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Light & Wonder, Inc. Reports Third Quarter 2023 Results

Ten Consecutive Quarters of Consolidated Revenue Growth Delivering Increase of 13% Year-Over-Year

Double-Digit Growth Across all Businesses Driving Strong Cash Flow Generation

Maintained Healthy Balance Sheet, Strong Financial Profile and Extended 2025 Debt Maturity to 2031

Returned $112 Million of Capital to Shareholders Through Share Repurchases During the Quarter

Added to the S&P/ASX 200 Index and Closed Merger with SciPlay During the Fourth Quarter of 2023

LAS VEGAS–(BUSINESS WIRE)–Light & Wonder, Inc. (NASDAQ and ASX: LNW) (“Light & Wonder,” “L&W,” “we,” or the “Company”) today reported results for the third quarter ended September 30, 2023.


We maintained strong momentum in the third quarter and delivered a tenth consecutive quarter of consolidated revenue growth and fifth consecutive quarter of double-digit growth year-over-year. Consolidated revenue in the quarter grew 13%, maintaining strong margins and cash flow generation as we continued advancing toward our long-term financial targets. The growth was driven by double-digit growth across all of our businesses, including a fifth consecutive quarter of record revenues for SciPlay, and iGaming revenue held at record level:

During the quarter, we returned $112 million of capital to shareholders through share repurchases, and we successfully refinanced $550 million of senior unsecured notes, extending their maturity from 2025 to 2031. On October 23, 2023, we closed the SciPlay merger transaction and acquired the remaining 17% equity interest in SciPlay not already owned by L&W, completing another critical strategic milestone.

Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “Our tremendous team at Light & Wonder continues to deliver exceptional results with double-digit growth across all three of our businesses for the fourth consecutive quarter. Additionally, we also reached two significant milestones, which included closing the SciPlay transaction and inclusion into the ASX 200 index in Australia. We had successful showings at both the Australasian and Global Gaming Expos with the strength of our product portfolio on full display. The positive feedback we received on our wide range of cabinets and games further validates our focused investment in R&D and vision for the future of the Company. We will continue to capitalize on this momentum, as evidenced by the talent acquisition efforts we’ve recently accomplished. Coming out of G2E, our conviction has never been higher that we will reach our full potential as we approach the end of 2023.”

Oliver Chow, Interim Chief Financial Officer of Light & Wonder, added, “This quarter demonstrated our commitment to growing the business and maintaining healthy margins. Our business segments’ AEBITDA are at their highest levels in 2023 as we continue to stay intensely focused on executing on our strategy while driving margin enhancement initiatives. Our commitment to operational efficiencies coupled with strong top line growth enabled us to generate significant cash flow. We have a strong financial profile and capital structure, which positions us well in our current growth stage, providing us with flexibility to invest as we advance toward our strategic and financial goals.”

LEVERAGE, CAPITAL RETURN, AND STRATEGY UPDATE

SUMMARY RESULTS

Unless otherwise noted, amounts, percentages and discussion included below reflect the results of operations and financial condition of the Company’s continuing operations, which includes its Gaming, SciPlay and iGaming businesses. We have reflected our former Lottery business (disposed during the second quarter of 2022) and Sports Betting business (disposed during the third quarter of 2022) (collectively referred to as the “Divestitures”) as discontinued operations.

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in millions)

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

731

 

$

648

 

 

$

2,131

 

$

1,830

 

Net income (loss)

 

80

 

 

 

20

 

 

 

112

 

 

 

(197

)

Net income attributable to L&W(3)

 

75

 

 

 

328

 

 

 

96

 

 

 

3,645

 

Net cash provided by (used in) operating activities(3)

 

204

 

 

 

(351

)

 

 

423

 

 

 

(294

)

Capital expenditures

 

70

 

 

 

58

 

 

 

182

 

 

 

158

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures

 

 

 

 

 

 

 

Consolidated AEBITDA(2)

$

286

 

 

$

235

 

 

$

815

 

 

$

648

 

Adjusted NPATA(2)

 

99

 

 

Np

 

 

278

 

 

Np

Free cash flow(2)(3)(4)

 

123

 

 

 

(420

)

 

 

221

 

 

 

(526

)

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

Balance Sheet Measures

 

 

 

 

September 30, 2023

 

December 31, 2022

Cash and cash equivalents

 

 

 

 

$

891

 

 

$

914

 

Total debt

 

 

 

 

 

3,877

 

 

 

3,894

 

Available liquidity(5)

 

 

 

 

 

1,780

 

 

 

1,802

 

 

 

 

 

 

 

 

 

Np — Prior periods are not presented due to materially different debt and tax profile of the Company prior to the completion of the Divestitures.

 

 

 

 

 

 

 

 

(1) Principal face value of debt outstanding represents outstanding principal value of debt balances that conforms to the presentation found in Note 11 to the Condensed Consolidated Financial Statements in our September 30, 2023 Form 10-Q.

(2) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

(3) For the three and nine months ended September 30, 2022, these financial measures represent combined results inclusive of discontinued operations.

(4) For the three and nine months ended September 30, 2022, free cash flow was impacted by $465 million in cash taxes paid related to the Divestitures, $25 million paid by SciPlay for a legal matter settlement and $8 million in costs supporting strategic review and related transactions (including the Lottery business closing expenses). For the nine months ended September 30, 2023, free cash flow was impacted by $32 million in cash taxes paid related to the Divestitures and $10 million in costs supporting strategic review and related transactions (including the ASX listing and SciPlay Merger).

(5) Available liquidity is calculated as cash and cash equivalents plus remaining revolver capacity, including the SciPlay Revolver. As a result of the completion of the SciPlay Merger on October 23, 2023, we terminated the SciPlay Revolver, which resulted in a $150 million reduction of our available liquidity.

Third Quarter 2023 Financial Highlights

BUSINESS SEGMENT HIGHLIGHTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

 

($ in millions)

Revenue

 

AEBITDA

 

AEBITDA Margin(2)(3)

 

 

2023

 

 

 

2022

 

 

$

 

%

 

 

2023

 

 

 

2022

 

 

$

 

%

 

2023

 

2022

 

PP Change(3)

Gaming

$

465

 

$

419

 

$

46

 

11

%

 

$

235

 

$

202

 

$

33

 

16

%

 

51

%

 

48

%

 

3

SciPlay

 

196

 

 

 

171

 

 

 

25

 

 

15

%

 

 

61

 

 

 

43

 

 

 

18

 

 

42

%

 

31

%

 

25

%

 

6

 

iGaming

 

70

 

 

 

58

 

 

 

12

 

 

21

%

 

 

25

 

 

 

20

 

 

 

5

 

 

25

%

 

36

%

 

34

%

 

2

 

Corporate and other(4)

 

 

 

 

 

 

 

 

 

%

 

 

(35

)

 

 

(30

)

 

 

(5

)

 

(17

)%

 

n/a

 

 

n/a

 

 

n/a

 

Total

$

731

 

 

$

648

 

 

$

83

 

 

13

%

 

$

286

 

 

$

235

 

 

$

51

 

 

22

%

 

39

%

 

36

%

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PP percentage points.

n/a not applicable.

 

(1) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

(2) Segment AEBITDA Margin is calculated as segment AEBITDA as a percentage of segment revenue.

(3) As calculations are made using whole dollar numbers, actual results may vary compared to calculations presented in this table.

(4) Includes amounts not allocated to the business segments (including corporate costs) and other non-operating expenses (income).

Third Quarter 2023 Business Segments Key Highlights

(1) Average Revenue Per Daily Active User.

(2) Average Monthly Revenue Per Paying User.

Earnings Conference Call

As previously announced, Light & Wonder executive leadership will host a conference call on Thursday, November 9, 2023, at 4:30 p.m. EDT to review the Company’s third quarter results. To access the call live via a listen-only webcast and presentation, please visit explore.investors.lnw.com and click on the webcast link under the Events and Presentations section. To access the call by telephone, please dial: +1 (833) 470-1428 for U.S., +61 2 7908-3093 for Australia or +1 (646) 904-5544 for International and ask to join the Light & Wonder call using conference ID: 449920. A replay of the webcast will be archived in the Investors section on www.lnw.com.

About Light & Wonder

Light & Wonder, Inc. is a global leader in cross-platform games and entertainment. The Company brings together approximately 6,000 employees from six continents to connect content between land-based and digital channels with unmatched technology and distribution. Guided by a culture that values daring teamwork and creativity, the Company builds new worlds of play, developing game experiences loved by players around the globe. Its OPENGAMING® platform powers the largest digital-gaming network in the industry. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices. To learn more, visit www.lnw.com.

You can access our filings with the Securities Exchange Commission (“SEC”) through the SEC website at www.sec.gov, with the Australian Stock Exchange (“ASX”) through the ASX website at www.asx.com.au or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at explore.investors.lnw.com, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (“Reg FD”).

The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document, and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.

All ® notices signify marks registered in the United States. © 2023 Light & Wonder, Inc. and/or their respective affiliates. All Rights Reserved.

Forward-Looking Statements

In this press release, Light & Wonder makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. These statements are based upon Management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things:

Contacts

Media Relations
Andy Fouché, +1 206-697-3678
Vice President, Corporate Communications
media@lnw.com

Investor Relations
Nick Zangari, +1 702-301-4378
Senior Vice President, Investor Relations
ir@lnw.com

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