Brightstar Lottery PLC

Thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the International Game Technology first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you. I will now turn the conference over to James Hurley, Senior Vice President of Investor Relations. James, you may begin your conference.

Thank you, Krista. And thank you all for joining us for IGT's first quarter 2024 conference call, which is hosted by Ben Sadusky, our CEO, and Max Chiara, our Chief Financial Officer. After some prepared remarks, Bids and MACs will be available for your questions. During today's call, we will be making some forward-looking statements within the meaning of the 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. 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. You'll find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures in our press release, slides accompanying this webcast, and our filings with the SEC, each of which is posted on our investor relations website. And now I'll turn the call over to Vince.

Thank you, Jim, and welcome everyone to the call. This year, 2024 is off to a strong start with Q1 results that exceeded our outlook. Revenue of nearly 1.1 billion was better than expected, primarily on global gaming and iGaming performance. The 24% operating margin was 400 basis points higher than anticipated, mostly on better lottery results from Italy same-store sales and strong North American jackpot activity in late March, in addition to the timing of separation and divestiture costs. The company delivered record operating income and divestiture costs. Based upon Q1 performance exceeding expectations, we've upgraded our full-year 2024 revenue and profit goals, which Max will walk you through later. Focusing on the operating segments, global lottery revenue rose 6%, driven by Italy game innovation and strong product sales growth. Global lottery has now achieved six consecutive Global same-store sales were better than expected, largely on strong Italy, instant ticket performance, and significant U.S. multi-state jackpot activity towards the end of the quarter, thanks to billion-dollar-plus jackpots for both Powerball and Mega Billions. Italy's more than 4% same-store sales growth reflects similar trends for both instance and draw games, and was achieved on top of 10% growth in Q1 of 2013. This performance is a true testament to IGT's unique market knowledge and player insights that create compelling game innovation and go-to-market strategies. Same-store sales in North America and the rest of the world were slightly below prior year, mostly due to differences in the year-to-year cadence of new instant ticket game launches, especially for higher-priced games. Global lottery sales continued to expand at a fast split, up over 20% of the period, led by a growing portfolio of high-performing e-instinct games like Ghostbusters in the U.S. and Ultra Numerissimi in Italy. IGT's best-in-class lottery hardware and software solutions drove another quarter of strong product sales growth. We have some meaningful updates on the upcoming Italy Lotto license tender. A recent government decree confirmed the nine-year term and minimum €1 billion upfront license fee, which will be payable in three tranches. In addition, the effective rate will remain 6%, which is consistent with the current license. In preparation for the upcoming tender, IGT and our current partners have entered into memorandums of understanding to maintain the existing joint venture structure for the new bid. As the only operator of this license for three decades, we are confident in our ability to compete for the next license term. I'd like to spend some time on the key product strategies driving Global Lottery's consistent growth. Broadly, they are new game launches, increased play frequency, and a multi-channel focus. In Italy, the team has done a fantastic job delivering compelling game innovation, including revitalizing core franchises across raw and instant games. They are successfully amplifying the impact of this innovation with coordinated launches across both retail and digital channels. In fact, our multi-dimensional, omni-channel games won Lottery Product of the Year at February's International Gaming Awards. In an instance, updated graphics and new price points and payout structures have maintained the success of iconic games like Numerissimi. We launched the 20-euro Ultra Numerissimi extended play game in Q1, which helped drive incremental sales in a period. We are executing a similar strategy with the Dopias Fetus franchise, renewing it with updated graphics and an enriched game experience that will be supported by several new retail and e-instinct games, as well as expanded price points over the next few months. Increased play frequency is helping drive growth in Italy draw games. This includes a second million-day draw introduced in the second quarter of last year, a fourth weekly lotto draw launched in Q3, and new 10-E lotto special draws occurring between 4 p.m. and 6 p.m. each day that began in Q4 of last year. Outside of Italy, the mid-March launch of 500 Times the Money, Georgia's second $50 instant ticket game, is currently driving improved sales in that category. New Jersey's $50 million explosion launched in the end of Q1 with a $20 price point, and that's having a similarly positive impact. Cash Pop, a proprietary IGT draw-based game, recently expanded to a 13th jurisdiction. The highly customized gameplay and multiple daily draw times creates an engaging player experience, which explains Cash Pop's popularity and success in helping to drive lottery sales growth. Georgia's multi-channel quick win game, launched in September, currently has eight iterations in the market. The retail and iLottery games share a progressive jackpot, and sales are well-balanced across channels. Based on the strong results, there are another six quick win games planned for 2024. Broadway's demand for games and cabinets is driving sustained profit momentum for our gaming additional segment, where year-to-year profit margins expanded for the 12th consecutive quarter. The global install base grew to over 54,000 units in the quarter. This includes the seventh consecutive quarter of growth for U.S. and Canada premium units. In fact, the U.S. and Canada install base of multi-level progressive games was up 6% from year-end levels on the continued success of Prosperity Link and Mystery of the Lamb, which was named the top-performing new premium game at this year's EKG Slots Awards Show. Gaming machine unit sales have been on a strong multi-year growth trajectory, thanks to a consistent pipeline of exciting new games. Rising Rockets is one of the latest in that roster, securing the number three and number five spots in top indexing new core video games. Our new cabinets, in particular the Pinker 49, remain among the top performing North American cabinets, and this helped drive record U.S. and Canada average selling prices in Q1. High gaming revenue grew 10% in the quarter, with GTR reaching an all-time high in March, driven by strong IGT game performance in the U.S. That momentum was supported by the top-performing cash eruption, in addition to our popular video poker and table game offerings. We continue to see success with our bespoke game program and recently launched Wheel of Fortune Triple Extreme Spin with BetMGM and Fort Knox Cash with FanDuel. IGT has had consistent success bringing gaming and digital games to market through focused R&D investment, including process improvements and more discipline in game and hardware development. Backed by a stressing portfolio of terrific IP, IGT is currently enjoying the most success we've had in game development in over a decade. In the premium space, we've consistently delivered high-performing link progressives. Tiger and Dragon, which was just released in April, is one of our top Four of our non-WAP premium games are in the latest Islanders' top 25 new premium games, and we expect Tiger and Dragon to make its way to that list soon. In the WAP arena, IGT has 11 of the top 25 indexing games, including the number one and number three spots, with Megabucks Double Diamond Deluxe and Wheel of Fortune Double Diamond. We've got exciting new titles on the horizon with Whitney Houston and Prosperity Lake Blessings. We've made significant inroads in the core video category, which represents the largest portion of industry sales, and it's a space where IGT is underrepresented. I already mentioned the recent success of Rising Rockets, but it's worth noting the longevity of titles like Magic Treasures and the growing library of new games, such as Golden Eagle and Golden Phoenix. The success of our games in North America is translating to the rest of the world. Magic Treasures and Mystery of the Lamp are among the top 10 indexing premium games in the EMEA region, while Magic Treasures and Egyptian Link are among the top 10 core games in Latin America. The encouraging land-based results are also evident in our iGaming business. IGT has three of the top five performing US online games. We've had particular success with a multi-channel focus, leveraging strong land-based franchises in the digital arena. Later this year, we'll be rolling out new digital games under the successful cash eruption Cleopatra, and Fortune coin franchises. So 2024 is off to a strong start with record operating income, net of separation divestiture costs. Our upgraded full year 24 revenue and profit outlook reflects broad-based momentum across key performance indicators in the balance of the year. We continue to make progress in separating global gaming from gaming and digital and preparing for the proposed transaction with Everest. Now I'll turn the call over to Max.