Light & Wonder, Inc. (LNW) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary reveals strong financial performance with revenue, EBITDA, and free cash flow growth. The acquisition of Grover Gaming and a robust share repurchase program are positive catalysts. The Q&A section indicates manageable challenges, with management providing optimistic guidance and strategies to mitigate risks. Despite some unclear responses, the overall sentiment is positive. The lack of market cap information prevents precise impact estimation, but based on available data, a positive stock price movement of 2% to 8% is expected over the next two weeks.
Key Financial Performance
Consolidated Revenue $774 million, a 2% increase year over year, driven by gaming and iGaming businesses.
Net Income $82 million, with diluted net income per share of $0.94 compared to $0.88 in the prior year period, impacted by higher restructuring and other expenses.
Consolidated EBITDA $311 million, an 11% increase year over year, with a consolidated EBITDA margin of 40%, a 300 basis point increase.
Adjusted NPATA $117 million, up 11% year over year, with adjusted NPATA per share increasing 21% to $1.35.
Operating Cash Flow $185 million, an 8% increase year over year.
Free Cash Flow $111 million, a 19% increase year over year, reflective of strong earnings and lower CapEx.
Gaming Revenue $495 million, a 4% increase year over year, with growth across all business lines.
Gaming Operations Revenue $173 million, a 5% increase year over year.
Global Gaming Machine Sales $208 million, up 1% year over year, primarily from strong performance in the North American replacement market.
Systems Revenue $63 million, a 5% increase year over year.
Table Products Revenue $51 million, a 9% increase year over year.
SciPlay Revenue $202 million, with Quick Hit Slots and 88 Fortunes growing 16% and 31% respectively.
iGaming Revenue $77 million, a 4% increase year over year.
EBITDA for SciPlay $64 million, a 3% increase year over year, with a margin of 32%.
EBITDA for iGaming $27 million, an 8% increase year over year.
Average Revenue per Daily Active User (SciPlay) $1.06, a 5% increase year over year.
Average Monthly Revenue per Paying User (SciPlay) $117, up 3% year over year.
Payer Conversion (SciPlay) 10.4%, increased by roughly 20 basis points.
Free Cash Flow Growth 19% increase to $111 million, reflective of strong earnings and lower CapEx.
Share Repurchase Program Completed an additional 17% of the $1 billion program, purchasing 1.9 million shares totaling $166 million.
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Operating Highlights
New Game Launches: Our Chief Product Officer has turbocharged our game launches with a robust roadmap of games coming across cabinets on both the gaming operations and game sales categories globally.
Game Performance: Light & Wonder holds 40% of the top 25 new premium and WAP games in the first quarter of 2025.
Game Sales: Over 9,700 global units shipped in the quarter, driven by share gains.
New Game Releases: New first party game launches, including Huff and More Puff and Wizard of Oz Over the Rainbow, set new single game GGR records.
Market Positioning: Exited 2024 as the number one ship share supplier globally and regained the number one position in Australia.
Market Expansion: Expect to broaden the runway for first party content as the overall iGaming market grows.
New Market Entry: Introduction of Elk games in the fast-growing Ontario market.
Charitable Gaming Acquisition: Acquisition of Grover Gaming’s charitable gaming asset expected to enhance market positioning.
Operational Efficiency: Consolidated EBITDA margin of 40%, a 300 basis point increase over the prior year period.
Revenue Growth: Sixteenth consecutive quarter of consolidated revenue growth, a 2% increase to $774 million.
Cost Management: Ongoing business reviews around margin enhancement and optimizing supply chain.
Strategic Focus: Renewed focus on high return initiatives, such as cultivating first party content.
R&D Investment: Continued reinvestment into R&D for sustainable growth.
Share Repurchase Program: Completed an additional 17% of our authorized $1 billion program, purchasing 1.9 million shares totaling $166 million.
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Risk or Challenges
Economic Environment: The company acknowledges uncertainty in the current markets and potential long-term structural shifts in policies that could lead to a softer macroeconomic environment, impacting operators and end consumers.
Supply Chain Challenges: Light & Wonder is navigating a dynamic environment regarding supply chain uncertainties, including potential tariff impacts. The company is executing long-term plans to enhance supply chain efficiency, including onshoring production and relocating sourcing.
Regulatory Issues: The recent legalization of e-pool tabs in Indiana is seen as a tailwind, but the company remains cautious about the regulatory landscape and its potential impacts on business operations.
Litigation Risks: The company is involved in ongoing litigation and has engaged a third-party expert to audit game releases for compliance, indicating potential risks associated with legal challenges.
Acquisition Risks: The pending acquisition of Grover Gaming's charitable gaming asset involves integration risks and the need for licensing approvals, which could impact operational stability.
Competitive Pressures: The company faces competitive pressures in the gaming industry, necessitating continuous innovation and adaptation to maintain market share.
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Guidance & Outlook
Product Roadmap: Focus on a comprehensive product roadmap, operational excellence, and cross-platform strategy to achieve double-digit consolidated EBITDA growth.
R&D Investment: Reinvesting into R&D for sustainable growth despite market uncertainties.
Game Performance: Continued growth in game performance, with 40% of the top 25 new premium and WAP games in Q1 2025.
Acquisition of Grover Gaming: Strategic acquisition expected to enhance role as a leading cross-platform global games company.
Direct to Consumer (DTC) Platform: Cultivating DTC platform to ensure seamless customer experience and scaling it across the SciPlay portfolio.
2025 EBITDA Target: On track to deliver a consolidated EBITDA financial target of $1.4 billion.
Free Cash Flow: Free cash flow for Q1 2025 was $111 million, a 19% increase compared to Q1 2024.
Revenue Growth: Consolidated revenue growth of 2% to $774 million in Q1 2025.
Adjusted NPATA: Adjusted NPATA for Q1 2025 was $117 million, up 11% year over year.
Game Sales Expectations: Expect game sales to be back half weighted with opportunities to commercialize content and hardware.
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Shareholder Return Plan
Share Repurchase Program: Completed an additional 17% of our authorized $1 billion program, having purchased 1.9 million shares totaling $166 million.
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Key Q&A
Q:How are tariffs impacting the business on the cost side and customer trends?
A:Tariffs are currently manageable, with the company finding ways to mitigate their impact through supply chain reconfiguration. Management sees a pathway to meet their $1.4 billion target despite the challenges.
Q:What is the status of U.S. Gaming Ops yield in the first quarter?
A:The yield was affected by weather-related issues, particularly in the Northeast, but is expected to normalize as discounts from the previous quarter have been reversed.
Q:How will the recent ruling regarding alternative payment methods affect the DTC strategy?
A:The ruling is seen as a positive development, allowing for increased direct-to-consumer efforts, with expectations to share targets at the upcoming Investor Day.
Q:What is happening with the international gaming business and the decline in installed base?
A:The decline is attributed to seasonality and tough comparisons from previous high sales periods, but management remains optimistic about future growth.
Q:What are the updates on the Australian listing?
A:Management is supportive of the Australian listing but is cautious about accelerating the initiative due to current market uncertainties.
Q:What is needed to achieve the $1.4 billion EBITDA target?
A:Management emphasizes the importance of maintaining gaming ops momentum, optimizing costs, and leveraging growth in direct-to-consumer and iGaming segments.
Q:How are current tariff policies expected to impact input costs?
A:Management has taken steps to mitigate tariff impacts by pulling forward inventory and reconfiguring the supply chain, expecting several quarters of unaffected inventory.
Q:How are customers reacting to tariff impacts?
A:Customer reactions vary, with some pulling forward orders and others pausing to assess the situation, indicating a mixed response.
Q:What are the expectations for revenue growth and margin expansion?
A:Management anticipates a gradual increase in revenue growth throughout the year, supported by strong performance in certain segments.
Q:What is the status of the carbon platform and its efficiencies?
A:The carbon platform is under development, with Grover serving as a key use case, but efficiencies from it have not yet been realized in the P&L.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on the timing for tariff impacts on input costs and the exact metrics needed to achieve the $1.4 billion EBITDA target, using vague language about 'multiple pathways' and 'line of sight' without concrete details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America gain
American GGR
Aristocrat mass
Aristocrat math
Australia variety
BetMGM game
CEO CFO
CEO President
CFO Treasurer
Cabinet example
Cabinet top
Canada market
DTC platform
DTC player
Day week
Director EVP
Dragon evidence
Grover
Hold Spin
New
Spin game
Upright Cabinet
economy
evidence Aristocrat
fundamental
game hardware
game launch
game mid
integration
party content
pool
product portfolio
service
share gain
shift
state
update
value game
website
LNW Transcript
Light & Wonder, Inc. (LNW) Q3 2025 Earnings Call Transcript
Positive11-8
The earnings report highlights strong financial performance with record iGaming revenue and significant year-over-year growth in net income and free cash flow. The Q&A section reveals positive sentiment, with management expecting a robust Q4 and maintaining guidance targets. Despite some timing issues and tariff impacts, the company is focused on strategic growth in iGaming, SciPlay, and international markets. The strong operational metrics and optimistic guidance suggest a positive stock price movement, especially given the lack of market cap data to assess volatility.
Light & Wonder, Inc. (LNW) Q2 2025 Earnings Call Transcript
Positive8-6
The earnings call summary presents a positive outlook: strong financial metrics, strategic growth initiatives, and a robust shareholder return plan. The Q&A section reveals favorable litigation updates and promising integration with Grover Gaming. The increased share buyback program and positive guidance adjustments further enhance sentiment. Despite minor concerns like revised NPATA guidance, the overall tone is optimistic, suggesting a positive stock price movement in the short term.
Light & Wonder, Inc. (NASDAQ:LNW) Q1 2025 Earnings Call Transcript
Positive5-8
The earnings call shows strong financial performance, with year-over-year increases in revenue, EBITDA, and free cash flow. The acquisition of Grover Gaming is expected to enhance growth, and management's optimistic guidance for future revenue and margin expansion is promising. The share repurchase program and positive developments in DTC growth further bolster sentiment. While there are some concerns about tariffs and international market conditions, management's strategies to mitigate these impacts are reassuring. Overall, the positive financial results and strategic initiatives suggest a likely positive stock price movement.
Light & Wonder, Inc. (LNW) Q1 2025 Earnings Call Transcript
Positive5-7
The earnings call summary reveals strong financial performance with revenue, EBITDA, and free cash flow growth. The acquisition of Grover Gaming and a robust share repurchase program are positive catalysts. The Q&A section indicates manageable challenges, with management providing optimistic guidance and strategies to mitigate risks. Despite some unclear responses, the overall sentiment is positive. The lack of market cap information prevents precise impact estimation, but based on available data, a positive stock price movement of 2% to 8% is expected over the next two weeks.
LNW Slides
LNW Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
