Lottomatica Q1 2025 presentation: Revenue jumps 33%, announces €500m share buyback

Introduction & Market Context

Lottomatica Group SpA (LTMC) presented its first quarter 2025 results on May 7, revealing strong financial performance that outpaced the broader Italian gaming market. The company’s shares traded at €20.86 on the presentation day, up 0.38%, reflecting investor confidence in the gaming operator’s growth trajectory.

The Italian gaming market has demonstrated remarkable resilience against macroeconomic headwinds, with online gross gaming revenue (GGR) growing 18% in Q1 2025. Lottomatica has positioned itself to capitalize on this growth through its omnichannel approach and strategic investments in technology and customer engagement.

Quarterly Performance Highlights

Lottomatica reported impressive financial results for Q1 2025, with revenue reaching €586 million, a 33% increase compared to €440 million in Q1 2024. The company’s adjusted EBITDA saw an even stronger improvement, jumping 47% to €220 million from €150 million in the prior-year period.

As shown in the following chart of key financial highlights, Lottomatica’s online GGR growth of 30.8% significantly outperformed the overall market growth of 18% in Q1 2025:

The company benefited from favorable sports payout ratios in Q1, with the actual payout rate in online operations at 84.1% in March 2025 YTD, compared to a normalized rate of 85.5%. Similarly, in retail operations, the actual payout was 80.5%, below the normalized rate of 78.8%.

Breaking down performance by segment reveals strong growth across all business units:

Operating cash flow also showed significant improvement, increasing from €110 million in Q1 2024 to €184 million in Q1 2025, providing the company with additional financial flexibility to fund growth initiatives and return capital to shareholders.

Strategic Initiatives

Lottomatica outlined several strategic initiatives that are expected to drive both short-term and long-term value creation. The company increased its synergy target to €87 million by 2026, up from the previous target of €75 million, with 61% of these synergies already secured.

The following slide highlights Lottomatica’s short-term positives and medium-to-long-term structural advantages:

In April 2025, Lottomatica successfully refinanced €1.1 billion of debt, extending all maturities to 2030 or beyond. The refinancing included the issuance of Senior Secured Notes due 2031 with a yearly coupon of 4.875%, which will generate run-rate interest savings of approximately €24 million per annum. This financial restructuring, along with credit rating upgrades to BB by S&P and Ba2 by Moody’s, strengthens the company’s balance sheet and reduces interest expenses.

AI and Technology Implementation

A significant portion of Lottomatica’s presentation focused on the company’s implementation of artificial intelligence and data analytics to enhance customer experience and operational efficiency. The company’s proprietary technology stack (PEGASOS) and AI platform (LAMP) form the foundation of its competitive advantage.

In risk management, Lottomatica’s AI-driven approach has yielded tangible benefits. The following chart demonstrates how automated ticket management has improved efficiency and customer experience:

The company is also leveraging AI for predictive modeling of casino content offerings, enabling personalized game recommendations based on player preferences:

These technological initiatives have translated into measurable improvements in customer engagement and average revenue per user (ARPU). Personalized marketing campaigns have shown impressive results, as illustrated in the following slide:

The data indicates that personalization has driven approximately three times higher banner click-through rates, a 5 percentage point increase in weekly active players, and a 10% increase in ARPU.

Capital Allocation and Outlook

In a significant move for shareholders, Lottomatica announced a share buyback program of up to €500 million over the next 18 months, starting in June 2025. This decision, approved by the Board of Directors following authorization from the Annual General Meeting, underscores the company’s commitment to returning capital to shareholders while maintaining disciplined capital allocation.

The company highlighted the gaming sector’s resilience to macroeconomic challenges, noting that historically, the Italian gaming market has outperformed GDP growth during recessions and quickly recovered to pre-pandemic levels. This resilience, combined with Lottomatica’s unique business model centered around its core technology platform, positions the company well for continued growth despite potential economic headwinds.

Lottomatica’s management expressed confidence in the company’s growth trajectory, supported by its omnichannel and multi-brand approach, ongoing platform migration, and increasing synergy realization. The company’s focus on AI-driven personalization and customer engagement is expected to continue driving market share gains and financial performance improvement throughout 2025 and beyond.

Full presentation:

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