The focus of International Game Technology’s (IGT) Q2 earnings announcement was definitely about cost savings, as the pandemic has sucked up most of the new demand their products could satisfy. With revenues cut in half, they pretty much have to be.
IGT CEO Marco Sala admitted that results aren’t great, but they are better than expected. “Our second-quarter results reflect the intense impact of global lockdowns caused by the pandemic,” Sala said. “Thanks to strong North America Lottery performance and our swift adoption of cost-saving and avoidance measures, we delivered better cash flow than we expected back in May.”
Overall, revenues were down 48% for the quarter, down to $637 million from $1.24 billion the year prior. Gaming equipment and interactive gaming sales fell 65%, while revenues from slots and other gaming equipment was down 57%.
The North American lottery performance Sala hailed as a savior was down by only 12%, but international lottery took a bigger hit at 56%.
The overall net loss for the company was $282 million. That stings considering in 2019, the company brought in an income of $39 million for the same quarter.
“Our resilience is a direct consequence of the diversity of our global portfolio of products and solutions,” Sala said. “The improving trends we are currently seeing are encouraging, but we remain prudent with our planning. Our new organizational structure enhances our readiness to adapt to changes in market conditions.”
Cost savings will thus be the emphasis as the company works towards 2021. “We have the resources we need to navigate the impact COVID-19 is having on our business and we are making important, strategic decisions to enhance our operational flexibility,” said CFO Max Chiara. “This includes over $200 million in structural and discretionary cost savings compared to pre-pandemic levels.”
What should also help is the game supplier’s recent deal with FanDuel. Although terms haven’t been disclosed, the two companies announced an extension that will make IGT the operator’s sports gambling and iGaming platform provider for all its retail sportsbook properties for the next four years.