Light & Wonder sees double-digit growth across all segments in Q1

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Light & Wonder has reported a “strong start” to 2023 following a first quarter where double-digit revenue growth across all segments was achieved.

With new income records set for SciPlay and igaming operations, President and CEO Matt Wilson noted that the company is strengthening its position in the industry and achieving “enhanced returns” thanks to its strategy and investment.

In addition to its existing primary Nasdaq listing, L&W’s board of directors also noted that it is preparing for a potential secondary listing on the Australian Securities Exchange as the company seeks to enhance its profile in the country and gain access to new investors.

Publishing its Q1 financials, L&W declared a total revenue of $670m, up 17 per cent year-over-year (Q1 2022: $572m) thanks to double-digit growth across all segments, including new records set in SciPlay and igaming operations.

Gaming revenue increased by 18 per cent YoY to $419m (2022: $355m), SciPlay revenue rose by 18 per cent as well to $186m (2022: $158m), while igaming income rose by 10 per cent to $65m (2022: $59m).

The company noted that growth in gaming revenue was driven by “continued momentum in gaming machine sales”, which improved by 53 per cent to $158m (2022: $103m). Gaming operation revenues rose to $160m (2022: $155m), gaming systems improved to $55m (2022: $51m) and table products remained at $46m (2022: $46m).

L&W noted that gaming operation revenues benefitted from North American YoY growth in installed base and average daily revenue per unit, representing 46 per cent of the company’s total installed base mix.

SciPlay revenue improvements were attributed to the core social casino business, delivering “strong payer metrics and once again outpaced the market and gained share”. The segment also benefited from investments and player conversion rates as average revenue per daily active user rose by 20 per cent to a record $0.89.

Revenue in igaming rose by 10 per cent to $65m (2022: $59m) following “continued growth in the US market”, which delivered 34 per cent YoY growth after strong land-based original content launches and third-party aggregation scaling onto the company’s platform.

L&W added that it expects to launch its live casino offering in Michigan in the second half of the year, pending final regulatory approval.

Wilson stated: “We’re off to a strong start in 2023, delivering on all key metrics and once again driving double-digit revenue growth across all three of our businesses. Our strategy and disciplined investments are driving enhanced returns as we continue to develop and execute on our robust product roadmap, building off the strong momentum that we saw in 2022.

“The teams executed several notable wins and key launches in the quarter, and we have a full pipeline of games that support progress toward our long-term targets. With leading talent, technology and products, we continue to strengthen our position as the leading cross-platform global games company.”

L&W’s operating income in Q1 was $102m (2022: $40m) while net income stood at $27m, up from a net loss of $67m the previous year following “higher revenue and operating income as well as lower interest expense in the current period”.

AEBITDA for the company came in at $249m, a 23 per cent increase YoY (2022: $202m) thanks to the previously mentioned double-digit growth across all segments and an improved margin. AEBITDA margin rose by two percentage points to 37 per cent (2022: 35 per cent).

The company’s net debt currently stands at $3bn (2022: $3.03bn) with a net debt leverage ratio of 3.1x, a 0.2x decrease compared to the previous quarter (Q4: 3.3x).

As previously mentioned, L&W has also announced it is preparing for a potential secondary listing on the Australian Securities Exchange to go with its primary Nasdaq listing. 

The company’s board believes “there are substantial potential benefits for the company and its shareholders in pursuing a secondary listing on the ASX, including enhancing the company’s profile in Australia”, as well as gaining “access to new long-term Australian institutional investors that would complement its strong existing base of shareholders”.

Connie James, Chief Financial Officer of Light & Wonder, added: “We continue to capitalise on the strong growth opportunities that we see in our markets and drive margin enhancement across the business as we remain focused on operational excellence.

“This quarter demonstrates Light & Wonder’s favourable financial profile with strong topline growth flowing to the bottom line, and importantly strong cash conversion, enabling us to invest in future sustainable growth. 

“We continue to focus on generating significant cash flow while maintaining our balanced and opportunistic approach to capital management and a healthy balance sheet to enhance value for our shareholders.”