International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the first quarter ended March 31, 2024. 

• Revenue of $1.07 billion, up 1% from the prior year, driven by strong Global Lottery growth, partially offset by timing of Gaming & Digital product sales
• Operating income of $256 million in line with the prior year while operating income margin of 24.0% exceeded expectations by approximately 400 basis points; excluding Separation & divestiture costs, operating income increased 7% to a record $273 million and the margin expanded 150 basis points
• Adjusted EBITDA of $443 million and Adjusted EBITDA margin of 41.5%; excluding Separation & divestiture costs, Adjusted EBITDA was $461 million and the margin improved 80 basis points to 43.1%
• Upgrading FY'24 outlook on strong Q1'24 results

"Innovative game, hardware, and systems solutions drove better-than-expected Global Lottery and Gaming & Digital performance in the first quarter," said Vince Sadusky, CEO of IGT. "As a result, we are upgrading our full-year 2024 revenue and profit goals, which reflect broad-based momentum across key performance indicators in the balance of the year. We continue to make progress on separating Global Lottery from Gaming & Digital and preparing for the proposed transaction with Everi."

"We delivered a record organic profit performance in the first quarter, if we exclude Separation & divestiture costs," said Max Chiara, CFO of IGT. "The Company is operating from a position of strength with historically low net debt leverage, ample liquidity, and manageable near-term debt maturities."

Key Highlights:

• Announced Gaming & Digital business to be spun off and combined with Everi Holdings, Inc.; transaction expected to close in late 2024/early 2025
• Recognized with top honors at ICE London 2024 awards programs including "Lottery Product of the Year" and "Best Diversity and Inclusion Employer"
• Received a supply contract extension from the UK National Lottery
• Executed licensing agreement with the Maryland Lottery for IGT's patented Cash Pop™ draw-based game
• Mystery of the Lamp™ named "Top Performing New Premium Game" at 2024 EKG Slot Awards Show
• Awarded contract to provide PeakDual™ 27 video lottery terminals across Quebec
• Launched iGaming content in Rhode Island
• Achieved AAA MSCI ESG rating, the highest rating possible, and earned a gold medal sustainability rating from EcoVadis

Financial Highlights:
Consolidated revenue of $1.07 billion, up 1% from $1.06 billion in the prior-year period, driven by strong Global Lottery growth, partially offset by timing of Gaming & Digital product sales

• Global Lottery revenue of $661 million increased 6% year-over-year on significantly higher product sales, driven by delivery of GameTouch™ 28 self-service terminals in Canada and software upgrades in Singapore and Germany, and continued same-store sales strength in Italy
• Gaming & Digital revenue of $406 million, compared to $436 million in the prior year, reflects lower product sales due to fewer terminal unit shipments in the current year and elevated intellectual property and software licenses in the prior year, partially offset by higher service revenue driven by growth in the global installed base, which more than offset lower yields, and a 10% increase in iGaming revenue

Operating income of $256 million, in line with the prior year; excluding Separation & divestiture costs, operating income rose to a record $273 million and the margin increased 150 basis points to 25.6%

• Global Lottery operating income of $258 million, up 8% compared to $240 million in the prior year, on strong Italy same-store sales and higher product sales margin
• Gaming & Digital operating income of $81 million compared to $83 million in the prior-year period as research and development process improvements and easing of supply chain costs are offset by lower revenue and additional investments in the business; operating income margin expanded 80 basis points to 20%
• Corporate support and other expense of $83 million versus $68 million driven by $18 million in Separation & divestiture costs

Adjusted EBITDA of $443 million compared to $449 million in the prior-year period; excluding Separation & divestiture costs Adjusted EBITDA increased 3% to $461 million and Adjusted EBITDA margin expanded 80 basis points to 43.1%

Net interest expense of $72 million compared to $70 million in the prior year

Foreign exchange gain of $15 million, compared to $26 million loss in the prior year, primarily due to non-cash impact of fluctuations in the EUR/USD exchange rate on debt and reduced losses related to the devaluation of the Argentine peso

Other non-operating expense, net of $1 million versus $4 million in the prior year driven by losses on extinguishment of debt in the prior year

Income tax provision of $69 million, compared to $87 million in the prior year, primarily driven by lower valuation allowances on deferred tax assets, partially offset by higher pre-tax income

Net income of $128 million versus $67 million in the prior-year period

Diluted earnings per share of $0.40, versus $0.11 in the prior year, primarily driven by foreign exchange gains, compared to foreign exchange losses in the prior year, and lower provision for income taxes; Adjusted diluted earnings per share of $0.46 compared to $0.49 in the prior year

Net debt of $5.2 billion compared to $5.1 billion at December 31, 2023; Net debt leverage of 2.9x consistent with the December 31, 2023 level

Cash and Liquidity Update
Total liquidity of $1.7 billion as of March 31, 2024; $0.4 billion in unrestricted cash and $1.3 billion in additional borrowing capacity from undrawn credit facilities

Other Developments
Marco Drago to step down from his role as non-executive director of the IGT Board of Directors following the Annual General Meeting on May 14, 2024; Enrico Drago appointed as a non-executive director

Comparability of Results
All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2024 are calculated using the same foreign exchange rates as the corresponding 2023 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company's financial performance. Management believes these non-GAAP financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with U.S. GAAP. Amounts reported in millions are computed based on amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.