming operations effectively, will be key in defining its future success. Stakeholders will be closely monitoring these developments as IGT navigates this substantial transformation.