IGT has reported a slight dip in revenue and adjusted EBITDA for the third quarter of 2024, but CEO Vince Sadusky has expressed confidence in the direction the company is heading in.
During the quarter, the company also announced the sale of its Gaming & Digital business to funds managed by affiliates of Apollo Global Management for $4.05bn, a transaction which it expects to complete by the end of Q3 2025. The deal is part of a merger between the Gaming & Digital business and Everi Holdings.
As such, IGT has stated that this is the first quarter in which “the results of the Gaming & Digital business are classified as discontinued operations”.
The company has also provided guidance for Q4 and for the full year for continuing operations, reporting that they expect revenue up to $690m and $2.55bn respectively for each measuring period.
Publishing its Q3 results, IGT declared revenue for the quarter of $587m, down 2% year-over-year (Q3 2023: $601m) and 3% in constant currency (cc). For the year-to-date, ending 30 September, the company reported a revenue of $1.86bn (2023: $1.85bn).
Q3’s revenue was attributed to “sustained momentum in Italy and improved US instant ticket and draw game wagers”.
Gross profit was also down 5% YoY and 7% in cc during the quarter to $263m (2023: $278m), while operating income fell by 33% YoY to $110m (2023: $163m). YTD, gross profit had declined 2% YoY to $882m (2023: $896m), while operating income was down 9% YoY to $507m (2023: $555m).
Operating income was “driven by a $38m restructuring charge associated with OPtiMa 3.0, a program focused on optimising general & administrative and operating activities following transformational actions over the last several years”.
Q3 net income stood at $43m, down from Q3 2023’s $123m. Broken down, income from discontinued operations stood at $88m (2023: $46m), but income from continuing operations fell to a loss of $46m (2023: $77m income).
Adjusted EBITDA for the quarter was down 6% YoY at $264m (2023: $279m) with a margin of 44.9% (2023: 46.4%). YTD, adjusted EBITDA was down 2% YoY to $880m (2023: $898m) with a margin of 47.3% (2023: 48.6%). IGT noted that the figures highlight the “attractive profit profile of pure play lottery business”.
Reflecting on the Q3 results, Sadusky noted: “Our third-quarter and year-to-date performance underscores the strength and resilience of our business model marked by our scale, attractive margin structure and strong cash generation.
“Over the first nine months, we generated $1.9bn in revenue, led by steady Italy growth and improved third quarter trends in the US. We are excited to build upon a solid foundation as we transform into a leaner, more focused global lottery pure play and capitalise on attractive industry dynamics.”
YTD cash from operations was $724m, with $489m from continuing operations, which represents over 85% of YTD consolidated free cash flow.
Looking ahead, IGT expects Q4 revenue to be between $640m to $690m and adjusted EBITDA between $280m to $300m. As for the full year, revenue is expected to be between $2.5bn to $2.55bn and adjusted EBITDA between $1.16bn to $1.18bn.
CFO Max Chiara said: “Sustained cash flow generation in the first nine months was predominantly driven by continuing operations.
“The value of IGT is enhanced on a go-forward basis by a low pro forma leverage profile and by the launch of a cost optimisation initiative as we look to right-size the organisation while supporting long-term growth initiatives.”
Bally’s Corporation has announced that its stockholders have approved the company’s definitive merger agreement with The Queen Casino & Entertainment Inc (Queen), a portfolio company majority-owned by Standard General LP.
Earlier this year in July, Bally’s entered into a definitive merger agreement with Standard General, its largest stockholder, which will acquire the company’s outstanding shares for $18.25 per share.
In a statement on its website, the company said that its stockholders approved the merger at a special meeting held on 19th November, in addition to “compensation that may or will become payable by Bally’s to its named executive officers in connection with the transactions contemplated by the merger agreement” on a non-binding advisory basis.
The statement read: “The merger agreement has been adopted by the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock as of the October 21, 2024 record date for the Special Meeting and the affirmative vote of the holders of a majority of the holders of the outstanding shares of the Company’s common stock as of such record date, excluding those held by Standard General L.P., Sinclair Broadcast Group, Inc., Noel Hayden and certain executive officers and a director of the company.
“Stockholders who validly elected to have their Company shares remain issued and outstanding following the Company merger (Rolling Share Election) as of 5:00 p.m. ET today (November 19, 2024), will be assigned a new CUSIP number and their shares will continue to be traded on the New York Stock Exchange (NYSE) under the new ticker symbol “BALY.T” (Rolling Company Shares), prior to the effective time of the Company merger (Company Effective Time).”
Bally’s also noted that it has the right to open one or more new Rolling Share Election periods before the Company Effective Time, subject to special committee approval, adding that it will file a form/report with the US Securities and Exchange Commission (SEC) to notify stockholders of any such additional election period and the related deadlines and procedures.
The statement concluded: “At the Company Effective Time, the Rolling Company Shares will remain outstanding, and it is expected that such shares will revert to the original “BALY” ticker symbol. The Rolling Company Shares will remain registered with the SEC and is expected to continue trading on the NYSE or another securities exchange in the United States, based on applicable listing requirements.
“Closing of the transactions contemplated by the merger agreement is anticipated to occur in the first half of 2025 and remain subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions.
“A final report on the results of the Special Meeting will be made on a Form 8-K to be filed with the SEC.”
Earlier this month, Bally’s published its Q3 2024 financial results, reporting growth for its UK and North American online operations, but a drop in overall revenue and International Interactive revenue compared to the same period the previous year.
