IGT Announces Everi Merger and Impressive Casino Finance Results
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IGT Announces Everi Merger and Impressive Finance Results
International Game Technology PLC (NYSE: IGT) revealed its financial performance for the fourth quarter and full year ending December 31, 2023. Alongside significant progress in operating income and EBITDA, the company made headlines with a strategic decision to merge its Global Gaming and PlayDigital divisions with Everi Holdings Inc.
The Key Movements:
- Strategic Merger with Everi: IGT's announcement of merging its Global Gaming and PlayDigital divisions with Everi Holdings Inc. marks a significant strategic move in the gaming and lottery industry. The merger, valued at $6.20 billion, will result in a transformative shift in the company's operations and ownership structure.
- Financial Performance in Q4 2023: Despite challenges such as a decline in net profit, IGT demonstrated strong financial performance in the fourth quarter of 2023. With a 3% increase in consolidated revenue and an 11% growth in operating income, the company showcased resilience and growth across its business segments, particularly in Global Lottery and Global Gaming.
- Optimistic Outlook for 2024: IGT remains optimistic about its future prospects, citing expectations for revenue growth in 2024 driven by organic expansion and the forthcoming merger with Everi. With robust cash generation and historically low leverage levels, the company is poised for further growth and shareholder returns in the coming year.
Vince Sadusky, CEO of IGT, expressed confidence in the strategic move, stating, “We believe the recent determination to split the business and create separate lottery and gaming pure play companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.”
In terms of financial performance, IGT reported a consolidated revenue of $1.1 billion for Q4 2023, reflecting a 3% increase from the same period in the previous year. Notably, Global Lottery revenue surged by 7%, while Global Gaming revenue remained consistent with the prior year. However, PlayDigital revenue experienced a decline due to various factors including a one-time jackpot expense, reduced sports betting volumes, and hold rates in Rhode Island.
Operating income witnessed a robust 11% growth to reach $256 million in Q4 2023, with a notable increase in operating margin across all business segments. Global Lottery operating income rose by 10% to $238 million, Global Gaming operating income advanced by 17% to $80 million, while PlayDigital's operating income remained steady at $17 million.
Moreover, IGT's Adjusted EBITDA increased by 9% to $454 million, primarily driven by higher operating income and amortization.
“We believe the recent determination to split the business and create separate lottery and gaming pure play companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.”
What's The Future Looking Like?
Despite the growth in revenue and operating income, IGT reported a decline in net profit for the fiscal year 2023. Nevertheless, the company achieved several milestones including record operating income of $1.0 billion and record Adjusted EBITDA of $1.8 billion. Notable strategic contracts and developments further underscored IGT's strong performance throughout the year.
Looking ahead to 2024, IGT remains optimistic about revenue growth, with expectations based on organic expansion and the impending merger with Everi. Max Chiara, the company's CFO, expressed confidence in IGT's financial position, highlighting robust cash generation and historically low leverage levels, which position the company for further growth and shareholder returns in the coming year.
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