Citing macroeconomic uncertainty and a flat lottery market, International Game Technology (IGT) reduced its full-year earnings guidance to the low end of its projected range. The revision came as part of IGT’s first-quarter-earnings call on Tuesday.
The restated guidance forecasts $2.5 billion in revenue for 2025 and cash flow of $1.1 billion. The company posted earnings per share of nine cents, missing Wall Street expectations by 68 percent.
Revenue disclosed by IGT was $583 million, below the Wall Street consensus of $628 million. Cash flow for the first quarter was $250 million, “demonstrating the resilience of the lottery business and continued discipline,” according to CFO Max Chiara.
IGT’s call focused entirely on the lottery, not on its outgoing slot machine business. The latter’s spinoff to Apollo Management is still expected to close in the third quarter.
CEO Vince Sadusky reported a 1.5 percent uptick in lottery-ticket sales and a 26 percent jump in ilottery sales. Instant-draw-game sales were said to be stable, offset by a lack of new games and markets.
Overseas, IGT’s Italy division recorded two percent sales growth. The company is angling for a new contract for the Italian lottery, with bids scheduled to be opened on May 19. IGT also loaded its My Lottery site that Sandusky said provided “a scalable back end that makes it easier to add new content.”
Previewing the second quarter, Sadusky said that tickets of the new $5 MegaMillions denomination, which went on sale in April, “required extensive planning and impeccable execution.” A new printing press also went live in April, making it easier for IGT to supply large volumes of tickets.
Later this year, IGT is slated to roll out its Lottery Link point-of-sale devices in drug stores and other retail outlets. This is expected to enlarge IGT’s network of self-service kiosks.
The subject of tariffs was raised by Sadusky, who said they were “fueling fears of a recession. We’re not immune to those challenges,” but lotteries are historically resilient.
“The situation from a macro standpoint is very fluid,” related Sadusky, especially the discussion around tariffs. The lottery business is, he added, relatively stable now and he expected growth in the second half of the year.
“We had some really bad breaks with multiple hits,” Sadusky continued, particularly in Indiana and New Jersey, whose lotteries underperformed. “We had a lot of hits on the jackpots and not as many significant runs. We did expect more growth. The top line was really challenged compared to the prior year.”
Asked whether IGT is encountering price resistance to the exponential MegaMillions increase, Sadusky said little data is in hand. “We’re optimistic about the potential impact,” he continued, saying the effect of sales volume would create a net increase in revenue.
The transition to the higher price, he said, was smooth, adding game enhancements and shorter odds. “We believe folks will come to recognize these trends over time.”
Sadusky chuckled when queried about the fate of the Texas Lottery, lately ensnared in controversy. “There’s been an amazing amount of press and activity around the Lottery,” he said. Noting that the Texas Legislature adjourns on June 2, Sadusky added, “We’ll have more clarity at that point,” observing that the state’s procurement processes for the lottery were still in train.
He concluded, “Our first-quarter numbers confirm sustained demand. We are excited by the strategic initiatives we are working on to drive sustained growth.”
IGT ended the quarter with $5 billion in debut and a leverage ratio of 2.8 times cash flow. Chiara called those numbers “in line with our target.”
