International Game Technology PLC(IGT)

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Brightstar Lottery Group and IGT Group Data Breach Exposes Personal Information: Murphy Law Firm Investigates Legal Claims
Globenewswire· 2025-10-06 20:58
OKLAHOMA CITY, Oct. 06, 2025 (GLOBE NEWSWIRE) -- Murphy Law Firm is investigating claims on behalf of all individuals whose personal and confidential information was compromised in the data breach involving Brightstar Lottery Group and IGT Group. To join the class action lawsuit, visit our site HERE. On or around November 17, 2024, Brightstar Lottery Group (“Brightstar”) and IGT Group (“IGT”) became aware of suspicious activity on its computer system, indicating a data breach. Based on a subsequent forensic ...
International Game Technology PLC(IGT) - 2025 Q2 - Quarterly Report
2025-07-29 11:30
[Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines the company's forward-looking statements regarding future plans, strategies, and financial performance, along with associated risks - Forward-looking statements cover future plans, strategies, expected growth, transactions (including IGT Gaming sale impacts), trends, financial condition, and measures like **revenue, operating income, and capital expenditures**[7](index=7&type=chunk) - Key risk factors include **macroeconomic, regulatory, and political uncertainty**, foreign currency exchange rate fluctuations, changes in interest and inflation rates, and impacts from increased U.S. national deficits[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of Brightstar Lottery PLC's financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements of Brightstar Lottery PLC, including the Balance Sheets, Statements of Operations, Comprehensive Income, Cash Flows, and Shareholders' Equity, along with accompanying notes, for the periods ended June 30, 2025 and December 31, 2024 (for balance sheet) and June 30, 2025 and 2024 (for income and cash flow statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position at specific dates, detailing assets, liabilities, and equity **Condensed Consolidated Balance Sheets (Selected Items):** | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :--------------------------------- | :-------------------------- | :----------------------------- | :------------------ | | Cash and cash equivalents | 1,309 | 584 | 725 | | Assets held for sale | 4,957 | 4,765 | 192 | | Total current assets | 7,057 | 6,165 | 892 | | Total assets | 11,238 | 10,278 | 960 | | Current portion of long-term debt | 1,861 | 208 | 1,653 | | Liabilities held for sale | 981 | 1,142 | (161) | | Total current liabilities | 4,126 | 2,687 | 1,439 | | Total liabilities | 9,226 | 8,217 | 1,009 | | Total shareholders' equity | 2,012 | 2,061 | (49) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss over specific periods **Condensed Consolidated Statements of Operations (Selected Items):** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total revenue | 631 | 613 | 1,214 | 1,274 | | Total operating expenses | 492 | 434 | 937 | 877 | | Operating income | 139 | 179 | 277 | 397 | | Total non-operating expenses | 149 | 52 | 231 | 97 | | (Loss) income from continuing operations before taxes | (10) | 127 | 46 | 300 | | Provision for income taxes | 50 | 43 | 97 | 100 | | (Loss) income from continuing operations | (60) | 84 | (52) | 200 | | Income from discontinued operations, net of tax | 40 | — | 92 | 13 | | Net (loss) income | (20) | 85 | 40 | 213 | | Net (loss) income attributable to Brightstar Lottery PLC | (58) | 42 | (31) | 123 | - Net (loss) income attributable to Brightstar Lottery PLC per common share - basic for the three months ended June 30, 2025, was **($0.29)**, a decrease from $0.21 in the prior year; for the six months, it was **($0.15)**, down from $0.61[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's comprehensive income, including net income and other comprehensive income items **Condensed Consolidated Statements of Comprehensive Income (Selected Items):** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net (loss) income | (20) | 85 | 40 | 213 | | Foreign currency translation adjustments, net of tax | 17 | 1 | 29 | (9) | | Unrealized (loss) gain on hedges, net of tax | (5) | — | (7) | 2 | | Other comprehensive income (loss), net of tax | 13 | 1 | 22 | (8) | | Comprehensive (loss) income | (8) | 86 | 62 | 205 | | Comprehensive (loss) income attributable to Brightstar Lottery PLC | (65) | 45 | (42) | 135 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities **Condensed Consolidated Statements of Cash Flows (Selected Items):** | Metric | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | | Net cash provided by operating activities from continuing operations | 433 | 315 | 118 | | Net cash provided by operating activities from discontinued operations | 101 | 148 | (47) | | Net cash provided by operating activities | 534 | 463 | 71 | | Net cash used in investing activities from continuing operations | (175) | (76) | (99) | | Net cash used in investing activities from discontinued operations | (85) | (104) | 19 | | Net cash used in investing activities | (260) | (180) | (80) | | Net cash provided by (used in) financing activities from continuing operations | 581 | (413) | 994 | | Net cash used in financing activities from discontinued operations | (143) | (20) | (123) | | Net cash provided by (used in) financing activities | 438 | (433) | 871 | | Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | 712 | (149) | 861 | | Cash and cash equivalents and restricted cash and cash equivalents at the end of the period | 1,546 | 559 | 987 | [Condensed Consolidated Statements of Shareholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) This section presents changes in the company's equity accounts, including net income, dividends, and other comprehensive income **Condensed Consolidated Statements of Shareholders' Equity (Selected Items):** | Metric | December 31, 2024 ($ millions) | March 31, 2025 ($ millions) | June 30, 2025 ($ millions) | | :--------------------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Total Brightstar Lottery PLC's Equity | 1,652 | 1,642 | 1,531 | | Non-controlling Interests | 409 | 353 | 481 | | Total Shareholders' Equity | 2,061 | 1,994 | 2,012 | | Net (loss) income attributable to Brightstar Lottery PLC (Q2 2025) | N/A | N/A | (58) | | Dividends declared (Q2 2025) | N/A | N/A | (41) | | Capital increase - non-controlling interests (Q2 2025) | N/A | N/A | 180 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering business description, accounting policies, discontinued operations, revenue, and other financial items [1. Description of Business](index=12&type=section&id=1.%20Description%20of%20Business) This section outlines the company's business activities and recent strategic changes - The company changed its corporate name from International Game Technology PLC to **Brightstar Lottery PLC** in July 2025[24](index=24&type=chunk) - Brightstar Lottery is now a **pure-play global lottery company**, focusing on lottery operations, retail and digital solutions, and award-winning lottery games[25](index=25&type=chunk) - The sale of the Gaming & Digital business (IGT Gaming) to Apollo Funds was completed on **July 1, 2025**[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section details the key accounting principles and methods used in preparing the financial statements - Financial statements are prepared in accordance with **GAAP for interim financial information**, with amounts stated in millions of U.S. dollars[27](index=27&type=chunk)[28](index=28&type=chunk) - IGT Gaming's financial results are reflected as **discontinued operations** and its assets/liabilities as held for sale for all periods presented, with retrospective reclassifications[29](index=29&type=chunk) - ASU No. 2023-09, enhancing income tax disclosures, will be applied prospectively from **December 31, 2025**[33](index=33&type=chunk) [3. Discontinued Operations and Assets Held for Sale](index=13&type=section&id=3.%20Discontinued%20Operations%20and%20Assets%20Held%20for%20Sale) This section provides details on the financial impact and classification of the IGT Gaming business as a discontinued operation - IGT Gaming is presented as a **discontinued operation** and its assets/liabilities as held for sale due to the strategic shift from the transaction[35](index=35&type=chunk) **IGT Gaming Assets and Liabilities Held for Sale:** | Category | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | | :---------------------------------------------------------------- | :-------------------------- | :----------------------------- | | Assets held for sale | 4,957 | 4,765 | | Liabilities held for sale | 981 | 1,142 | **Summarized Statement of Operations for IGT Gaming Discontinued Operations:** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total revenue | 402 | 436 | 796 | 842 | | Income from discontinued operations, net of tax | 40 | — | 92 | 13 | - Brightstar will provide **transition services** (IT, HR, back-office) and license intellectual property to IGT Gaming for up to two years post-transaction[37](index=37&type=chunk)[38](index=38&type=chunk) [4. Revenue Recognition](index=15&type=section&id=4.%20Revenue%20Recognition) This section details the company's revenue streams and how revenue is recognized from contracts with customers **Disaggregation of Revenue:** | Revenue Type | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Service revenue | 588 | 586 | 1,146 | 1,205 | | Product sales | 42 | 27 | 68 | 69 | | Total revenue | 631 | 613 | 1,214 | 1,274 | - Contract assets were **$52 million** at June 30, 2025, and contract liabilities were **$53 million**; **$19 million** of revenue recognized in the six months ended June 30, 2025, was from beginning-of-period contract liabilities[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - Approximately **$863 million** in transaction price is allocated to unsatisfied performance obligations for contracts greater than one year, with **28%** expected to be recognized within 12 months[44](index=44&type=chunk) [5. Trade and Other Receivables](index=15&type=section&id=5.%20Trade%20and%20Other%20Receivables) This section provides a breakdown of the company's trade and other receivables, net of allowances **Trade and Other Receivables, net:** | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :-------------------------- | :----------------------------- | | Trade and other receivables, gross | 429 | 469 | | Allowance for credit losses | (1) | (1) | | Trade and other receivables, net | 428 | 468 | - The company factored **$217 million** in trade receivables during the six months ended June 30, 2025, with cash received reflected as operating activities[47](index=47&type=chunk) [6. Inventories, net](index=16&type=section&id=6.%20Inventories%2C%20net) This section details the composition of the company's inventories, net of reserves **Inventories, net:** | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------- | :-------------------------- | :----------------------------- | | Raw materials | 26 | 25 | | Work in progress | 3 | 3 | | Finished goods | 90 | 87 | | Inventories, gross | 119 | 114 | | Excess and obsolescence reserve | (2) | (2) | | Inventories, net | 117 | 113 | [7. Leases](index=16&type=section&id=7.%20Leases) This section provides information on the company's lease assets, liabilities, and associated expenses **Lease Assets and Liabilities:** | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :-------------------------- | :----------------------------- | | Operating ROU asset | 99 | 102 | | Finance ROU asset, net | 17 | 16 | | Total lease assets | 117 | 118 | | Operating lease liability, current | 25 | 24 | | Finance lease liability, current | 8 | 7 | | Operating lease liability, non-current | 79 | 83 | | Finance lease liability, non-current | 14 | 14 | | Total lease liabilities | 127 | 128 | **Components of Lease Expense (Six Months Ended June 30):** | Metric | 2025 ($ millions) | 2024 ($ millions) | | :---------------------- | :---------------- | :---------------- | | Operating lease costs | 16 | 15 | | Finance lease costs | 3 | 3 | | Short-term lease costs | 12 | 12 | | Variable lease costs | 7 | 7 | - Weighted-average remaining lease terms for operating leases were **2.51 years** and for finance leases were **3.06 years** at June 30, 2025[51](index=51&type=chunk) [8. Restructuring](index=18&type=section&id=8.%20Restructuring) This section details the company's restructuring activities, including plans, expenses, and liabilities - Phase 2 of the **OPtiMa 3.0 restructuring plan** commenced in Q2 2025, focusing on realigning and optimizing general and administrative activities[54](index=54&type=chunk) **Consolidated Restructuring Expense:** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2025 ($ millions) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Severance and Related Employee Costs | 21 | 21 | | Total | 21 | 21 | **Rollforward of Restructuring Liability (Six Months Ended June 30, 2025):** | Plan | Balance at beginning of period ($ millions) | Restructuring expense, net ($ millions) | Cash payments ($ millions) | Balance at end of period ($ millions) | | :-------------------------------- | :--------------------------------------- | :------------------------------------ | :------------------------- | :-------------------------- | | OPtiMa 3.0 Plan Phase 1 | 29 | — | (13) | 18 | | OPtiMa 3.0 Plan Phase 2 | — | 23 | — | 23 | | 2021 Italian Workforce Redundancies | 16 | — | (2) | 16 | | Total | 46 | 23 | (15) | 56 | [9. Debt](index=19&type=section&id=9.%20Debt) This section provides information on the company's debt obligations, including types, amounts, and related interest expenses **Debt Obligations (Selected Items):** | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :-------------------------- | :----------------------------- | | Senior Secured Notes | 2,658 | 4,050 | | Euro Term Loan Facilities | 1,631 | 619 | | Revolving Credit Facility | 400 | 485 | | Long-term debt, less current portion | 4,688 | 5,153 | | Current portion of long-term debt | 1,861 | 208 | | Total debt | 6,549 | 5,361 | - The company entered into a new **€1 billion senior facilities agreement (2030 Facilities)** in March 2025, with Facility A for general corporate purposes and Facility B for the Italian Lotto license upfront fee[59](index=59&type=chunk)[60](index=60&type=chunk) **Interest Expense, net (Six Months Ended June 30):** | Metric | 2025 ($ millions) | 2024 ($ millions) | | :---------------------- | :---------------- | :---------------- | | Interest expense, net | 94 | 106 | - The 2030 Facilities Agreement limits annual dividends and share repurchases to **$400 million or $550 million** based on public debt ratings, with the limit eliminated if ratings are higher[62](index=62&type=chunk) [10. Commitments and Contingencies](index=20&type=section&id=10.%20Commitments%20and%20Contingencies) This section outlines the company's legal, regulatory, and administrative proceedings and related financial provisions - The company is subject to various **legal, regulatory, and administrative proceedings**, including claims, injunctions, and ethics inquiries[66](index=66&type=chunk)[67](index=67&type=chunk) - Provisions for all legal proceedings were **$4 million** at June 30, 2025[68](index=68&type=chunk) [11. Income Taxes](index=21&type=section&id=11.%20Income%20Taxes) This section provides details on the company's income tax provision, effective tax rates, and uncertain tax positions **Income Taxes (Selected Items):** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | (Loss) income before provision for income taxes | (10) | 127 | 46 | 300 | | Provision for income taxes | 50 | 43 | 97 | 100 | | Effective income tax rate | (482.6)% | 33.6% | 212.9% | 33.3% | - The effective tax rates for 2025 were significantly impacted by **operating losses in jurisdictions without tax benefits**, foreign rate differentials, and international tax provisions[69](index=69&type=chunk) - Reserves for uncertain tax positions were **$17 million**, and accrued interest and penalties were **$29 million** at June 30, 2025[71](index=71&type=chunk) - The "One Big Beautiful Bill Act" (OBBBA) was enacted in the U.S. on July 4, 2025, introducing significant tax measures, the impact of which is currently being assessed[73](index=73&type=chunk) [12. Shareholders' Equity](index=21&type=section&id=12.%20Shareholders%27%20Equity) This section details changes in shareholders' equity, including dividends and accumulated other comprehensive income - A quarterly cash dividend of **$0.20 per share** was paid on June 12, 2025[74](index=74&type=chunk) - A special cash dividend of **$3.00 per share** (approx. $609 million) was declared on July 1, 2025, payable on July 29, 2025[75](index=75&type=chunk) - A quarterly cash dividend of **$0.20 per share** (approx. $41 million) was declared on July 24, 2025, payable on August 26, 2025[75](index=75&type=chunk) **Accumulated Other Comprehensive Income (AOCI) Attributable to Brightstar Lottery PLC:** | Metric | December 31, 2024 ($ millions) | June 30, 2025 ($ millions) | | :------------------------------------------------- | :----------------------------- | :-------------------------- | | Balance | 516 | 505 | [13. Earnings Per Share](index=23&type=section&id=13.%20Earnings%20Per%20Share) This section presents the company's basic and diluted earnings per share calculations **Earnings Per Share (Selected Items):** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net (loss) income from continuing operations attributable to Brightstar Lottery PLC per common share - basic | (0.47) | 0.21 | (0.59) | 0.57 | | Net (loss) income attributable to Brightstar Lottery PLC per common share - basic | (0.29) | 0.21 | (0.15) | 0.61 | | Weighted-average shares - basic (millions) | 203 | 201 | 203 | 201 | - Stock options and unvested restricted stock awards were excluded from diluted EPS computation in periods of net loss due to their **antidilutive effect**[78](index=78&type=chunk) [14. Segment Information](index=23&type=section&id=14.%20Segment%20Information) This section describes the company's operating segments and how performance is evaluated - The company operates as a **single segment**, a pure-play lottery business, providing sales, operations, product development, technology, and support to lottery customers worldwide[79](index=79&type=chunk) - The CODM uses **net income from continuing operations** to evaluate capital allocation strategy, including reinvestment, debt repayment, dividends, or acquisitions[80](index=80&type=chunk) [15. Related Parties](index=23&type=section&id=15.%20Related%20Parties) This section discloses transactions and relationships with related parties - Enrico Drago, a former CEO of PlayDigital and Board member, had his synthetic equity award modified multiple times, including changes to valuation methodology and accelerated vesting upon the IGT Gaming sale[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) [16. Subsequent Event](index=24&type=section&id=16.%20Subsequent%20Event) This section reports significant events that occurred after the balance sheet date but before the financial statements were issued - The sale of IGT Gaming was completed on **July 1, 2025**, with estimated proceeds of **$4.1 billion to $4.2 billion** and an expected gain in Q3 2025[86](index=86&type=chunk) - Proceeds from the IGT Gaming sale are allocated as follows: **$2.0 billion for debt reductions**, **$1.1 billion for shareholder returns** (special dividend and share repurchase), **$500 million for Italy Lotto license payments**, and **$400 million for general corporate purposes**[90](index=90&type=chunk) - The company redeemed **$750 million of 4.125% Senior Secured U.S. Dollar Notes** due April 2026 and **$879 million of 3.500% Senior Secured Euro Notes** due June 2026, and prepaid **$351 million and $53 million** of Term Loan Facilities and Revolving Credit Facilities, respectively[87](index=87&type=chunk) - A new **$500 million share repurchase program** was authorized on July 1, 2025, replacing the prior program[89](index=89&type=chunk) - Brightstar Lottery was awarded the **Italy Lotto License**, effective December 1, 2025, with the first **€500 million installment** paid on July 17, 2025[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Brightstar Lottery PLC's financial condition and results of operations for the three and six months ended June 30, 2025 and 2024. It discusses business overview, key factors affecting operations, critical accounting estimates, and detailed analysis of revenues, costs, margins, and cash flows, with IGT Gaming presented as discontinued operations [Business Overview](index=26&type=section&id=Business%20Overview) This section provides an overview of Brightstar Lottery's business model and strategic direction - Brightstar Lottery is a **pure-play global lottery company**, providing integrated lottery solutions, including lottery management services, instant lottery systems, and iLottery platforms[95](index=95&type=chunk)[96](index=96&type=chunk) - The financial results of IGT Gaming are presented as **discontinued operations**, and its assets and liabilities as held for sale, reflecting the company's transition to a pure-play lottery business[98](index=98&type=chunk) [Key Factors Affecting Operations and Financial Condition](index=26&type=section&id=Key%20Factors%20Affecting%20Operations%20and%20Financial%20Condition) This section discusses the significant external and internal factors influencing the company's performance and financial health - Global operations are affected by macroeconomic factors such as **tightening monetary policy, increased U.S. national deficits, changing inflation rates, foreign exchange rate fluctuations, and geopolitical conflicts**[99](index=99&type=chunk) - These events did not have a **material impact** on the company's supply chain or results of operations during the six months ended June 30, 2025, but future impacts are unknown[99](index=99&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) This section highlights the accounting estimates that require significant judgment and can materially impact financial reporting - Financial statements rely on **estimates, judgments, and assumptions**, which are based on historical experience and reasonable assumptions[100](index=100&type=chunk) - No **material changes** to critical accounting estimates were made from the 2024 Form 20-F[100](index=100&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes Brightstar Lottery PLC's financial performance, detailing revenues, costs, gross margins, operating expenses, and non-operating items for the periods presented [Revenues and Key Performance Indicators](index=27&type=section&id=Revenues%20and%20Key%20Performance%20Indicators) This section provides an analysis of the company's revenue streams and key metrics driving performance **Total Revenue:** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Total revenue | 631 | 613 | 18 | +3 | 1,214 | 1,274 | (60) | -5 | - Q2 2025 revenue increase was driven by **product sales** and higher instant ticket and draw-game same-store sales in Italy (**+3.7%**) and Rest of World (**+8.4%**), offset by reduced LMA incentive revenue and lower U.S. MSJP activity (**-34.5%**)[102](index=102&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk) - H1 2025 revenue decrease was primarily due to a **$52 million reduction in LMA incentive revenue** and a **41.2% drop in U.S. MSJP same-store sales**, partially offset by instant and draw game revenues in Italy (**+1.4%**) and Rest of World (**+6.8%**)[103](index=103&type=chunk)[108](index=108&type=chunk)[111](index=111&type=chunk) [Cost of Revenue](index=29&type=section&id=Cost%20of%20Revenue) This section analyzes the costs directly associated with generating the company's revenues **Cost of Revenue:** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Cost of services | 321 | 304 | 17 | +6 | 626 | 608 | 18 | +3 | | Cost of product sales | 35 | 22 | 13 | +61 | 57 | 48 | 10 | +20 | - Q2 2025 cost of services increased due to higher point-of-sale consumables, postage & freight, marketing, and depreciation; cost of product sales increased in line with product sales[114](index=114&type=chunk) - H1 2025 cost of services increased due to a **420 basis point rise** in cost of services as a percentage of service revenue, driven by higher depreciation, payroll, and licensing costs; cost of product sales increased due to changes in product mix[115](index=115&type=chunk)[116](index=116&type=chunk) [Gross Margins](index=31&type=section&id=Gross%20Margins) This section examines the company's profitability after accounting for the cost of revenue **Gross Margins:** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (bps) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (bps) | | :-------------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Service gross margin % | 45% | 48% | (280) | 45% | 50% | (420) | | Product gross margin % | 17% | 18% | (100) | 16% | 31% | (1480) | - Service gross margin decline was mainly due to **reduced LMA incentive revenues**, which impact revenue without a corresponding cost reduction[117](index=117&type=chunk) - Product gross margin for six months declined due to **reduced product sales** and a less favorable product mix, specifically a decrease in higher-margin systems/software sales and an increase in lower-margin ticket printing sales[118](index=118&type=chunk) [Operating expenses](index=31&type=section&id=Operating%20expenses) This section analyzes the company's selling, general, administrative, research and development, and other operating costs **Operating Expenses (Selected Items):** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Selling, general and administrative | 100 | 96 | 4 | +4 | 204 | 198 | 6 | +3 | | Research and development | 12 | 11 | 1 | +9 | 23 | 22 | 1 | +5 | | Restructuring | 21 | — | 21 | >+200 | 21 | — | 21 | >+200 | | Other operating expense, net | 3 | 1 | 2 | >+200 | 5 | 1 | 4 | >+200 | - Restructuring costs increased significantly due to the initiation of **Phase 2 of the OPtiMa 3.0 plan**, primarily severance and related employee costs[121](index=121&type=chunk) - Other operating expenses increased due to **professional advisory fees** and costs related to rebranding the Lottery business as part of separation activities[122](index=122&type=chunk) [Operating Margins](index=32&type=section&id=Operating%20Margins) This section evaluates the company's profitability from its core operations before non-operating items **Operating Income and Margin:** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (bps) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (bps) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :----------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :----------- | | Operating income | 139 | 179 | (40) | N/A | 277 | 397 | (120) | N/A | | Operating margin | 22% | 29% | (700) | N/A | 23% | 31% | (800) | N/A | - The decrease in operating margin was primarily due to the **reduction in LMA incentive revenues** without associated cost reductions and higher costs from Phase 2 of the OPtiMa 3.0 restructuring plan[123](index=123&type=chunk) [Non-operating expenses](index=32&type=section&id=Non-operating%20expenses) This section details expenses and income not directly related to the company's primary business operations **Non-Operating Expenses (Selected Items):** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Interest expense, net | 49 | 53 | (4) | -8 | 94 | 106 | (12) | -11 | | Foreign exchange loss (gain), net | 99 | (4) | 103 | >+200 | 131 | (16) | 147 | >+200 | | Other non-operating expense, net | 2 | 3 | (1) | -44 | 5 | 7 | (2) | -23 | | Provision for income taxes | 50 | 43 | 7 | +16 | 97 | 100 | (3) | -3 | - Foreign exchange loss significantly increased due to **fluctuations in the Euro to U.S. dollar exchange rate** on internal and external debt[124](index=124&type=chunk) - The increase in the effective tax rate for both periods was primarily related to a significant increase in **non-deductible foreign exchange losses** in the Parent[124](index=124&type=chunk)[125](index=125&type=chunk) [Income from discontinued operations](index=33&type=section&id=Income%20from%20discontinued%20operations) This section reports the net income or loss generated by the IGT Gaming business, classified as discontinued operations **Income from Discontinued Operations, net of tax:** | Metric | 3 Months Ended June 30, 2025 ($ millions) | 3 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | 6 Months Ended June 30, 2025 ($ millions) | 6 Months Ended June 30, 2024 ($ millions) | Change ($ millions) | Change (%) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Income from discontinued operations, net of tax | 40 | — | 39 | >+200 | 92 | 13 | 79 | >+200 | - The increase in income from discontinued operations was primarily due to **lower depreciation and amortization** while held for sale, despite a decline in IGT Gaming revenues and increased operating expenses from write-offs and litigation settlements[126](index=126&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Brightstar Lottery PLC's sources and uses of cash, including operating, investing, and financing activities, and its overall liquidity position and capital management strategies [Overview](index=33&type=section&id=Overview) This section provides a general overview of the company's liquidity position and capital management strategy - Primary liquidity sources are **cash flows from operations and financing activities**, expected to be sufficient for short and long-term obligations[127](index=127&type=chunk)[128](index=128&type=chunk) **Total Available Liquidity:** | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :----------------------------- | :------------------ | | Revolving Credit Facilities | 1,582 | 1,364 | 218 | | Cash and cash equivalents | 1,309 | 584 | 725 | | Total Liquidity | 2,891 | 1,948 | 943 | - At June 30, 2025, approximately **35% of the company's debt portfolio** was exposed to interest rate fluctuations[132](index=132&type=chunk) **Cash and Cash Equivalents by Currency (June 30, 2025):** | Currency | Amount ($ millions) | Percentage (%) | | :------------- | :------------------ | :------------- | | Euros | 1,132 | 86 | | U.S. dollars | 80 | 6 | | Other currencies | 97 | 7 | | Total | 1,309 | 100 | [Cash Flow Summary](index=35&type=section&id=Cash%20Flow%20Summary) This section summarizes the cash flows from continuing and discontinued operations across operating, investing, and financing activities **Cash Flow Summary (Continuing Operations, Six Months Ended June 30):** | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | | :------------------------------------------------- | :---------------- | :---------------- | :------------------ | | Net cash provided by operating activities from continuing operations | 433 | 315 | 118 | | Net cash used in investing activities from continuing operations | (175) | (76) | (99) | | Net cash provided by (used in) financing activities from continuing operations | 581 | (413) | 994 | - The increase in operating cash flow was driven by **$86 million favorability in income tax and interest payment timing** and a **$59 million increase in cash collections**[137](index=137&type=chunk) - Investing cash flow increased due to a **$100 million increase in capital expenditures** for systems, equipment, and other assets in California, Colorado, and Kentucky[138](index=138&type=chunk) - Financing cash flow improved due to **$851 million net increase from debt proceeds exceeding payments** (2030 Facilities Agreement) and a **$175 million increase in capital contributions** from non-controlling interests[139](index=139&type=chunk) **Cash Flow Summary (Discontinued Operations, Six Months Ended June 30):** | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | | :------------------------------------------------- | :---------------- | :---------------- | :------------------ | | Net cash provided by operating activities from discontinued operations | 101 | 148 | (47) | | Net cash used in investing activities from discontinued operations | (85) | (104) | 19 | | Net cash used in financing activities from discontinued operations | (143) | (20) | (123) | [Dividends](index=36&type=section&id=Dividends) This section provides details on the company's dividend payments and declarations **Dividends Paid/Declared:** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Dividends paid/declared per share | $0.20 | $0.20 | $0.40 | $0.40 | | Total dividends paid/declared ($ millions) | 41 | 40 | 81 | 80 | - A special cash dividend of **$3.00 per share** (approx. $609 million) was declared on July 1, 2025, payable on July 29, 2025[142](index=142&type=chunk) - A quarterly cash dividend of **$0.20 per share** (approx. $41 million) was declared on July 24, 2025, payable on August 26, 2025[143](index=143&type=chunk) [U.S. federal income tax considerations for U.S. shareholders of ordinary shares](index=36&type=section&id=U.S.%20federal%20income%20tax%20considerations%20for%20U.S.%20shareholders%20of%20ordinary%20shares) This section discusses the U.S. federal income tax implications of dividends for U.S. shareholders - The special dividend and other dividends paid in the current fiscal year are expected to be treated as a **nontaxable return of capital** for U.S. income tax purposes, to the extent of a shareholder's tax basis[146](index=146&type=chunk) - The calculation of E&P is a full-year determination, and actual E&P may differ from preliminary estimates, potentially changing the tax consequences for U.S. shareholders[147](index=147&type=chunk) - IRS Form 8937 has been posted to assist investors with U.S. tax reporting for the **June 12, 2025, and July 29, 2025, cash distributions**[146](index=146&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the disclosures regarding quantitative and qualitative aspects of market risk from the company's 2024 Form 20-F - No **material changes** to market risk disclosures since the 2024 Form 20-F[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) There have been no changes in internal control over financial reporting during the six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting - No **material changes** in internal control over financial reporting during the six months ended June 30, 2025[149](index=149&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional disclosures on legal proceedings, risk factors, and equity security transactions, supplementing the financial information presented in Part I [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is routinely involved in legal, regulatory, and administrative proceedings, including claims, injunctions, and ethics inquiries. There have been no material developments to the litigation disclosed in the Annual Report on Form 20-F - The company is party to various **legal, regulatory, or administrative proceedings** in the ordinary course of business[150](index=150&type=chunk) - No **material developments** to previously disclosed litigation have occurred[151](index=151&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's 2024 Form 20-F - No **material changes** to risk factors since the 2024 Form 20-F[152](index=152&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock repurchases were made during Q2 2025. However, on July 1, 2025, the Board authorized a new $500 million share repurchase program, replacing the prior program, and the company intends to enter into an accelerated share repurchase agreement for up to $250 million under this new program - No common stock repurchases were made during the **second quarter ended June 30, 2025**[153](index=153&type=chunk) - A new **$500 million share repurchase program** was authorized on July 1, 2025, replacing the prior program and having the full authorization remaining[154](index=154&type=chunk) - The company intends to enter into an **accelerated share repurchase agreement for up to $250 million** under the new program[155](index=155&type=chunk) [Signature](index=38&type=section&id=Signature) This section contains the official signature block for the financial report
IGT and Atlantic Lottery Sign Eight-Year Video Lottery Central System Technology Agreement
Prnewswire· 2025-06-25 20:31
Core Insights - International Game Technology PLC (IGT) has signed an eight-year agreement with Atlantic Lottery to supply its IntelligenEVO™ video lottery central system technology across Atlantic Canada, marking a significant partnership in the gaming industry [1][2] - This agreement positions Atlantic Lottery as the first World Lottery Association-affiliated operator to implement IGT's next-generation central management system in a game-to-system distributed market, enhancing its operational capabilities [1][2] Company Overview - IGT is a global leader in gaming, providing a wide range of gaming experiences across various channels and regulated segments, including lotteries, gaming machines, sports betting, and digital platforms [4] - The company emphasizes innovation, player insights, and operational expertise, aiming to deliver engaging gaming experiences that drive growth [4] - IGT has a strong local presence and relationships with governments and regulators in over 100 jurisdictions, employing approximately 11,000 individuals [4] Technology and Features - The IntelligenEVO technology is designed to enhance system performance and player experience, focusing on system security, network availability, and responsible gaming functionalities [2] - The solution is scalable and backed by decades of operator feedback, maximizing the benefits of real-time data, cloud-based technologies, and in-depth analytics [2] - IntelligenEVO's game-to-system and open API design optimizes data collection and delivery, allowing Atlantic Lottery to customize its offerings to meet evolving player needs [2]
IGT PlaySports Continues Partnership with Boyd Gaming in Nevada via New Three-Year Technology Agreement
Prnewswire· 2025-06-16 10:45
Core Insights - International Game Technology PLC (IGT) has signed a new three-year sports betting technology agreement with Boyd Gaming Corporation, extending their partnership through August 2028 [1][2] - The agreement allows IGT's PlaySports platform to continue powering Boyd Gaming's retail and mobile sports betting offerings in Nevada, building on a partnership that began in 2018 [1][2] Company Overview - IGT is a global leader in gaming, providing a wide range of gaming experiences across various channels, including lotteries, gaming machines, sports betting, and digital platforms [4] - The company emphasizes innovation, player insights, and operational expertise to deliver engaging gaming experiences and drive growth [4] - IGT has a significant presence in over 100 jurisdictions worldwide and employs approximately 11,000 people [4] Technology and Performance - IGT PlaySports technology is also utilized in Boyd Gaming-owned casinos across multiple states, including Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Ohio, and Pennsylvania [3] - IGT PlaySports was recognized as the "Sportsbook Platform Provider of the Year" at the 2024 EGR North America Awards, highlighting its industry leadership [3]
IGT Levels Up Player Experience at US Casinos with Launch of RISE55 Cabinet
Prnewswire· 2025-06-10 20:31
Core Insights - IGT has launched the RISE55 cabinet in the U.S. market, enhancing its hardware portfolio and providing a new platform for engaging players with innovative games [1] - The RISE55 cabinet features the Class III premium launch title, Magic Treasures Gold, which includes advanced features and multiple jackpot levels [1] - Additional core titles such as Treasure Blast™ and Wolf Run Wild Moon™ have also been released for the RISE55 cabinet [2] Company Overview - IGT is a global leader in gaming, offering a wide range of gaming experiences across various channels, including lotteries, gaming machines, sports betting, and digital platforms [3] - The company emphasizes innovation, player insights, and operational expertise to deliver engaging gaming experiences [3] - IGT operates in over 100 jurisdictions worldwide and maintains a workforce of approximately 11,000 employees [3]
International Game (IGT) Update / Briefing Transcript
2025-05-20 13:00
Summary of International Game Technology Italy Lotto Tender Update Conference Call Company and Industry - **Company**: International Game Technology (IGT) - **Industry**: Lottery and Gaming Key Points and Arguments Lotto License Update - IGT announced a new nine-year license for the Italian Lotto, extending operations through November 2034 [5][15] - The upfront license fee is $2.23 billion, significantly higher than the previous fee, reflecting the expected value creation [6][15] - IGT has managed the Lotto business for over 30 years, providing exceptional returns for both the Italian government and shareholders [5][6] Revenue and Growth Strategy - IGT plans to grow revenue and cash flows by investing in the existing iLottery business and developing a new B2C digital iCasino and sports betting platform [6][14] - The company aims to increase iLottery penetration in Italy, which currently lags behind other high lottery markets, with a 26% CAGR over the last five years [8][11] - IGT's digital strategy includes the My Lotteries app, which is currently the most downloaded gaming app in Italy, designed to enhance player experience and engagement [11][12] Financial Metrics and Projections - The new B2C digital distribution licenses will earn an 8% gross fee on all wagers, in addition to the current 6% concession rate [15][46] - IGT expects to generate cash flows similar to the previous nine years despite the higher upfront fee, justifying the investment [24] - Approximately $150 million in CapEx is required to upgrade Lotto infrastructure, with an additional $30 million for the new digital distribution model [16][15] Market Penetration and Player Engagement - IGT has identified significant cross-selling opportunities between lottery players and digital gaming, with a 25% overlap between digital lottery players and those engaged in iCasino and sports betting [12][45] - The company aims to enhance the retail experience through state-of-the-art technology and a robust point of sale network, which includes 35,000 outlets [10][40] Competitive Landscape and Future Outlook - The company recognizes the competitive nature of the lottery industry, with only a few players capable of managing large-scale operations [70] - IGT is committed to leveraging its technology and expertise to drive growth in both retail and digital segments, aiming to align iLottery penetration with European benchmarks [14][64] - The management expressed confidence in achieving compelling IRR consistent with planned returns on large contracts, supported by digital expansion and operational efficiencies [47][48] Additional Considerations - The company is not planning to enter the retail side of the B2C business but will focus on enhancing its digital offerings [78] - Future capital allocation plans will be discussed as the company approaches the closing of the Voyager transaction, with a commitment to returning capital to shareholders [51][53] Conclusion - IGT is optimistic about the future of the Lotto business in Italy, with a clear strategy to enhance digital offerings and drive growth through innovation and technology [99]
International Game Technology: The Jackpot's Smaller--But Still Worth The Gamble
Seeking Alpha· 2025-05-19 11:02
Core Insights - The article discusses the performance of International Game Technology (NYSE: IGT) over the past two months, indicating that the investment call has not met expectations [1]. Company Analysis - International Game Technology (IGT) has been under scrutiny for its stock performance, with the author expressing disappointment in the investment call results [1]. Industry Context - The analysis is part of a broader focus on restaurant stocks, with the author emphasizing the importance of advanced analytical models and specialized valuation techniques in making informed investment decisions [1].
IGT-Led Consortium Will Be Proposed to Be Awarded the Italy Lotto License Through November 2034
Prnewswire· 2025-05-19 10:30
Core Insights - International Game Technology PLC (IGT) has been proposed as the leading entity in a consortium for the Italy Lotto License, which is a significant lottery contract globally [1][2] - The consortium, LottoItalia, includes Allwyn, Arianna 2001, and Novomatic Italia, and the award notice from the Agenzia delle Dogane e dei Monopoli (ADM) is expected within 35 days [1][2] - IGT's CEO expressed confidence that the €2,230 million investment in upfront fees will enhance revenue and profit potential, with plans for innovation and growth in various gaming sectors [2] Financial Details - The consortium's bid includes a €2,230 million upfront license fee, payable in three installments, with the first two installments of €500 million and €300 million expected in 2025 [2] - The license term is nine years, securing operations until November 2034, with a concession rate of six percent on total wagers and an additional eight percent gross fee from digital channels [3] Strategic Plans - IGT aims to drive Lotto wager growth through an innovation pipeline and plans to significantly increase iLottery sales while expanding into B2C iCasino, sports betting, and other digital gaming businesses [2][3] - The operational control of the business remains with IGT, while Allwyn Entertainment will contribute a pro-rata share of license fees and capital expenditures [3]
IGT Wins "Best Casino Supply" Category at 2025 G2E Asia Awards
Prnewswire· 2025-05-14 10:45
Core Insights - International Game Technology PLC (IGT) won the "Best Casino Supply" category at the 2025 G2E Asia Awards, highlighting its commitment to delivering quality gaming experiences in the Asia-Pacific region [1][2] - The success of IGT's Rising Rockets Link game, which has become the highest-performing game in Asia, was a significant factor in this recognition [2] Company Performance - IGT's Rising Rockets Link is a multi-level progressive game that combines proven mechanics with strong mathematical foundations, contributing to its popularity among players [2] - The game is showcased on IGT's CrystalCurve™49 and PeakCurve™49 cabinets, enhancing its presentation and player engagement [2] Industry Recognition - The G2E Asia Awards, now in their 16th year, are evaluated by industry experts and recognize excellence and innovation in the gaming and entertainment sector across Asia [1]
International Game Technology PLC(IGT) - 2025 Q1 - Quarterly Report
2025-05-13 20:08
[Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides cautionary forward-looking statements on future plans and financial performance, including the proposed IGT Gaming & Digital sale, noting potential deviations from expectations - The report includes forward-looking statements concerning future plans, strategies, growth, and financial conditions, which are subject to significant risks and uncertainties[7](index=7&type=chunk) - A major subject of these forward-looking statements is the proposed sale of the IGT Gaming & Digital business to a buyer owned by Apollo Funds[7](index=7&type=chunk) - Factors that could cause actual results to differ include macroeconomic uncertainty, trade restrictions, currency fluctuations, and other risks detailed in the company's Form 20-F[7](index=7&type=chunk) [PART I: FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, management's discussion, market risk disclosures, and internal controls for the first quarter [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, income, and cash flows, with the IGT Gaming business classified as discontinued operations [Financial Statements Overview](index=5&type=section&id=Financial%20Statements%20Overview) The company's Q1 2025 financial overview shows total assets of $10.34 billion, a revenue decline to $583 million, and increased net cash from operations Key Financial Data (Q1 2025 vs Q1 2024) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | **Statement of Operations ($ in millions)** | | | | Total Revenue (Continuing Ops) | $583 | $661 | | Operating Income (Continuing Ops) | $138 | $219 | | Net Income Attributable to IGT PLC | $27 | $82 | | Diluted EPS Attributable to IGT PLC | $0.13 | $0.40 | | **Balance Sheet ($ in millions)** | **March 31, 2025** | **Dec 31, 2024** | | Total Assets | $10,340 | $10,278 | | Total Liabilities | $8,346 | $8,217 | | Total Shareholders' Equity | $1,994 | $2,061 | | **Cash Flow ($ in millions)** | **Q1 2025** | **Q1 2024** | | Net Cash from Operating Activities | $224 | $120 | [Note 3. Discontinued Operations and Assets Held for Sale](index=12&type=section&id=Note%203.%20Discontinued%20Operations%20and%20Assets%20Held%20for%20Sale) IGT agreed to sell its Gaming business for $4.05 billion, classifying it as discontinued operations with $4.81 billion in assets held for sale - IGT agreed to sell its IGT Gaming business for approximately **$4.05 billion** in cash to a buyer owned by Apollo Funds. The deal is expected to close by the end of Q3 2025[32](index=32&type=chunk) Assets and Liabilities Held for Sale (as of March 31, 2025) | Category | Amount ($ in millions) | | :--- | :--- | | Assets held for sale | 4,806 | | Liabilities held for sale | 1,003 | Income from Discontinued Operations | Period | Income from Discontinued Operations, Net of Tax ($ in millions) | | :--- | :--- | | Q1 2025 | 52 | | Q1 2024 | 13 | [Note 4. Revenue Recognition](index=14&type=section&id=Note%204.%20Revenue%20Recognition) Total revenue from continuing operations decreased to $583 million in Q1 2025, driven by declines in both service revenue and product sales Disaggregation of Revenue (Continuing Operations) | Revenue Source ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Service revenue | 557 | 619 | | Product sales | 26 | 42 | | **Total revenue** | **583** | **661** | - At March 31, 2025, the transaction price allocated to unsatisfied performance obligations for contracts longer than one year is approximately **$871 million**[44](index=44&type=chunk) [Note 9. Debt](index=17&type=section&id=Note%209.%20Debt) Total debt increased to $5.68 billion as of March 31, 2025, following a new €1 billion term loan facility agreement Total Debt Summary | Date | Total Debt ($ in millions) | Fair Value ($ in millions) | | :--- | :--- | :--- | | March 31, 2025 | 5,679 | 5,662 | | December 31, 2024 | 5,361 | 5,346 | - On March 14, 2025, the company entered into a new **€1 billion** senior facilities agreement (the "2030 Facilities"), consisting of two **€500 million** tranches. Facility A was utilized on March 24, 2025[57](index=57&type=chunk) [Note 12. Shareholders' Equity](index=20&type=section&id=Note%2012.%20Shareholders'%20Equity) The company declared and paid a quarterly cash dividend of $0.20 per share in Q1 2025, with another declared for June 2025 - In Q1 2025, the Board declared a quarterly cash dividend of **$0.20 per share**, paid on March 25, 2025[70](index=70&type=chunk) - On May 8, 2025, the Board declared another quarterly cash dividend of **$0.20 per share**, payable on June 12, 2025[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results for continuing lottery operations, detailing revenue decline, operating margins, and liquidity changes [Business Overview](index=23&type=section&id=Business%20Overview) The company is transitioning to a pure-play lottery business following the pending $4.05 billion sale of its IGT Gaming segment - Following the pending sale of IGT Gaming, the company operates as a pure-play lottery business, providing lottery management services and systems globally[83](index=83&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) - The sale of IGT Gaming to an entity owned by Apollo Funds for **$4.05 billion** cash is expected to close by the end of Q3 2025[85](index=85&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Total revenue from continuing operations decreased by 12% to $583 million in Q1 2025, primarily due to lower LMA incentive revenue and reduced jackpot activity Revenue from Continuing Operations (Q1 2025 vs Q1 2024) | ($ in millions) | 2025 | 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Service revenue | 557 | 619 | (62) | -10% | | Product sales | 26 | 42 | (17) | -39% | | **Total revenue** | **583** | **661** | **(78)** | **-12%** | - The revenue decline was driven by a **$32 million** reduction in LMA incentive revenue and a **46.1%** drop in same-store sales for U.S. multi-state jackpot games[94](index=94&type=chunk) Operating Margin (Continuing Operations) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Income ($ in millions) | $138 | $219 | | Operating Margin (%) | 24% | 33% | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity increased to $2.15 billion at March 31, 2025, with net cash from continuing operating activities rising to $168 million Total Liquidity | ($ in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revolving Credit Facilities | 1,519 | 1,364 | | Cash and cash equivalents | 631 | 584 | | **Total Liquidity** | **2,150** | **1,948** | - Net cash provided by operating activities from continuing operations increased to **$168 million** in Q1 2025 from **$65 million** in Q1 2024, primarily due to favorable timing of tax and interest payments[116](index=116&type=chunk) - Net cash used for investing activities from continuing operations increased to **$78 million** from **$37 million** YoY, mainly due to a **$42 million** increase in capital expenditures[117](index=117&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to its market risk disclosures since its 2024 Form 20-F filing - There have been no material changes to the disclosure under "Part I, Item 11. Quantitative and Qualitative Disclosures About Market Risk" included in the 2024 Form 20-F[123](index=123&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) The company reports no material changes in its internal control over financial reporting during the first quarter of 2025 - No changes in internal control over financial reporting occurred during Q1 2025 that have materially affected, or are likely to materially affect, the company's internal controls[124](index=124&type=chunk) [PART II: OTHER INFORMATION](index=31&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and details on unregistered sales of equity securities and use of proceeds [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company confirms involvement in various legal proceedings with no material developments since the 2024 Annual Report on Form 20-F - The company is party to various legal proceedings in the ordinary course of business[125](index=125&type=chunk) - There have been no material developments to the litigation disclosed in the Annual Report on Form 20-F filed on February 25, 2025[126](index=126&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to its risk factors since its 2024 Form 20-F filing - There have been no material changes to the risk factors disclosed in the 2024 Form 20-F[127](index=127&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock repurchases occurred in Q1 2025, with $156 million repurchased under the $300 million program since inception - No repurchases of common stock were made during the first quarter ended March 31, 2025[128](index=128&type=chunk) - The company has a **$300 million** share repurchase program authorized in November 2021. Since inception through March 31, 2025, **$156 million** (**6.9 million** shares) has been repurchased[129](index=129&type=chunk)