International Game Technology PLC (NYSE:IGT) Q2 2022 Earnings Conference Call August 2, 2022 8:00 AM ET

Company Participants

James Hurley - Senior Vice President of Investor Relations

Vince Sadusky - Chief Executive Officer

Max Chiara - Executive Vice President & Chief Financial Officer

Conference Call Participants

Carlo Santarelli - Deutsche Bank

Chad Beynon - Macquarie

Barry Jonas - Truth Securities

Ben Chaiken - Crédit Suisse

Jeffrey Stantial - Stifel

Operator

Good day and thank you for standing by. Welcome to the International Game Technology Q2 2022 Earnings Conference Call. [Operator Instructions]

I will now turn the conference over to James Hurley, Senior Vice President of Investor Relations. Please go ahead.

James Hurley

Thank you and thank you all for joining us on IGT's second quarter 2022 conference call which is hosted by Vince Sadusky our Chief Executive Officer; and Max Chiara our Chief Financial Officer. After some prepared remarks, Vince and Max will be available for your questions. Once again, we are presenting from multiple locations, so please bear with us if we encounter any technical difficulties.

During today's call, we will be making some forward-looking statements within the meaning of federal securities laws. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements based on a number of factors and uncertainties, including those related to the effects of the COVID-19 pandemic. The principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our latest earnings release and in our SEC filings. During this call, we will discuss certain non-GAAP financial measures. In our press release, the slides accompanying this webcast and our filings with the SEC each of which is posted on our Investor Relations website, you’ll find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures.

And now I’ll turn the call over to Vince Sadusky.

Vince Sadusky

Thank you, Jim and hello to everyone joining us today. Our second quarter and first half results confirm strong operating fundamentals across the portfolio. This includes accelerated multiyear same-store sales growth for lottery, continued sharp recovery in gaming and important strategic progress for digital & betting.

Q2 revenue was up 11%, net of FX and discrete lottery benefits in the prior year, led by 23% growth in Global Gaming. Operating income and EBITDA as the prior year at constant currency has a substantial improvement in gaming profits mitigated about $60 million in discrete lottery benefits that, as expected, did not recur this year. Operating margin of 22% was at the high end of our expectations for the quarter, while EBITDA margin of 40% remains among the highest in company history. In addition to significantly improved global gaming profitability, strong global lottery margins were an important contributor to our overall consolidated results. We continued our shareholder capital return policy. Year-to-date, this includes $81 million in dividends which annualized implies above a 4% yield at the current share price. In addition, $54 million was returned through share repurchases. It's a compelling return profile both in absolute and relative terms.