Delivered Growth, Margin Expansion(1) , and Quality of Earnings with Net Income of $52 Million and Consolidated AEBITDA(2) of $327 Million
Gaming Operations North American Premium Units Base Grew for 23(rd) Consecutive Quarter, Adding over 2,550 Premium Units(3) Year-over-Year, and 660 Grover Units Added Sequentially
Generated Cash Flows from Operating Activities of $139 Million and Adjusted Free Cash Flow(2) of $207 Million
LAS VEGAS--(BUSINESS WIRE)--May 06, 2026--
Light & Wonder, Inc. $(LNW.AU)$ ("Light & Wonder," "L&W," "we" or the "Company") today reported results for the first quarter ended March 31, 2026.
Light & Wonder delivered a solid start to 2026 underpinned by its highly diversified business model, continued disciplined execution across all three businesses and strong cash flow generation, while demonstrating resilience against a backdrop of macroeconomic and geopolitical uncertainty, including tariff-related pressures. Consolidated revenue grew 2% year-over-year to $790 million, against a strong prior year period. We continue to execute against our commitment to deliver enhanced quality of earnings through recurring revenue(4) , with Gaming operations and iGaming as the primary growth drivers during the quarter, each delivering double-digit year-over-year revenue increases. This was further underpinned by continued operational momentum and content strength. Net income was $52 million or $0.66 per share(5) , down 37% and 30% year-over-year, respectively, reflecting approximately $50 million in legal reserve contingencies associated with certain legacy legal matters, which impacted year-over-year net income and net income per share(5) growth by approximately 61% and 67%, respectively. Net cash provided by operating activities was $139 million, a 25% decrease compared to the same period in 2025, primarily reflecting the payment of legal matter settlements in the quarter.
The first quarter demonstrated broad-based strength, with all three businesses delivering another quarter of segment AEBITDA growth and AEBITDA margin ("margins" or "margin") expansion. Consolidated AEBITDA(2) grew 5% to $327 million, and Adjusted NPATA(2) was $115 million, resulting in 7% growth on a per share basis(2)(5) to $1.45 as compared to the prior year period. Adjusted Free cash flow(2) was $207 million, an 86% increase year-over-year, reflecting strong underlying cash generation across the business.
Gaming revenue increased 3% year-over-year to $512 million, driven by Gaming operations revenue, which increased 38% to $239 million and Table Products, which increased 24% to $63 million. Gaming machine sales revenue decreased 25%, primarily reflecting the timing of international and North America Video Lottery Terminal ("VLT") shipments in the prior year period, while average selling price per unit remained resilient at around $19,700.
North American Gaming operations premium installed base grew for the 23(rd) consecutive quarter adding 650 units sequentially (over 2,550 on a year-over-year basis), and Grover charitable gaming ("Grover") expanded its footprint by 660 units on a sequential basis, boosted by entry into the recently legalized Indiana market. In North America, we also shipped over 5,000 North American units this quarter.
(1) Represents business segment AEBITDA margin. Business segment AEBITDA is our primary segment measure of profit or loss under GAAP. (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) Excludes Grover charitable gaming units. (4) Recurring revenue includes Gaming operations (inclusive of Grover), ongoing Gaming systems maintenance, table service/rental agreements, SciPlay and iGaming revenues. (5) Per share amounts are calculated based on weighted average number of diluted shares.
iGaming once again delivered quarterly double-digit growth in revenue of 18% and AEBITDA of 22% on continuing U.S. momentum underpinned by first-party content proliferation and partner network growth. While SciPlay revenues remain challenged amid a mature social casino market, the business continued to grow both its direct-to-consumer ("DTC") revenue and active users on a sequential basis.
Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, "The first quarter of 2026 marks the beginning of the next phase of the Company's growth trajectory: one defined by our content-centric operating model, deepening customer relationships, disciplined execution, expanding margins and enhanced capital structure. We are seeing the benefits of our continued investment in studios and content, as our franchises drive strong game performance across the portfolio. Gaming momentum remained robust, with our North American premium installed base growing for the 23(rd) consecutive quarter, and Grover continued its expansion into the recently legalized Indiana market. iGaming delivered another double-digit growth quarter in both revenue and AEBITDA, while SciPlay continued to expand its DTC revenue. Looking ahead, we remain focused on investing in product innovation and talent to further strengthen our recurring revenue model(1) and enhance our global competitive position as we progress toward our 2028 financial targets(2) ."
Oliver Chow, Chief Financial Officer of Light & Wonder, said, "Our first quarter results reflect continued margin expansion across the businesses and scaling cash flow, driving the improving cash conversion profile of our business, while we make deliberate investments in AI and infrastructure that we believe will compound meaningfully over time to support both growth and efficiency. Our capital allocation priorities remain disciplined and unchanged: investing in high-return growth opportunities, managing our net debt leverage ratio(3) toward the lower end of our targeted range(2) and returning capital to shareholders meaningfully, having now repurchased 25% of total shares outstanding since the program's inception(4) . We maintained our net debt leverage ratio(3) within our targeted range(2) and expect to deleverage throughout 2026, supported by strong underlying business performance. Importantly, we remain committed to reducing our net debt leverage ratio(2) to below 3.0x during the first half of 2027, with the intention to accelerate share repurchases in the second quarter, creating sustainable long-term shareholder value."
LEVERAGE, CAPITAL ALLOCATION AND BUSINESS UPDATE
-- Principal face value of debt outstanding(5) was $5.2 billion,
translating to a net debt leverage ratio(3) of 3.5x as of March 31, 2026
or combined net debt leverage ratio(3) of 3.4x, remaining within our
targeted net debt leverage ratio(2) range of 2.5x to 3.5x. Period end net
debt leverage includes $137 million in litigation settlement payments.
-- Repriced our Term Loan B in January 2026, reducing the applicable
margin and resulting in a decrease in annualized interest costs of
approximately $5 million.
-- Returned $22 million of capital to shareholders through the repurchase
of approximately 0.2 million CHESS Depositary Interests ("CDIs") during
the quarter. Since initiation of the prior share repurchase program in
March of 2022, the Company has returned $1.9 billion to shareholders
through the repurchase of 24.6 million shares or CDIs. This represents
25% of total outstanding shares prior to the commencement of the
programs(4). With approximately 79% of the authorized share repurchase
program now utilized, we have remaining capacity of $314 million. We
retain a flexible capital structure, which enables us to deploy balance
sheet capacity when appropriate. Subject to the continuation of share
repurchases(4), we are committed to deleveraging our balance sheet
towards the mid-point of our targeted net debt leverage ratio range(2)
over the course of FY 2026 and below 3.0x during the first half of 2027.
(1) Recurring revenue includes Gaming operations (inclusive of Grover),
ongoing Gaming systems maintenance, table service/rental agreements, SciPlay
and iGaming revenues.
(2) Represent forward-looking non-GAAP financial measures presented on a
supplemental basis. Additional information on non-GAAP financial measures
presented herein is available at the end of this release.
(3) Represents a non-GAAP financial measure. Additional information on
non-GAAP financial measures presented herein is available at the end of this
release.
(4) Share repurchase activity is subject to necessary board approvals, capital
allocation priorities and prevailing market conditions. Since inception refers
to the initiation of the prior share repurchase program in March of 2022.
(5) 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 Form 10-Q for the
quarter ended March 31, 2026.
LEVERAGE, CAPITAL ALLOCATION AND BUSINESS UPDATE (Continued)
-- FY 2026 Financial outlook update: We expect a similar shape of earnings
momentum to FY 2025, weighted towards the second half of the year and
reflective of our growing recurring revenue base(1), the timing of
investments and the timing of capital expenditures of our customer base.
Full-year Consolidated AEBITDA(2) growth is expected to be in the mid- to
high-single digits(3), as we continue to execute against our long-term
strategy and 2028 financial targets(3). This outlook incorporates the
impact of ongoing macroeconomic and geopolitical uncertainty, including
tariff-related cost pressures and the pending increase in U.K. iGaming
gambling duties.
SUMMARY RESULTS
Three Months Ended March 31,
------------------------------------------
($ in millions except per share
amounts) 2026 2025
--------------------- -------------------
Revenue $ 790 $ 774
Net income 52 82
Net income per share -- Diluted 0.66 0.94
Net cash provided by operating
activities 139 185
Capital expenditures 74 61
Non-GAAP Financial Measures(2)
Consolidated AEBITDA $ 327 $ 311
Adjusted NPATA 115 117
Adjusted NPATA per share --
Diluted (or EPSa) 1.45 1.35
Adjusted Free cash flow 207 111
As of
------------------------------------------
Balance Sheet Measures March 31, 2026 December 31, 2025
--------------------- -------------------
Cash and cash equivalents $ 147 $ 167
Total debt 5,140 5,163
Available liquidity(4) 927 927
(1) Recurring revenue includes Gaming operations (inclusive of Grover),
ongoing Gaming systems maintenance, table service/rental agreements, SciPlay
and iGaming revenues.
(2) Represent non-GAAP financial measures. Additional information on
non-GAAP financial measures presented herein is available at the end of this
release.
(3) Represent forward-looking non-GAAP financial measures presented on a
supplemental basis. Additional information on non-GAAP financial measures
presented herein is available at the end of this release.
(4) Available liquidity is calculated as cash and cash equivalents plus
remaining revolver capacity.
First Quarter 2026 Financial Highlights
-- First quarter consolidated revenue increased to $790 million as
compared to $774 million, a 2% increase versus the prior year period.
Gaming revenue grew 3%, benefiting from increases in Gaming operations
and a $43 million contribution from Grover, while Table Products revenue
grew 24% to $63 million. Gaming machine sales decreased 25% to $156
million, as the prior year period benefited from the timing of
international and North America VLT shipments, while Gaming Systems
revenue declined by 14% to $54 million, primarily due to lower hardware
sales. iGaming once again delivered double digit quarterly revenue
growth, increasing 18% compared to the prior year period. SciPlay
revenues decreased 7%, reflecting continued JACKPOT PARTY$(R)$ Casino
softness, despite resilient player monetization. DTC revenues expanded to
27% of total SciPlay revenue.
-- Net income was $52 million as compared to $82 million, a 37% decrease
from the prior year period, primarily reflecting approximately $50
million in legal reserve contingencies associated with certain legacy
legal matters. Underlying operational performance remained strong, with
consolidated revenue growth and AEBITDA margin expansion across all three
businesses. These gains were more than offset by the legal reserve
contingencies noted above and higher interest expense, reflecting
incremental borrowings associated with the Grover acquisition. Net income
per share(1) was $0.66, compared to $0.94 in the prior year period, a 30%
decrease year-over-year. The legal reserve contingencies charge of $50
million impacted net income and net income per share(1) year-over-year
growth by approximately 61% and 67%, respectively.
-- Consolidated AEBITDA(2) was $327 million, compared to $311 million in
the prior year period, a 5% increase driven by growth across all
businesses, inclusive of strong segment AEBITDA margin expansion and
contributions from Grover.
-- Adjusted NPATA(2) was $115 million, as compared to $117 million in the
prior year period, benefiting from revenue growth and expanded margins
across all businesses, offset by higher interest expense, depreciation
and amortization. Adjusted NPATA per share (EPSa)(1)(2) increased 7% to
$1.45, compared to $1.35 in the prior year period.
-- Net cash provided by operating activities was $139 million, compared to
$185 million in the prior year period, primarily impacted by litigation
settlement payments of $137 million(3).
-- Adjusted Free cash flow(2) was $207 million, compared to $111 million
in the prior year period, an 86% increase reflecting strong underlying
earnings generation, the timing of receivable collections and lower
income tax payments. Acknowledging some timing of working capital
benefits, the strength of Adjusted Free cash flow(2) underscores the
Company's scaling cash conversion profile over time.
BUSINESS SEGMENT HIGHLIGHTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
($ in millions) Revenue AEBITDA AEBITDA Margin(4)(5)
------------------------- --------------------------- ----------------------------
PP
2026 2025 $ % 2026 2025 $ % 2026 2025 Change(5)
---- ---- ----- ------ ----- ----- ---- ------- ------- ------- ----------
Gaming $512 $495 $ 17 3% $271 $254 $17 7% 53% 51% 2
SciPlay 187 202 (15) (7)% 66 64 2 3% 35% 32% 3
iGaming 91 77 14 18% 33 27 6 22% 36% 35% 1
Corporate and
other(6) -- -- -- --% (43) (34) (9) (26)% n/a n/a n/a
--- --- --- --- ---
Total $790 $774 $ 16 2% $327 $311 $16 5% 41% 40% 1
PP -- percentage points.
n/a -- not applicable.
(1) Per share amounts are calculated based on weighted average number of diluted shares.
(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) Additional terms of the Aristocrat settlement are described in the Company's press release dated
January 11, 2026, available on our website in the Investor Relations section.
(4) Segment AEBITDA Margin is calculated as segment AEBITDA as a percentage of segment revenue.
(5) As calculations are made using whole dollar numbers, actual results may vary compared to
calculations presented in this table.
(6) Includes amounts not allocated to the business segments (including corporate costs) and other
non-operating expenses (income).
First Quarter 2026 Business Segments Key Highlights
-- Gaming revenue was $512 million, up 3% compared to the prior year
period. Gaming operations grew $66 million, or 38%, benefiting from an
increase in our North American installed base of 1,805 units(1), up 5%
year-over-year to 36,306 units(1). Our North American premium installed
base grew for the 23rd consecutive quarter, and now represents 56% of our
total North American installed base mix(1), with a unit increase of over
2,550 units on a year-over-year basis or 650 units on a sequential basis.
Our diversified portfolio of successful game franchises and the continued
proliferation of our COSMIC(R), COSMIC UPRIGHT, LIGHTWAVE(R) and
HORIZON(R) cabinets continued to drive growth and strong performance. The
increase in Gaming revenue also benefited from Table Products revenue
increasing 24%, while Gaming machine sales revenue decreased by 25%,
reflecting the timing of international and North America VLT shipments in
the prior year period, and Gaming Systems revenue decreased by 14%,
primarily due to lower hardware sales. Grover contributed $43 million to
Gaming operations revenue, driven by a sequential increase of 660 units.
At period end, Grover had over 12,200 installed base units. Gaming
AEBITDA was $271 million, up 7% compared to the prior year period due to
revenue growth and favorable revenue mix, leading to margin expansion of
200 basis points, inclusive of Grover contributions.
-- SciPlay revenue was $187 million, a 7% decrease compared to the prior
year period. This was driven by a decline in average monthly JACKPOT
PARTY(R) Casino payers, partially offset by an increase in average
monthly revenue per paying user. Daily Active Users, or DAU, remained
relatively flat sequentially, while monetization remains a key focus, as
AMRPPU(2) grew 8% year-over-year to $126.30. AEBITDA increased 3% to $66
million, and AEBITDA margin increased by 300 basis points, primarily
driven by our growing DTC platform, a key building block in SciPlay's
margin enhancement initiatives. DTC contributed $50 million, or 27%, of
the total SciPlay revenue for the quarter.
-- iGaming revenue increased 18% to $91 million, and AEBITDA increased 22%
to $33 million, with AEBITDA margin expanding around 100 basis points to
36%. This marks another consecutive quarter of double-digit growth in
both revenue and AEBITDA driven by continued momentum in North America
underpinned by first-party content proliferation and the expansion of our
partner network. Wagers processed through our iGaming platform reached a
quarterly record of $29.9 billion.
-- Capital expenditures were $74 million in the first quarter of 2026,
compared to $61 million in the prior year period, primarily due to
investments made to support Gaming operations growth, including Grover.
(1) Excludes Grover charitable gaming units.
(2) Average Monthly Revenue Per Paying User.
Earnings Conference Call
As previously announced, Light & Wonder executive leadership will host a conference call on Wednesday, May 6, 2026 at 7:00 p.m. EDT (Thursday, May 7, 2026 at 9:00 a.m. AEST) to review the Company's first 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 register for a unique PIN at Light & Wonder earnings call and dial: +1 (844) 543-0451 for U.S., +61 1800 491 687 for Australia or +1 (864) 991-4103 for International. A replay of the webcast will be archived in the Investors section on www.lnw.com.
About Light & Wonder
Light & Wonder, Inc. is a leading cross-platform global games company. Through our three unique, yet highly complementary business segments, we deliver unforgettable experiences by combining the exceptional talents of our 6,500+ member team, with a deep understanding of our customers and players. We create immersive content that forges lasting connections with players, wherever they choose to engage. At Light & Wonder, it's all about the games. 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 Securities 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. We also release material information to the ASX in compliance with the ASX Listing Rules.
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 (R) notices signify marks registered in the United States. (c) 2026 Light & Wonder, Inc. 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 current Company management ("Management") 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:
-- our inability to successfully execute our strategy;
-- slow growth of new gaming jurisdictions, slow addition of casinos in
existing jurisdictions and declines in the replacement cycle of gaming
machines;
-- risks relating to foreign operations, including anti-corruption laws,
fluctuations in currency rates, restrictions on the payment of dividends
from earnings, restrictions on the import of products and financial
instability;
-- difficulty predicting what impact new or increased tariffs imposed by
and other trade actions taken by the U.S. and foreign jurisdictions could
have on our business;
-- U.S. and international economic and industry conditions, including
changes in consumer sentiment and discretionary spending, increases in
benchmark interest rates and the effects of inflation;
-- public perception of our response to environmental, social and
governance (or "ESG") issues;
-- the effects of health epidemics, contagious disease outbreaks and
public perception thereof;
-- changes in, progress under, or the elimination of our share repurchase
program;
-- level of our indebtedness, higher interest rates, availability or
adequacy of cash flows and liquidity to satisfy indebtedness, other
obligations or future cash needs;
-- inability to further reduce or refinance our indebtedness;
-- restrictions and covenants in debt agreements, including those that
could result in acceleration of the maturity of our indebtedness;
-- competition;
-- inability to win, retain or renew, or unfavorable revisions of,
existing contracts, and the inability to enter into new contracts;
-- risks and uncertainties of ongoing changes in U.K. gaming legislation,
including any new or revised licensing and taxation regimes, responsible
gambling requirements and/or sanctions on unlicensed providers;
-- inability to adapt to, and offer products that keep pace with, evolving
technology, including any failure of our investment of significant
resources in our R&D efforts;
-- failure of our investments in artificial intelligence and
infrastructure to achieve some or all of their intended benefits,
including improved efficiency and growth;
-- failure to retain key management and employees;
-- unpredictability and severity of catastrophic events, including but not
limited to acts of terrorism, war, armed conflicts or hostilities, the
impact such events may have on our customers, suppliers, employees,
consultants, business partners or operations, as well as management's
response to any of the aforementioned factors;
-- changes in demand for our products and services;
-- dependence on suppliers and manufacturers;
-- SciPlay's dependence on certain key providers;
-- ownership changes and consolidation in the gaming industry;
-- fluctuations in our results due to seasonality and other factors;
-- the risk that any potential disruptions from the Grover acquisition
will harm relationships with customers, employees and suppliers;
-- the possibility that the Company may be unable to achieve expected
financial, operational and strategic benefits of the Grover acquisition
and may not be able to successfully integrate Grover into the Company's
operations;
-- risks relating to delisting our securities from Nasdaq and
transitioning to a sole primary listing on the ASX, which could
negatively affect the liquidity and trading prices of our common stock or
CDIs, impacts our investors' ability to trade in our securities and our
access to the capital markets and could lead to price variations and
other impacts on holders of our common stock, CDIs and other securities;
-- risks associated with having a sole primary listing on the ASX and
remaining an SEC registrant, including significant compliance costs and
risks of noncompliance;
-- security and integrity of our products and systems, including the
impact of any security breaches or cyber-attacks;
-- protection of our intellectual property, inability to license
third-party intellectual property and the intellectual property rights of
others;
-- reliance on or failures in information technology and other systems;
-- litigation and other liabilities relating to our business, including
litigation and liabilities relating to our contracts and licenses, our
products and systems, our employees (including labor disputes),
intellectual property, environmental laws and our strategic
relationships;
-- reliance on technological blocking systems;
-- challenges or disruptions relating to the completion of the domestic
migration of, and recent acquisition integrations into, our enterprise
resource planning system;
-- laws, government regulations and new or increased trade tariffs, both
foreign and domestic, including those relating to gaming, data privacy
and security, including with respect to the collection, storage, use,
transmission and protection of personal information and other consumer
data, and environmental laws, and those laws and regulations that affect
companies conducting business on the Internet, including online
gambling;
-- legislative interpretation and enforcement, regulatory perception and
regulatory risks with respect to gaming, including Internet wagering,
social gaming, prediction markets and sweepstakes;
-- changes in tax laws or tax rulings, or the examination of our tax
positions;
-- opposition to legalized gaming or the expansion of such opposition and
potential restrictions;
-- significant opposition in some jurisdictions to interactive social
gaming, including social casino gaming and how such opposition could lead
these jurisdictions to adopt legislation or impose a regulatory framework
to govern interactive social gaming or social casino gaming specifically,
and how this could result in a prohibition on interactive social gaming
or social casino gaming altogether, restrict our ability to advertise our
games, or substantially increase our costs to comply with these
regulations;
-- expectations of the shift to regulated digital gaming;
-- inability to develop successful products and services and capitalize on
trends and changes in our industries, including the expansion of Internet
and other forms of digital gaming;
-- the continuing evolution of the scope of data privacy and security
regulations, and our belief that the adoption of increasingly restrictive
regulations in this area is likely within the U.S. and globally;
-- incurrence of restructuring costs;
-- goodwill impairment charges including changes in estimates or judgments
related to our impairment analysis of goodwill or other intangible
assets;
-- stock price volatility;
-- failure to maintain adequate internal control over financial
reporting;
-- dependence on key executives;
-- natural events, including natural disasters, extreme weather and other
natural events related to climate change, that disrupt our operations, or
those of our customers, suppliers or regulators; and
-- expectations of growth in total consumer spending on social casino
gaming.
Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in our filings with the SEC and lodgements with the ASX, including the Company's Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and its latest Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 24, 2026 (including under the headings "Forward-Looking Statements" and "Risk Factors"). Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the U.S. federal securities laws and ASX Listing Rules obligations, we undertake no, and expressly disclaim any, obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
You should also note that this press release may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us, and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning the international gaming, charitable gaming, social and digital gaming industries than the same industries in the U.S.
Due to rounding, certain numbers presented herein may not precisely recalculate. Unless otherwise stated, '$' denotes U.S. dollars.
LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share amounts)
Three Months Ended
March 31,
------------------------
2026 2025
------------ ----------
Revenue:
Services $ 595 $ 527
Products 195 247
------- ------
Total revenue 790 774
Operating expenses:
Cost of services(1) 110 111
Cost of products(1) 84 100
Selling, general and administrative 237 217
Research and development 67 65
Depreciation, amortization and impairments 108 91
Restructuring and other 54 20
------- ------
Total operating expenses 660 604
------- ------
Operating income 130 170
Other (expense) income:
Interest expense (81) (68)
Loss on debt financing transactions (2) (1)
Other income, net 15 4
------- ------
Total other expense, net (68) (65)
------- ------
Net income before income taxes 62 105
Income tax expense (10) (23)
------- ------
Net income $ 52 $ 82
======= ======
Basic and diluted net income per share:
Basic $ 0.68 $ 0.97
Diluted $ 0.66 $ 0.94
Weighted average number of shares used in per
share calculations:
Basic shares 77.6 85.0
Diluted shares 79.2 86.9
(1) Excludes depreciation, amortization and impairments.
LIGHT & WONDER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
March 31, December 31,
2026 2025
----------- --------------
Assets:
Cash and cash equivalents $ 147 $ 167
Restricted cash 102 94
Receivables, net of allowance for credit losses
of $28 and $29, respectively 614 689
Inventories, net 185 169
Prepaid expenses, deposits and other current
assets 157 164
------- ----------
Total current assets 1,205 1,283
Restricted cash 4 5
Receivables, net of allowance for credit losses
of $3 and $2, respectively 94 96
Property and equipment, net 347 348
Operating lease right-of-use assets 42 43
Goodwill 3,370 3,371
Intangible assets, net 769 808
Software, net 195 191
Deferred income taxes 279 254
Other assets 60 63
------- ----------
Total assets $ 6,365 $ 6,462
======= ==========
Liabilities and Stockholders' Equity:
Current portion of long-term debt $ 58 $ 53
Accounts payable 147 189
Accrued liabilities 437 535
Income taxes payable 34 26
------- ----------
Total current liabilities 676 803
Deferred income taxes 10 11
Operating lease liabilities 28 29
Other long-term liabilities 258 264
Long-term debt, excluding current portion 5,082 5,110
Total stockholders' equity 311 245
------- ----------
Total liabilities and stockholders' equity $ 6,365 $ 6,462
======= ==========
LIGHT & WONDER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Three Months Ended
March 31,
----------------------------
2026 2025
------------- -------------
Cash flows from operating activities:
Net income $ 52 $ 82
Adjustments to reconcile net income to net
cash provided by operating activities 111 107
Changes in working capital accounts,
excluding the effects of acquisitions (24) (4)
----- ------
Net cash provided by operating activities 139 185
Cash flows from investing activities:
Capital expenditures (74) (61)
Other 1 (1)
----- ------
Net cash used in investing activities (73) (62)
Cash flows from financing activities:
(Payments) proceeds of long-term debt, net (25) 35
Payments of debt issuance and deferred
financing costs (2) (3)
Payments on license obligations (4) (5)
Purchase of L&W common stock (22) (166)
Net redemptions of common stock under
stock-based compensation plans and other (26) (32)
----- ------
Net cash used in financing activities (79) (171)
Effect of exchange rate changes on cash, cash
equivalents and restricted cash -- 3
----- ------
Decrease in cash, cash equivalents and
restricted cash (13) (45)
Cash, cash equivalents and restricted cash,
beginning of period 266 312
----- ------
Cash, cash equivalents and restricted cash,
end of period $ 253 $ 267
===== ======
Supplemental cash flow information:
Cash paid for interest $ 68 $ 54
Income taxes paid 15 24
Supplemental non-cash transactions:
Non-cash interest expense $ 3 $ 2
LIGHT & WONDER, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED AEBITDA, NORMALIZED EBITDA, NORMALIZED
EBITA, ADJUSTED NPATA, AND ADJUSTED NPAT, SUPPLEMENTAL BUSINESS SEGMENT
DATA AND RECONCILIATION TO CONSOLIDATED AEBITDA MARGIN
(Unaudited, in millions)
Three Months Ended
March 31,
--------------------------
2026 2025
--------------- ---------
Reconciliation of Net Income to Consolidated
AEBITDA
Net income $ 52 $ 82
Restructuring and other(1) 54 20
Other income, net (12) (1)
Loss on debt financing transactions 2 1
Income tax impact on adjustments (9) (5)
--- ----- ----
Adjusted NPAT 87 97
Amortization of acquired intangibles and
impairments(2) 36 26
Income tax impact on adjustments (8) (6)
--- ----- ----
Adjusted NPATA 115 117
Interest expense 81 68
Income tax expense and adjustments 27 34
--- ----- --- ----
Normalized EBITA(3) 223 219
Depreciation and amortization expense 72 65
--- ----- --- ----
Normalized EBITDA 295 284
Stock-based compensation 32 27
--- ----- --- ----
Consolidated AEBITDA $ 327 $ 311
=== ===== === ====
Supplemental Business Segment Data
Business segments AEBITDA
Gaming $ 271 $ 254
SciPlay 66 64
iGaming 33 27
--- ----- --- ----
Total business segments AEBITDA 370 345
Corporate and other(4) (43) (34)
--- ----- ----
Consolidated AEBITDA $ 327 $ 311
=== ===== === ====
Reconciliation to Consolidated AEBITDA Margin
Net income $ 52 $ 82
Consolidated AEBITDA 327 311
Revenue 790 774
--- ----- --- ----
Net income margin 7% 11%
--- ----- ----
Consolidated AEBITDA margin (Consolidated
AEBITDA/Revenue) 41% 40%
--- ----- ----
(1) Refer to the Consolidated AEBITDA definition below for a description
of items included in restructuring and other.
(2) Includes $2 million and $3 million in impairment charges for the three
months ended March 31, 2026 and 2025, respectively.
(3) Represents normalized earnings before interest, taxes and amortization
of acquired intangibles and impairments. Refer to non-GAAP financial
measure definitions below for further details.
(4) Includes amounts not allocated to the business segments (including
corporate costs) and other non-operating expenses (income).
LIGHT & WONDER, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME PER SHARE TO ADJUSTED NPATA PER SHARE ON
DILUTED BASIS
(Unaudited, in per share amounts)
Three Months Ended
March 31,
------------------------
2026 2025
------------ ----------
Reconciliation of Net Income Per Share to
Adjusted NPATA Per Share
Net income per share -- Diluted $ 0.66 $ 0.94
Amortization of acquired intangibles and
impairments 0.45 0.30
Restructuring and other 0.68 0.23
Other income, net (0.14) --
Loss on debt financing transactions 0.02 0.01
Income tax impact on adjustments (0.22) (0.13)
------- ------
Adjusted NPATA per share -- Diluted $ 1.45 $ 1.35
======= ======
LIGHT & WONDER, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION - SEGMENT KEY PERFORMANCE INDICATORS AND
SUPPLEMENTAL FINANCIAL DATA
(Unaudited, in millions, except unit and per unit data or as otherwise
noted)
Three Months Ended
------------------------------------------
March 31, March 31, December 31,
2026 2025 2025
----------- ----------- ----------------
Gaming Business Segment
Supplemental Financial
Data:
Revenue by Line of
Business:
Gaming operations(1) $ 239 $ 173 $ 237
Gaming machine sales 156 208 234
Gaming systems 54 63 77
Table products 63 51 54
------ ------ --------
Total revenue $ 512 $ 495 $ 602
Gaming Operations:
U.S. and Canada:(1)
Installed base at period
end 48,600 34,501 48,326
Average daily revenue
per unit $ 48.01 $ 46.68 $ 47.00
International:(2)
Installed base at period
end 18,710 19,896 18,898
Average daily revenue
per unit $ 15.96 $ 15.07 $ 15.49
Gaming Machine Sales:
U.S. and Canada new unit
shipments 5,024 5,769 7,000
International new unit
shipments 2,176 4,001 5,361
------ ------ --------
Total new unit shipments 7,200 9,770 12,361
Average sales price per
new unit $19,722 $19,996 $ 17,168
Gaming Machine Unit Sales
Components:
U.S. and Canada unit
shipments:
Replacement units 4,731 5,398 6,396
Casino opening and
expansion units 293 371 604
------ ------ --------
Total unit shipments 5,024 5,769 7,000
International unit
shipments:
Replacement units 2,107 2,998 5,361
Casino opening and
expansion units 69 1,003 --
------ ------ --------
Total unit shipments 2,176 4,001 5,361
SciPlay Business Segment
Supplemental Financial
Data:
Revenue by Platform:
Third-party platforms
and other(3) $ 137 $ 175 $ 147
Direct-to-consumer
platforms 50 27 48
------ ------ --------
Total revenue $ 187 $ 202 $ 195
In-App Purchases:
Average MAU(4) 5.1 5.5 4.9
Average DAU(5) 1.9 2.1 1.9
ARPDAU(6) $ 1.05 $ 1.06 $ 1.10
Average MPU(7) (in
thousands) 486 572 483
AMRPPU(8) $126.30 $116.96 $ 133.24
Payer Conversion Rate(9) 9.6% 10.4% 9.9%
iGaming Business Segment
Supplemental Data:
Wagers processed through
Open Gaming System (in
billions) $ 29.9 $ 25.2 $ 29.2
(1) Inclusive of Grover charitable gaming installed base.
(2) Units exclude those related to game content licensing.
(3) Other primarily represents advertising revenue, which was not
material for the periods presented.
(4) MAU = Monthly Active Users is a count of visitors to our sites
during a month. An individual who plays multiple games or from
multiple devices may, in certain circumstances, be counted more than
once. However, we use third-party data to limit the occurrence of
multiple counting.
(5) DAU = Daily Active Users is a count of visitors to our sites
during a day. An individual who plays multiple games or from multiple
devices may, in certain circumstances, be counted more than once.
However, we use third-party data to limit the occurrence of multiple
counting.
(6) ARPDAU = Average Revenue Per DAU is calculated by dividing revenue
for a period by the DAU for the period by the number of days for the
period.
(7) MPU = Monthly Paying Users is the number of individual users who
made an in-game purchase during a particular month.
(8) AMRPPU = Average Monthly Revenue Per Paying User is calculated by
dividing average monthly revenue by average MPUs for the applicable
time period.
(9) Payer conversion rate is calculated by dividing average MPU for
the period by the average MAU for the same period.
LIGHT & WONDER, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO CONSOLIDATED AEBITDA
(Unaudited, in millions)
Twelve Months Ended
--------------------------------------------
March 31, 2026 December 31, 2025
-------------------- ----------------------
Net income $ 246 $ 276
Restructuring and other 253 219
Depreciation, amortization
and impairments 424 406
Other expense, net 2 13
Interest expense 327 314
Income tax expense 76 89
Stock-based compensation 125 121
Loss on debt financing
transactions 6 5
--- --------------- ---- ----------------
Consolidated AEBITDA $ 1,459 $ 1,443
=== =============== ==== ================
RECONCILIATION OF GROVER OPERATING INCOME TO GROVER ADJUSTED EBITDA
(Unaudited, in millions)
For the Period For the Period
from April 1, 2025 from January 1, 2025
to May 15, 2025 to May 15, 2025
-------------------- ----------------------
Grover Charitable Gaming
operating income $ 14 $ 40
Depreciation and
amortization 2 6
--- --------------- ---- ----------------
Grover Adjusted EBITDA(1) $ 16 $ 46
=== =============== ==== ================
Twelve Months Ended
--------------------------------------------
March 31, 2026 December 31, 2025
-------------------- ----------------------
Combined AEBITDA(2) $ 1,475 $ 1,489
=== =============== ==== ================
RECONCILIATION OF PRINCIPAL FACE VALUE OF DEBT OUTSTANDING TO NET DEBT, NET
DEBT LEVERAGE RATIO AND COMBINED NET DEBT LEVERAGE RATIO
(Unaudited, in millions, except for ratios)
As of
--------------------------------------------
March 31, 2026 December 31, 2025
-------------------- ----------------------
Consolidated AEBITDA $ 1,459 $ 1,443
--- --------------- ---- ----------------
Combined AEBITDA(2) 1,475 1,489
Total debt $ 5,140 $ 5,163
Add: Unamortized debt
discount/premium and
deferred financing costs,
net 42 44
--- --------------- ---- ----------------
Principal face value of debt
outstanding 5,182 5,207
Less: Cash and cash
equivalents 147 167
--- --------------- ---- ----------------
Net debt $ 5,035 $ 5,040
Net debt leverage ratio 3.5 3.5
Combined net debt leverage
ratio(3) 3.4 3.4
(1) Grover Adjusted EBITDA, a non-GAAP measure, is unaudited and based on
preliminary estimates and assumptions. See below for further description and
disclaimers associated with this non-GAAP measure.
(2) Combined AEBITDA consists of Consolidated AEBITDA and Grover Adjusted
EBITDA. Refer to non-GAAP financial measure definitions below for further
details.
(3) Combined net debt leverage ratio represents Net debt divided by Combined
AEBITDA. Refer to non-GAAP financial measure definitions below for further
details.
LIGHT & WONDER, INC. AND SUBSIDIARIES
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH
FLOW AND ADJUSTED FREE CASH FLOW
(Unaudited, in millions)
Three Months Ended
March 31,
----------------------------
2026 2025
--------------- -----------
Net cash provided by operating activities $ 139 $ 185
Less: Capital expenditures (74) (61)
Less: Payments on license obligations (4) (5)
Less: Change in restricted cash impacting
working capital (6) (8)
---- ----- ----
Free cash flow 55 111
Add: Legal settlements and related 137 --
Add: Strategic initiatives and M&A
transactions costs(1) 15 --
---- ----- ----
Adjusted Free cash flow $ 207 $ 111
==== ===== ====
(1) Professional fees, services and other costs related to strategic
initiatives, the Grover acquisition and transition to an ASX sole primary
listing.
Non-GAAP Financial Measures
Management uses the following non-GAAP financial measures in conjunction with GAAP financial measures: Adjusted NPAT, Adjusted NPATA, Adjusted NPATA per share (on a diluted basis) (also referred to as EPSa), Normalized EBITA, Normalized EBITDA, Consolidated AEBITDA, Grover Adjusted EBITDA, Combined AEBITDA, Consolidated AEBITDA margin, Free cash flow, Adjusted Free cash flow, Net debt, Net debt leverage ratio and Combined net debt leverage ratio (each, as described more fully below). These non-GAAP financial measures are presented as supplemental disclosures. They should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. The non-GAAP financial measures used by the Company may differ from similarly titled measures presented by other companies.
Following our transition to a sole primary listing on the ASX, Management introduced usage of Adjusted NPAT, Adjusted NPATA, Adjusted NPATA per share (EPSa), Normalized EBITA and Normalized EBITDA, all of which are non-GAAP financial measures and are widely used to measure the performance as well as a principal basis for valuation of gaming and other companies listed on the ASX.
Specifically, Management uses Consolidated AEBITDA to, among other things: (i) monitor and evaluate the performance of the Company's operations; (ii) facilitate Management's internal and external comparisons of the Company's consolidated historical operating performance; and (iii) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets.
In addition, Management uses Consolidated AEBITDA and Consolidated AEBITDA margin to facilitate its external comparisons of the Company's consolidated results to the historical operating performance of other companies that may have different capital structures and debt levels.
Following the closing of the Grover acquisition, Management introduced usage of certain of these non-GAAP financial measures on a "Combined" basis. Combined non-GAAP financial measures include results for both the Company and Grover on a combined basis, inclusive of periods prior to the closing of the acquisition. The Combined measures do not reflect any pro forma adjustments or other adjustments for costs related to integration activities, cost savings or other synergies that have been or may have been achieved if the business combination occurred as of the beginning of the applicable twelve-month period. We cannot assure you that such measures would not be materially different if such information were audited or that our actual results would not differ materially from the Combined measures if the acquisition had been completed as of the beginning of the applicable twelve-month period.
Management uses Net debt, Net debt leverage ratio and Combined net debt leverage ratio in monitoring and evaluating the Company's overall liquidity, financial flexibility and leverage.
Management believes that these non-GAAP financial measures are useful as they provide Management and investors with information regarding the Company's financial condition and operating performance that is an integral part of Management's reporting and planning processes. In particular, Management believes Adjusted NPAT, Adjusted NPATA, Adjusted NPATA per share, Normalized EBITA and Normalized EBITDA are useful for investors because they provide investors with additional perspective on performance, as the measures eliminate the effects of, as applicable, amortization of acquired intangible assets, restructuring, transaction, integration, certain other items, and the income tax impact on such adjustments, which Management believes are less indicative of the ongoing underlying performance of operations and are better evaluated separately. These measures are widely used to measure performance of gaming and other companies listed on the ASX.
Management believes that Consolidated AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that Management believes are less indicative of the ongoing underlying performance of the Company's operations (as more fully described below) and are better evaluated separately. Management believes that Free cash flow and Adjusted Free cash flow provide useful information regarding the Company's liquidity and its ability to service debt and fund investments.
Management believes that the Combined measures are useful to investors because they provide additional information regarding the combined business of the Company and Grover across the periods being presented, allowing for more meaningful comparisons of overall liquidity, financial flexibility and leverage.
Management also believes that Free cash flow and Adjusted Free cash flow are useful for investors because they provide investors with important perspectives on the cash available for debt repayment and other strategic measures, after making necessary capital investments in property and equipment, necessary license payments to support the ongoing business operations, adjustments for changes in restricted cash impacting working capital, and, in the case of Adjusted Free cash flow, further adjustments for legal settlements and strategic initiatives cash payments.
Adjusted NPAT and Adjusted NPATA
Adjusted NPAT and Adjusted NPATA, as used herein, are non-GAAP financial measures that are presented as supplemental disclosures of the Company's operations and are reconciled to net income as the most directly comparable GAAP measure, as set forth in the schedule titled "Reconciliation of Consolidated AEBITDA, Normalized EBITDA, Normalized EBITA, Adjusted NPATA and Adjusted NPAT, Supplemental Business Segment Data and Reconciliation to Consolidated AEBITDA Margin," which includes reconciliations for several non-GAAP financial measures. Adjusted NPAT and Adjusted NPATA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. Adjusted NPAT and Adjusted NPATA may differ from similarly titled measures presented by other companies.
Adjusted NPAT is reconciled to Net income and includes the following adjustments, as applicable: (1) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) Management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs, strategic initiatives and other unusual items; (2) Loss on debt financing transactions; (3) Change in fair value of investments and Gain on remeasurement of debt and other; (4) Income tax impact on adjustments; and (5) Other income, net, including foreign currency gains or losses and earnings from equity investments. Adjusted NPATA is reconciled to Net income and includes the following incremental adjustments to those used to reconcile Adjusted NPAT: (1) Amortization of acquired intangible assets; (2) Non-cash asset and goodwill impairments; and (3) Income tax impact on adjustments.
Adjusted NPATA Per Share -- Diluted (EPSa)
Adjusted NPATA per share (EPSa), as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company's operations on diluted basis and is reconciled to diluted net income per share as the most directly comparable GAAP measure, as set forth in the schedule titled "Reconciliation of Net Income Per Share to Adjusted NPATA Per Share on Diluted Basis." Adjusted NPATA per share should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. Adjusted NPATA per share may differ from similarly titled measures presented by other companies. Adjusted NPATA per share is reconciled to diluted net income per share and includes the same adjustments with respect to Adjusted NPATA as described in the schedule titled "Reconciliation of Consolidated AEBITDA, Normalized EBITDA, Normalized EBITA, Adjusted NPATA and Adjusted NPAT, Supplemental Business Segment Data and Reconciliation to Consolidated AEBITDA Margin" in per share amounts. Adjusted NPATA per share target, or Targeted EPSa, denotes a non-GAAP financial measure. We are not providing a forward-looking quantitative reconciliation of Adjusted NPATA per share target to the most directly comparable GAAP measure because we are unable to do so without unreasonable efforts or to reasonably estimate the projected outcome of certain significant items. These items are uncertain, depend on various factors out of our control and could have a material impact on the corresponding measures calculated in accordance with GAAP.
Normalized EBITA and Normalized EBITDA
Normalized EBITA and Normalized EBITDA, as used herein, are non-GAAP financial measures that are presented as supplemental disclosures of the Company's operations and are reconciled to net income as the most directly comparable GAAP measure, as set forth in the schedule titled "Reconciliation of Consolidated AEBITDA, Normalized EBITDA, Normalized EBITA, Adjusted NPATA and Adjusted NPAT, Supplemental Business Segment Data and Reconciliation to Consolidated AEBITDA Margin," which includes reconciliations for several non-GAAP financial measures. Normalized EBITA and Normalized EBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. Normalized EBITA and Normalized EBITDA may differ from similarly titled measures presented by other companies.
Normalized EBITA is reconciled to Net income and includes the following adjustments, as applicable: (1) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) Management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs, strategic initiatives and other unusual items; (2) Loss on debt financing transactions; (3) Change in fair value of investments and Gain on remeasurement of debt and other; (4) Other income, net, including foreign currency gains or losses and earnings from equity investments; (5) Amortization of acquired intangible assets; (6) Non-cash asset and goodwill impairments; (7) Interest expense; and (8) Income tax expense and impact on adjustments. Normalized EBITDA is reconciled to Net income and, along with the adjustments used to reconcile Normalized EBITA, includes an adjustment for depreciation and amortization expense.
Consolidated AEBITDA
Consolidated AEBITDA, as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company's operations and is reconciled to net income as the most directly comparable GAAP measure, as set forth in the schedule titled "Reconciliation of Consolidated AEBITDA, Normalized EBITDA, Normalized EBITA, Adjusted NPATA and Adjusted NPAT, Supplemental Business Segment Data and Reconciliation to Consolidated AEBITDA Margin," which includes reconciliations for several non-GAAP financial measures. Consolidated AEBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. Consolidated AEBITDA may differ from similarly titled measures presented by other companies.
Consolidated AEBITDA is reconciled to Net income and includes the following adjustments, as applicable: (1) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs, strategic initiatives and other unusual items; (2) Depreciation, amortization and impairment charges and Goodwill impairments; (3) Loss on debt financing transactions; (4) Change in fair value of investments and Gain on remeasurement of debt and other; (5) Interest expense; (6) Income tax expense and impact on adjustments; (7) Stock-based compensation; and (8) Other income, net, including foreign currency gains or losses and earnings from equity investments. AEBITDA is presented exclusively as our segment measure of profit or loss. Consolidated AEBITDA target denotes a non-GAAP financial measure. We are not providing a forward-looking quantitative reconciliation of Consolidated AEBITDA target to the most directly comparable GAAP measure because we are unable to do so without unreasonable efforts or to reasonably estimate the projected outcome of certain significant items. These items are uncertain, depend on various factors out of our control and could have a material impact on the corresponding measures calculated in accordance with GAAP.
Grover Adjusted EBITDA
Grover Adjusted EBITDA, as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure, is unaudited and based on preliminary estimates and assumptions, and is reconciled to Grover Charitable Gaming's operating income, the most directly comparable GAAP measure, as set forth in the schedule titled "Reconciliation of Grover Operating Income to Grover Adjusted EBITDA." Grover Adjusted EBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. Grover Adjusted EBITDA may differ materially from similarly titled measures presented by other companies, including Consolidated AEBITDA, and is presented solely for the purposes of calculating and reconciling Combined AEBITDA and calculating Combined net debt leverage ratio, including periods prior to the acquisition. Grover Adjusted EBITDA is not calculated consistently with Consolidated AEBITDA, and includes different adjustments based on the unaudited and preliminary financial statements provided by Grover's management prior to the closing of the acquisition.
Grover Adjusted EBITDA is reconciled to Grover Charitable Gaming's operating income, and includes the following adjustments, as applicable: (1) depreciation and amortization; (2) other income/expenses primarily related to non-operating gain and losses; and (3) elimination of certain non-recurring distribution costs expected to be eliminated in connection with the consummation of the acquisition and certain other immaterial adjustments.
Combined AEBITDA
Combined AEBITDA, as used herein, is a non-GAAP financial measure that combines Consolidated AEBITDA and Grover Adjusted EBITDA and is presented as a supplemental disclosure. Combined AEBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP and should be read in conjunction with the Company's financial statements filed with the SEC and lodged with the ASX. Combined AEBITDA may differ from similarly titled measures presented by other companies and is presented only for purposes of calculating and reconciling Combined net debt leverage ratio.
Consolidated AEBITDA Margin
Consolidated AEBITDA margin, as used herein, represents our Consolidated AEBITDA (as defined above) calculated as a percentage of consolidated revenue. Consolidated AEBITDA margin is a non-GAAP financial measure that is presented as a supplemental disclosure for illustrative purposes only and is reconciled to net income, the most directly comparable GAAP measure, in the schedule above titled "Reconciliation of Consolidated AEBITDA, Normalized EBITDA, Normalized EBITA, Adjusted NPATA and Adjusted NPAT, Supplemental Business Segment Data and Reconciliation to Consolidated AEBITDA Margin."
Free Cash Flow and Adjusted Free Cash Flow
Free cash flow, as used herein, represents net cash provided by operating activities less total capital expenditures, less payments on license obligations, plus payments on contingent acquisition considerations and adjusted for changes in restricted cash impacting working capital. Adjusted Free cash flow is further adjusted for legal settlements and strategic initiatives cash payments. Free cash flow and Adjusted Free cash flow are non-GAAP financial measures that are presented as supplemental disclosures for illustrative purposes only and are reconciled to net cash provided by operating activities, the most directly comparable GAAP measure, in the schedule above titled "Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow."
Net Debt, Net Debt Leverage Ratio and Combined Net Debt Leverage Ratio
Net debt is defined as total principal face value of debt outstanding, the most directly comparable GAAP measure, less cash and cash equivalents. Principal face value of debt outstanding includes the face value of debt issued under Senior Secured Credit Facilities and Senior Notes, which are described in Note 14 of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and in Note 10 of the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2026.
Net debt leverage ratio, as used herein, represents Net debt divided by Consolidated AEBITDA. Combined net debt leverage ratio, as used herein, represents Net debt divided by Combined AEBITDA. The forward-looking non-GAAP financial measure targeted net debt leverage ratio is presented on a supplemental basis and does not reflect Company guidance. We are not providing a forward-looking quantitative reconciliation of targeted net debt leverage ratio to the most directly comparable GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items are uncertain, depend on various factors and could have a material impact on GAAP reported results for the relevant period.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260506514928/en/
CONTACT: Investor Relations
Rohan Gallagher
EVP, Global Chief Corporate Affairs Officer
ir@lnw.com
Media Relations
Andy Fouché
VP, Corporate Affairs and Communications
media@lnw.com
(END) Dow Jones Newswires
May 06, 2026 16:56 ET (20:56 GMT)