8-K: Light & Wonder Reports Record Full Year 2024 Results, Fueled by Double-Digit Growth

Light & Wonder announces record full-year consolidated revenue of $3.2 billion, a 10% increase year-over-year, driven by strong performance across all business segments.

Summary

• Light & Wonder reported record full-year consolidated revenue of $3.2 billion for 2024, a 10% increase compared to the previous year.
• Gaming revenue increased by 12% to $2.1 billion, driven by growth in gaming machine sales, systems, and operations.
• SciPlay revenue grew by 6% to $821 million, outpacing the social casino market.
• iGaming revenue increased by 9% to $299 million, reflecting growth in the U.S. and international markets.
• Operating income grew by 29%, Consolidated AEBITDA increased by 11%, and Adjusted NPATA grew by 24%.
• The company returned $462 million to shareholders through share repurchases in 2024.
• Net debt leverage ratio decreased to 3.0x as of December 31, 2024.
• The company expects first quarter 2025 year-over-year Consolidated AEBITDA growth to be in the low double-digits.
• Light & Wonder is considering a dual primary or sole listing on the ASX.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with record financial results, strategic acquisitions, and shareholder returns. While there are risks mentioned, the overall tone is optimistic and confident.

Positives

• Record full-year consolidated revenue of $3.2 billion, up 10% year-over-year.
• Strong growth in Gaming, SciPlay, and iGaming segments.
• Increased operating income, Consolidated AEBITDA, and Adjusted NPATA.
• Significant capital returned to shareholders through share repurchases.
• Successful expansion in North American Gaming operations.
• Strategic acquisition of Grover Gaming's charitable gaming business.
• Amendment of credit agreement providing increased revolving commitments and reduced applicable margin.
• North American premium installed base grew for the 18th consecutive quarter, representing 50% of the total North American installed base mix.
• SciPlay's direct-to-consumer platform generated $27 million, or 13% of the total SciPlay revenue for the quarter.

Negatives

• SciPlay revenue remained flat in the fourth quarter compared to the prior year period.
• Unfavorable changes in working capital partially offset earnings growth.
• The company entered into an agreement to pay $72.5 million to resolve antitrust claims related to its automatic card shuffler business.

Risks

• The company's inability to successfully execute its strategy.
• Risks relating to foreign operations, including anti-corruption laws and currency fluctuations.
• Potential impacts of new tariffs and trade actions.
• The effects of health epidemics and contagious disease outbreaks.
• Level of indebtedness and availability of cash flows.
• Competition and inability to win, retain, or renew existing contracts.
• Inability to adapt to evolving technology.
• Security and integrity of products and systems, including the impact of security breaches or cyber-attacks.
• Litigation and other liabilities relating to the business.
• Changes in tax laws or tax rulings.
• Opposition to legalized gaming or the expansion thereof.
• The risk that the conditions to the closing of the proposed Grover Gaming charitable business acquisition may not be satisfied.
• Risks as a result of being publicly traded in the United States and Australia, including price variations and other impacts relating to the secondary listing of the Company's common stock on the Australian Securities Exchange.
• Risks relating to consideration of a dual primary listing on both the NASDAQ and the ASX or sole primary listing on the ASX, including delisting our securities from NASDAQ, which could negatively affect the liquidity and trading prices of our common stock and could result in less disclosure about the Company.

Future Outlook

The company expects low double-digit Consolidated AEBITDA growth in the first quarter of 2025 and is considering a dual primary or sole listing on the ASX.

Management Comments

• Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, 'We ended a strong 2024 with continued double-digit revenue and earnings growth for the year.'
• Matt Wilson stated that the Gaming machine sales share gains in North America and Australia this year are a testament to our R&D investment, commercial strategy and robust product roadmap.
• Matt Wilson mentioned that the acquisition of Grover Gaming's charitable business enhances the company's cross-platform strategy and presence in regulated land-based markets.
• Oliver Chow, Chief Financial Officer of Light & Wonder, added, 'Our healthy financial foundation gives us flexibility to deploy capital where it best drives long-term value consistent with our capital deployment framework.'
• Oliver Chow stated that the acquisition of Grover Gaming's charitable business will contribute to the company's expansive recurring revenue base.
• Oliver Chow mentioned that the company executed a meaningful $462 million in share repurchases in 2024.
• Jamie Odell, Chair of the Light & Wonder Board of Directors, said, 'We look forward to engaging with the market and our existing shareholders to further elevate the profile of our ASX listing.'

Industry Context

Light & Wonder's performance reflects the ongoing growth in the gaming industry, particularly in North America and Australia. The company's focus on cross-platform gaming and strategic acquisitions aligns with industry trends towards diversification and expansion into new markets.

Comparison to Industry Standards

• Light & Wonder's 10% revenue growth surpasses the overall growth rate of the gaming market, indicating market share gains.
• The company's focus on recurring revenue streams, similar to companies like Aristocrat Leisure and IGT, provides stability and predictability.
• The strategic acquisition of Grover Gaming mirrors moves by other industry players to expand into new segments and geographies.
• Light & Wonder's share repurchase program is in line with capital allocation strategies employed by other large gaming companies to enhance shareholder value.
• The consideration of an ASX listing reflects a growing trend among global gaming companies to tap into the Australian market's deep understanding of the gaming sector, similar to Aristocrat Leisure's primary listing on the ASX.

Legal Proceedings

• The Company entered into an agreement to pay $72.5 million to resolve the antitrust claims related to its automatic card shuffler business brought in TCS John Huxley America, Inc., et al. v. Scientific Games Corporation, et al., in 2019.

Stakeholder Impact

• Shareholders benefit from increased revenue, earnings, and share repurchases.
• Employees benefit from a growing company with opportunities for advancement.
• Customers benefit from innovative products and services.
• Suppliers benefit from increased demand for their products and services.
• Creditors benefit from the company's strong financial performance and reduced leverage.

Next Steps

• Closing of the Grover Gaming acquisition expected in the second quarter of 2025.
• Evaluation of potential strategies for a dual primary or sole listing on the ASX.
• Continued focus on enhancing the liquidity and market capitalization of its ASX listing.
• Continued investment in R&D and product development.
• Continued execution of share repurchase program.

Key Dates