Light & Wonder, Inc. Reports First Quarter 2025 Results
16th Consecutive Quarter of Year-Over-Year Consolidated Revenue Growth with Expanded Margins Driving Strong Cash Flow Generation
Added 2,900+ North American Gaming Operations Units Year-Over-Year and 500 Units Sequentially
Returned $166 million of Capital to Shareholders through Share Repurchases during the Quarter
Strategic Acquisition of Grover Gaming's Charitable Gaming Business on Schedule
LAS VEGAS--(BUSINESS WIRE)--May 07, 2025--
Light & Wonder, Inc. (NASDAQ and ASX: LNW) ("Light & Wonder," "L&W," "we" or the "Company") today reported results for the first quarter ended March 31, 2025.
We delivered another solid quarter, achieving a 16(th) consecutive quarter of year-over-year consolidated revenue growth, expanding margins across all three of our businesses and generating strong cash flow, while continuing to execute on our robust content roadmap and cross-platform strategy, and remain committed to $1.4 billion 2025 Consolidated AEBITDA target(1) (pre-Grover transaction). We also repurchased approximately 1.9 million shares of common stock at an aggregate cost of $166 million during the three months ended March 31, 2025.
-- Gaming revenue increased to $495 million, up 4% compared to the prior
year period, primarily driven by growth across all lines of business,
including 9% growth in Table products and 5% growth in both Gaming
systems and Gaming operations. The growth was fueled by the success of
our diversified portfolio of game franchises and gaming solutions,
resulting in Gaming Operations North American premium installed base
growing for 19 consecutive quarters, 30% growth year-over-year in North
American unit shipments, and maintaining #1 ship share in Australia(2).
AEBITDA increased by 9% on revenue growth and margin expansion of 200
basis points.
-- SciPlay revenue was $202 million, a decrease of 2% compared to the prior
year period, but continued to outpace the social casino market with
strong payer metrics. AEBITDA increased 3%, while margin expanded 200
basis points, driven by our growing direct-to-consumer platform, while we
continued to invest in high return marketing initiatives to fuel future
growth. Our social casino business continued to deliver consistently high
player engagement and monetization, with ARPDAU(3) increasing by 5% to
$1.06.
-- iGaming revenue increased 4% to $77 million, and AEBITDA increased 8%
with margin expanding by 100 basis points, primarily reflecting continued
momentum in the U.S. and expansion of our partner network.
Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, "Our R&D investment, vast array of product offerings and comprehensive content strategy continue to deliver success in game deployment and franchise expansions. We continue to see our omni-channel strategy prosper with enhanced game development and performance fueling our existing businesses, and further opportunity to extend this strategy with the pending Grover Charitable Gaming Acquisition. We remain confident in the various avenues of growth that we see for 2025 with continued execution on our robust product roadmap driving performance across the business. We are committed to executing off the strong foundation of world class talent and game portfolio that we have built for long-term success."
Oliver Chow, Chief Financial Officer of Light & Wonder, added, "This quarter is a further testament to our commitment to value creation as we generated strong cash flow coupled with another meaningful quarter of share buyback. Our solid performance continues to be underpinned by a focus on streamlining and optimizing our business to enhance margins as reflected in the quarter across the three business units and corporate functions. The initiatives and processes that we have in place enable us to remain nimble and adaptable to a dynamic environment and positions us well to be a sustainable compounder of growth well into the future."
(1) Consolidated AEBITDA target range is a forward-looking non-GAAP financial measure presented on a supplemental basis and does not reflect Company guidance. Additional information on non-GAAP financial measure presented herein is available at the end of this release. (2) MaxGaming (April 2025) (3) Average Revenue Per Daily Active User
LEVERAGE, CAPITAL ALLOCATION AND BUSINESS 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 March 31, 2025, remaining
within our targeted net debt leverage ratio(2) range of 2.5x to 3.5x,
while we accelerated the pace of our share repurchases capitalizing on
the market dislocation and consistent with our capital allocation
strategy.
-- Returned $166 million of capital to shareholders through the repurchase
of approximately 1.9 million shares of L&W common stock during the
quarter.
-- Pending strategic acquisition of Grover Gaming's charitable gaming
business -- on February 18, 2025, we announced the pending acquisition
for an upfront consideration of $850 million, subject to customary
purchase price adjustments. Grover Gaming is a leading provider of
electronic pull-tabs distributed over five fast-growing U.S. states:
North Dakota, Ohio, Virginia, Kentucky and New Hampshire. The transaction
is expected to close during the second quarter of 2025, subject to
required regulatory and other approvals and customary closing conditions.
Our lead arranger has obtained commitments, subject to customary closing
conditions, for a new three-year $800 million Term Loan A credit facility
at leverage-based pricing expected to be in line with our current
revolving credit facility, the proceeds of which will be used for the
financing of this pending acquisition.
-- Impact of recent trade tariffs -- in April of 2025, the U.S. government
and many foreign countries imposed a series of new trade tariffs. These
tariffs place additional duties on imports, and we currently source a
portion of the raw materials and components for our Gaming Business from
China and across Asia. We have evaluated various mitigation strategies,
including but not limited to, supplier diversification, adjusting supply
chain operations, supplier pricing negotiations and cost control
initiatives, among other measures. Over the past several quarters,
through margin enhancement initiatives, we have successfully executed
meaningful operational efficiencies. While we expect recent tariffs and
trade policies to create incremental cost pressures in the near term, our
realized and ongoing operational efficiency initiatives coupled with
other measures are expected to mitigate these effects. We remain on track
to deliver our 2025 Consolidated AEBITDA target(3) of $1.4 billion
(pre-Grover transaction) and associated Adjusted NPATA targeted range(3).
-- Dragon Train litigation update -- Our external experts have now completed
a review of all hold and spin games released from 2015 to the present to
determine whether any of these games present issues with respect to
Aristocrat math values similar to those identified with Dragon Train and
Jewel of the Dragon, both of which were hold and spin games. Our experts
found no evidence that Aristocrat math values were used in any of these
games.
-- Hosting an investor day on May 20th in New York City, to provide an
update on our strategy and progress on key initiatives.
(1) Principal face value of debt outstanding represents outstanding principal
value of debt balances that conform to the presentation found in Note 10 to
the Condensed Consolidated Financial Statements in our March 31, 2025 Form
10-Q.
(2) Represents a non-GAAP financial measure. Additional information on
non-GAAP financial measures presented herein is available at the end of this
release.
(3) Consolidated AEBITDA target and Adjusted NPATA targeted range are
forward-looking non-GAAP financial measures presented on a supplemental basis
and do not reflect Company guidance. Additional information on non-GAAP
financial measures presented herein is available at the end of this release.
SUMMARY RESULTS
Three Months Ended March 31,
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($ in millions except per share
amounts) 2025 2024
--------------------- -------------------
Revenue $ 774 $ 756
Net income 82 82
Net income per share -- Diluted 0.94 0.88
Net cash provided by operating
activities 185 171
Capital expenditures 61 66
Non-GAAP Financial Measures(1)
--------------------------------
Consolidated AEBITDA $ 311 $ 281
Adjusted NPATA 117 105
Adjusted NPATA per share --
Diluted 1.35 1.12
Free cash flow 111 93
As of
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Balance Sheet Measures March 31, 2025 December 31, 2024
-------------------------------- --------------------- -------------------
Cash and cash equivalents $ 134 $ 196
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