Brightstar Lottery PLC

Good day, and thank you for standing by. Welcome to the International Game Technology Q3 21 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Jim Hurley. Please go ahead.

Thank you, and thank you all for joining us on IGT's third quarter 2021 conference call, which is being hosted by Mark Osala, our chief executive officer, and Max Chiara, our chief financial officer. After their prepared remarks, we're going to open the call up for your questions. 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 from our current expectations are detailed on our latest earnings release and in our SEC filings. Also during this call, we may discuss certain non-GAAP financial measures, In our press release, slides accompanying this webcast, and our findings with the SEC, each of which is posted on our investor relations website, you will 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 Marco Sala.

Thank you, Jim, and hello to everyone. By now, you have seen our announcement, and I think you will agree we had a great quarter. Broad-based momentum drove significant improvement in key financial and performance metrics in this quarter. Revenue grew more than 20% with double-digit gains in each business segment. Lottery Same Store says, rose 9% and were up 19% from the third quarter of 2019, demonstrating an improved underlining business growth profile. Global gaming revenues increased over 30% and the segment profits margin reached the highest level in seven quarters. This was helped by our Optima cost-saving program, which, I'm pleased to report, we completed during the quarter ahead of schedule. We are now breaking out our digital embedding business that will provide you with a more comprehensive view of those activities which deliver the strongest growth in the quarter. We recently announced some high-profile new hires, underscoring our increased focus on the segment and willingness to invest in this fast-emerging business. We delivered significant profits in the period. Operating income was more than double than prior year's level. Adjusted EBITDA of $407 million yields a margin of 41%, which is among the strongest we have achieved. Leverage improved to 3.8 times the lowest level in the IGT PLC history and below the four-time threshold we've been targeting for some time. On the ease of excellent year-to-date results and our solid financial condition, the board reinstated a quarterly cash dividend, signaling their confidence in the company's prospects. It is an important milestone. We are happy to be in the position of returning capital to shareholders. Delving a bit deeper into lottery, same-store sales were strongest in our main U.S. and Italy markets, both up double digits in the period. A lottery momentum remains strong, with same-store sales up over 50% compared to last year, and more than three times Q3 2019 levels. We recently won several new contracts, including a 10-year facilities management contract with the Connecticut Lottery, where IGT is displacing an incumbent. We are excited to become their trusted growth partner with our suite of world-class lottery solutions. We entered a seven-year agreement to upgrade FDJ's current lottery central system to IGT's advanced Aurora platform, featuring enhanced omni-channel capabilities. This builds on our over 20 years partnership with the operator of the French National Lottery, the fourth largest in the world. We also secured a new multi-year instant ticket service contract with West Lotto, Germany's largest lottery, extending our 13-year partnership. Our cloud-based e-instance platform, the first of its kind, went live in Georgia during the quarter. Building on that successful deployment, we intend to roll it out to our other iLottery customers over the next several months. Our investments in digital are being recognized. IGT's mobile lottery solutions want to Lottery Product of the Year at the 2021 International Gaming Awards. It is a nice endorsement of our increased focus in this arena. The year-over-year gains for our global gaming segment are impressive. We also continue to see sequential improvement in many KPIs. The Global Install Base War Up, led by North American New and Expansion Activity, and good progress with multi-level progressives. Yields are also stronger. On the product sales front, ASP were up nicely, helped by growing demand for our peak series of cabinets. The improving KPIs are consistent with the overall recovery we are seeing in the market. This, along with the optimal savings, has driven substantial improvement in gaming profit margins. The Q3 operating income margin was up over 1,000 basis points sequentially. Everyone was excited to be back at G2E this year. While attendance wasn't that of previous shows, this year's attendees were serious in their intent and customer sentiment was quite good. It was a productive show for us. Among the key IGTI lights was the most robust offer of multilevel progressives we have ever showcased. We had 18 in total at the show, a mix of both leased and for sale games. AY and Wolf Run Eclipse were among the most popular MLP titles at the show. There was a lot of excitement around our new hardware, We are expanding the high-performing PIC family with the super-sized PIC65 cabinet, launched in conjunction with the 25th anniversary of the Wheel of Fortune's loss. The new Diamond Air Ass Mechanical Reel cabinet was another standout, and we expect we'll extend our leadership in the stepper category. And there was a tremendous interest in cashless. Our resort wallet and IGT cashless and payment solutions received a lot of positive feedback from potential customers. IGT is unique and well-positioned in this area. We are the only company offering a fully integrated turnkey cashless solution. It marries convenience and ease of use. One wallet, one account, one step. The strength of our offer received important industry recognition, recently being named Product Innovation of the Year at the Global Gaming Awards in Las Vegas and Technology Provider of the Year at the International Gaming Awards. The creation of a standalone digital embedding segment will help you all appreciate the scale, growth profile, and attractive margin structure of the business. We are already a leader in the B2B ecosystem and that is reflected in the results with the revenue up over 50% year to date and reaching a 32% adjusted EBITDA margin. Margin should strengthen as the business gains scale, even as we increase investments to support growth. Success in iGaming comes down to content. Our ability to leverage proven land-based titles in the digital space provides a competitive advantage. We are seeing success with long-standing franchises such as Wheel of Fortune, along with newer titles like Fortune Coin. And we are increasingly focused on developing digital native content to differentiate and enhance our leadership position. We are also bolstering our offer with third-party contents and recently signed a multi-year content distribution agreement with Yggdrasil, a leading creator of digital games. Earlier this week, we announced Gil Rotem joining the company as president of iGaming. He has nearly two decades of industry experience with TripleLater.com and Bet365, will help drive the strong growth we expect over the next several years. We have an equally impressive new hire in sports betting, where we recently appointed Joe Escher, a long-standing industry veteran, as president of the business. His knowledge of the market will be a great asset as we focus on rolling out our turnkey retail and digital solutions across the U.S., Hardware is an important part of the turnkey retail offer, and interest in our crystal-flex sports betting terminal and pick-bar top is strong. Players can watch their favorite sports while easily placing sports wages, enjoying slots, playing video poker and kino, all on the same machine. It provides a very rich player experience. The Crystal Flex won top prize in the best consumer service technology category at the GGB Gaming and Technology Awards. With the strength of our year-to-date results, we are raising our profit outlook. Revenue, profit margins, cash flows, and leverage are all expected to be better than pre-pandemic levels. And with a compelling growth outlook across business segments, we are all well positioned to create significant value for all stakeholders. Our results would not be possible without the tremendous dedication of the IGT team and their resolute focus on our core values. We asked a lot of our people during the pandemic. Now it is the time for us to recognize them. We intend to provide a special bonus to employees not covered by existing incentive compensation plans who were impacted by forloughs and salary reductions last year. This will amount to about 5% of the annual base salary for over half our workforce. Sustainability, good corporate citizenship, and ESG matters have always been important to AGT. And our efforts were recently recognized with a reduced interest rate on our term loan facilities. And with today's news of restating a quarterly cash dividend, we are also giving back to shareholders. This is an important signal of management and the Board's confidence in our financial condition and business outlook. We look forward to expanding on our long-term outlook and providing additional insight into our capital allocation plans at the next week's Investor Day. Now, I'll turn the call over to Max.