Chad Beynon: Thanks for that. And then on the gaming margin or the Global Gaming margin goal, that you kind of laid out at the Investor Day, and you’ve talked about the last several quarters, it seems like that’s kind of according to plan. In our recent meetings you talked about half of that being supply chain and then half being just from scale. It looks like a lot of the supply chain and the scale kind of came-in in this quarter. Max, can you just give us an update in terms of where you are, kind of what the upcoming opportunities are for further margin improvement to stay on the path for the 2025 margin goal? Thank you.
Massimiliano Chiara: Yeah. Sure. So obviously, the 2025 number is not in the bag as of yet, but we have a couple of good carryover impact that will continue to progress along the way into next year as well. We anticipate the supply chain to continue to be to have a tailwind on our margins for 2024, as well as, this — the situation has fully normalized and we expect now to be able to bring home those efficiency measures that we have put in place during the post-COVID years. Another area where we expect some tailwind is the improved mix of products in North America, with the various launches of new cabinets, the Peak49, and new games. We expect that the strength of our product offensive to really be a tailwind on our margin progression going forward.
And then obviously we continue to enjoy the benefit from the increased scale. Those are the items that we control. Items that we have less of a control are more related to the geopolitical situations and the macroeconomic issues around the globe. And obviously we have to watch them carefully, but definitely those markets, the international markets, in general, are still running behind the pre-COVID period. And so as the market, the individual markets stabilize, we expect to be able to have improved progression in those individual markets as well. That would round up our performance on a margin journey trajectory.
Chad Beynon: Thank you very much. Appreciate it.
Operator: Your next question comes from the line of Jeff Stantial of Stifel. Your line is open.
Jeff Stantial: Hey, great. Thanks. Good morning. Vince, Max, thanks for taking our questions. Starting off here. I want to follow-up on one of Barry’s questions earlier on the upcoming lotto renewal. Obviously, you’re coming at it this time around from a position of financial strength, just given where the balance sheet is. But I guess my question is, are there other reasons I guess besides financial that you might look to incorporate a minority partner again this time around?
Vincent Sadusky: Yeah. I would say the partnership, the consortium that we put together last time has gone fine. I think it’s benefited — served the intended purpose and benefited all parties to have a very strong offering. We obviously can’t comment on the development of that for this next lotto tender. But as we’ve pointed out before, the companies — certainly, its capital structure is the best ever. It’s got the lowest leverage level ever. So the company has a lot of flexibility to be able to think about and determine the best pathway forward. And as I say, it’s hard to really comment beyond that at this point.
Jeff Stantial: Okay. Great. That’s helpful. Thanks Vince. And then turning to the gaming business, replacement sales in North America were well ahead of kind of where we were thinking about things, up more than a thousand units quarter on quarter. I was just hoping you could sort of bucket out some of the sequential growth drivers here. What I mean by that specifically is, is how much of this sequential growth was driven by VLPs versus poker versus steppers video, et cetera. Just any color there to help kind of frame this out, would be appreciated. Thanks.
Vincent Sadusky: Yeah. I guess, it’s interesting from quarter to quarter there is — the demand for our machines changes. And it’s really, I think, a positive for IGT that we are now in a position where we are very competitive and market leading, in fact, in several game categories. So I think one of the really cool things the team did at G2E, for example, was we were the only ones to set up a high limit room, right? And so all casinos aspire to have a high limit room as it’s normally the highest yielding per capita by far and a big profit center. In fact, a lot of regional casinos don’t have a high limit room because it just doesn’t do all that well. But it’s usually the premium casinos that have it. Anyway. We normally over-index in the high limit room, and we were able to utilize that high limit room concept at G2E to visually show that you could outfit the entire room from mechanical stepper to video poker, to core games, to MLP games, to WAP games, with all of the latest new high performing titles by IGT.
I think it was very effective visualization. So for example, in this quarter, Max had mentioned one of the reasons that our ASP was a little bit lower than we expected, was because we actually sold a lot of our new video poker cabinets into the marketplace. Our — we mentioned our DiamondRS cabinet, for example. That cabinet we introduced several quarters ago, it took a little while to get some momentum for that cabinet, but once operators got a chance to see it, to understand it, to build in replacements for mechanical steppers, which don’t happen all that often, they’re long live machines that players really enjoy and oftentimes don’t want to see replaced. We ended up having very significant ship share. I think I’d mentioned — we estimate somewhere around 40% of the replacement market for stepper cabinets were our DiamondRS, along with really good consistent deliveries of our MLP games and WAP games, et cetera.
So it’s — rather than kind of comment specifically on the quarter, that experience for the third quarter was different from the second quarter, where a lot of MLP games really kind of drove a lot of our production capacity and deliveries along with core games as well. So it definitely fluctuates from quarter to quarter. I think the takeaway is we’re competitive in all these game categories and when you add up all the numbers, we had terrific yield. We had terrific ship share, and we had our fifth quarter in a row of increasing installed base that was really significant and really nice. So that’s the way we look at it. When we look at our overall KPIs, we’re really pleased with the direction. Fourth quarter funnel looks good. We don’t have a lot of visibility going way into the future, as you all know.
That’s the nature of the business. But fourth quarter looks — looks like demand is remained strong for us.
Jeff Stantial: Great. That’s really helpful color. Thanks again and congrats on strong quarter.
