Light & Wonder
Light & Wonder, Inc. Reports Second Quarter 2024 Results
Light & Wonder, Inc. reported results for the second quarter ended June 30, 2024.
We maintained strong momentum in the second quarter, delivering an 8th consecutive quarter of double-digit consolidated revenue growth year-over-year, and continued execution on our diverse content roadmap and cross-platform strategy. Consolidated revenue grew 12%, driven by continued strong performance across all our businesses, resulting in robust earnings growth:
- Gaming revenue increased to $539 million, up 14% compared to the prior year period, primarily driven by global Gaming machine sales growth, which increased 32%, coupled with record Gaming operations unit expansion in the North American installed base and growth across Gaming systems, resulting in AEBITDA growth and margin expansion of 17% and 100 basis points, respectively.
- SciPlay revenue grew to $205 million, an 8% increase from the prior year period, driven by the social casino business, which continues to outpace the market and gain share on strong payer metrics, while growing our direct-to-consumer platform and expanding AEBITDA margin by 300 basis points.
- iGaming revenue grew to $74 million, a 6% increase from the prior year period, primarily reflecting continued momentum in North America, while the prior year benefited from $2 million in license termination fees.
First half 2024 consolidated revenue increased 13% to $1.6 billion as we continued advancement towards our long-term financial targets and returned $175 million to our shareholders through share repurchases.
Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “Light & Wonder continues to capitalize on opportunities underpinned by our scale and diversified product offerings as demonstrated through the growth momentum across the business. We saw strong progress in the Gaming business as the expansion of units in the North American installed base reached an inflection point. Our global presence enables further product refinement and market penetration with our suite of games and casino solutions. We continue to develop our catalog of proven, evergreen franchises to bring the most engaging experiences to our players, leveraging the power of our portfolio across land-based, social and iGaming platforms. The uplift that we have continued to see across the business is a testament to the quality of the talent and culture in our organization. I am pleased with the continued momentum that we are seeing and know that the best is yet to come.”
Oliver Chow, Chief Financial Officer of Light & Wonder, added, “Our 13th consecutive quarter of consolidated revenue growth once again reflects the strength of our combined business and solid financial profile. We continue to see improved earnings quality with consistent growth and healthy margins, all while investing back into the business to scale for the future. The new $1.0 billion share repurchase program is a testament to the value we see in the business and confidence in our ability to execute to plan over the long-term. We believe we will continue to create significant value for our shareholders through enhanced cash flow generation initiatives while delivering on our financial targets.”
LEVERAGE AND CAPITAL RETURN UPDATE
- Principal face value of debt outstanding(1) was $3.9 billion, translating to a net debt leverage ratio(2) of 3.0x as of June 30, 2024. Our net debt leverage ratio(2) decreased by 0.1x from December 31, 2023, and remained within our targeted net debt leverage ratio(2) range of 2.5x to 3.5x.
- Returned $175 million of capital to shareholders through the repurchase of approximately 1.8 million shares of L&W common stock during the first half of 2024 and completed the full $750 million share repurchase authorization. Under the initial share repurchase program, we purchased 11.2 million common shares, or 11.6% of shares outstanding at the inception of the program on March 1, 2022. The average purchase price of $66.72 per share represents a 34% discount to yesterday’s closing price of $100.71. In June 2024, the Board of Directors approved a new three-year share repurchase program(3) of up to $1.0 billion of the Company’s outstanding common stock through June 12, 2027.
- Repriced our Term Loan B again in July 2024, reducing our interest rate by 50 basis points resulting in a decrease in annualized interest costs of approximately $11 million, or $19 million in annualized interest costs reduction including our January repricing.
(1) Principal face value of debt outstanding represents outstanding principal value of debt balances that conform to the presentation found in Note 10 to the Condensed Consolidated Financial Statements in our March 31, 2024 Form 10-Q.
(2) Additional information on non-GAAP financial measures presented herein is available at the end of this release.
(3) The program may be conducted via open market repurchases, privately negotiated transactions, including block trades, accelerated share repurchases, issuer tender
offers or other derivative contracts or instruments, “10b5-1” plans, or other financial arrangements, and may be suspended or discontinued at any time.
Light & Wonder and ELK Studios’ games to be unleashed on Mexican market
Global entertainment brand SkillOnNet has expanded its existing partnerships with Light & Wonder and ELK Studios by launching their premium gaming content in the burgeoning Mexican market.
This expansion reinforces SkillOnNet’s commitment to delivering top-tier gaming experiences to players in regulated markets across the globe.
Players in Mexico will now have access to a rich portfolio of Light & Wonder and Elk Studios titles on SkillOnNet-powered Spanish-language casino brands, including its flagship, PlayUZU.
Light & Wonder is a global gaming powerhouse that developed some of the world’s most famous slot games, including ‘Dragon Train’, ‘Hot Hot Blazing Locks’, ‘Double Dragon’, ‘Squid Game’ and ‘Stargate Megaways’.
In 2021, the company acquired maverick Swedish game developer, ELK Studios. ELK is known for cutting-edge games that blend unique storytelling and humour with off-the-chart playability, such as ‘Nitropolis’, ‘Tinkerbot’ and ‘Pirot’, as well as for its signature X-iter and CollectR mechanics.
Jani Kontturi, Head of Games at SkillOnNet said: “We are delighted to bring Light & Wonder’s and Elk Studios’ superb portfolios to our Mexican customers. Both studios have a strong reputation for developing world-class content, and their games have already proven to be hugely popular in other markets. By strengthening these partnerships, we continue to offer our players in Mexico an unmatched gaming experience with top-tier titles.”
Jack Riley, Commercial Account Director at Light & Wonder said: “It’s great to build on our highly successful partnership with SkillOnNet, enhancing our shared commitment to delivering high-quality, immersive gaming experiences. Through this expansion, we’re ensuring that more players have access to the rich variety of games that have made Light & Wonder and ELK Gaming leaders in the industry.”
The post SkillOnNet Strengthens Mexican Market Offering with Light & Wonder, Elk Studios appeared first on Gaming and Gambling Industry in the Americas.
Garrett Blackwelder CEO and Founder of Grover Gaming
Grover Gaming announces $1.05 billion sale of charitable gaming assets to Light & Wonder, Inc.
Grover Gaming, Inc. and G2 Gaming, Inc. announced that it has entered into a definitive agreement for the sale of its charitable gaming assets (“Grover Charitable Gaming”) for a total consideration of up to $1.05 billion to Light & Wonder, Inc.
The total consideration of the sale consists of the following:
- $850 million cash, payable upon closing of the transaction and subject to customary purchase price adjustments
- Contingent cash consideration of up to $200 million, subject to the achievement of certain financial targets through 2028
Privately owned by Garrett Blackwelder, Grover Charitable Gaming was founded in 2013 and currently has an installed base of over 10,000 leased electronic pull-tab units across five U.S. States (ND, OH, VA, KY, NH) operating under a recurring revenue model.
Grover Charitable Gaming has developed long-standing and persistent relationships with charitable customers in the states that it operates, underpinned by a dedicated local team of service technicians and relationship managers.
Under the terms of the agreement, Mr. Blackwelder will collaborate with Light & Wonder to help drive the continued success of the business over the next four years.
The Company expects the transaction to close during the second quarter of 2025, subject to required regulatory and other approvals and customary closing conditions.
Post acquisition, Light & Wonder will operate the business with a combination of Grover Gaming and Light & Wonder employees.
“Grover Gaming is a leading player in charitable gaming, a category that has experienced significant growth in recent years,” said Matt Wilson, President and Chief Executive Officer of Light & Wonder. “This transaction complements our position as the leading cross-platform global games company by adding another compelling regulated adjacency to our profile.”
“Importantly, there are exciting incremental revenue opportunities to be realized by leveraging Light & Wonder’s proven land-based gaming content to a new and loyal customer base. We look forward to continuing to partner with Grover Gaming’s customers, building on its strong dedication to customer service,” Mr. Wilson concluded.
“I am very thankful for all of our Grover Gaming teammates and how hard they work every day,” said Garrett Blackwelder, CEO and Founder of Grover Gaming. “I’m also grateful for our customers’ loyalty over the past two decades. We realize without them, we wouldn’t be where we are today. Light & Wonder is an ideal partner for us, given our similar company cultures and dedication to innovation and customer service.”
“The real winners are the charities and fraternals in these markets, because of the exciting game content L&W brings to the table,” said Kevin Morse, Chief Development Officer of Grover Gaming. “We are excited to see Charitable Gaming taken to a new level.”
Goldman Sachs & Co. LLC is acting as exclusive financial advisor and Morgan, Lewis & Bockius LLP is serving as legal advisor to Grover Gaming in connection with the transaction.
The post Grover Gaming announces $1.05 billion sale of charitable gaming assets to Light & Wonder, Inc. appeared first on Gaming and Gambling Industry in the Americas.
Red Desert Games content developed by leading industry veterans set to further add to Light & Wonder’s innovative offering.
Red Desert Games launches its new and innovative slot content via the Light & Wonder content marketplace, through the Light & Wonder Spark studio partner program.
Red Desert Games is an emerging slot studio founded by land-based and iGaming industry veterans. The young studio team members have over 100 years combined experience in the global slot industry and are now applying their substantial knowledge, experience, and deep passion for slots to create innovative and engaging content to delight and excite.
As part of this new agreement, iGaming content developed by Red Desert Games will be distributed exclusively across Canada and the USA to Light & Wonder’s extensive operator network and elsewhere around in other key regulated markets via Light & Wonder’s Infinity aggregation platform.
The addition of Red Desert Games to the Light & Wonder Spark studio partner program’s roster of premium game studios further cements Light & Wonder as one of the world’s leading content marketplaces. It demonstrates once again Light & Wonder’s ongoing commitment to diversifying its content offering, as well as providing an opportunity for independent studios to significantly boost their international reach.
Edgar Pau, Co-Founder of Red Desert Games said: “We are extremely excited to be selected by Light & Wonder to join their partnership program. Light & Wonder has an unrivalled footprint and is the perfect fit to distribute our range of innovative and engaging games to its global network.”
“We have been extremely impressed by the whole Light & Wonder team and our interactions to-date. Their product feedback, enthusiasm to work with us and recognition of the uniqueness of our content has given us encouragement that they are the right partner to launch us into the global market.”
Steve Mayes, Senior Director of Partners at Light & Wonder, added: We are delighted to welcome Red Desert to the Light & Wonder Spark studio partner program. Our program is committed to collaborating with the most forward-thinking and innovative new studios, and Red Desert’s distinctive game concepts, inventive mechanics, and meticulously crafted, visually captivating titles truly embody these values. We are excited to support their global expansion and look forward to a promising and successful journey together.
The post Red Desert Games Signs Deal with Light & Wonder appeared first on Gaming and Gambling Industry in the Americas.
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