Casino equipment and online games provider Light & Wonder Inc (L&W) reported revenue of US$731 million for the second quarter of 2023, up 19.8 percent from the US$610 million a year earlier, and up 9.1 percent from first-quarter 2023’s US$670 million.
Second-quarter net income was US$5 million, compared to a US$150-million loss in the prior-year quarter. First-quarter 2023 net income had been US$27 million. The company however reported a net loss attributable to shareholders of US$1 million for the three months to June 30. No reference was made to the topic of dividends.
The figures were issued in the United States on Tuesday. The same day, the group also confirmed it had agreed to purchase the circa 17 percent equity interest in the digital games business SciPlay Corp that it did not already own.
SciPlay’s shareholders will receive US$22.95 for each share of SciPlay class A common stock they own – subject to certain exceptions – in an all-cash transaction.
A separate press release said the companies expect the transaction to close during the fourth quarter of 2023. SciPlay will cease to be publicly traded and will become a wholly owned subsidiary of Light & Wonder.
Light & Wonder said in its second-quarter earnings announcement: “The company believes that this transaction will enable seamless collaboration with SciPlay that will add further momentum to the company’s already robust cross-platform strategy, provide flexibility for use of SciPlay cash flows for investments across the enterprise, and facilitate long-term margin enhancement opportunities via synergies, all of which are expected to increase shareholder value.”
Light & Wonder’s second-quarter consolidated adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$281 million, up 32.5 percent year-on-year, and up 12.9 percent quarter-on-quarter.
Matt Wilson, president and chief executive of Light & Wonder, was cited in the results announcement as saying: “Our reported numbers continue to validate the investments that we’ve made in our business and demonstrate the significant progress we are making towards our long-term targets.”
Don Carducci, an analyst at JP Morgan Securities Australia Ltd said in a Wednesday note, that the second-quarter data for Light & Wonder represented a “strong result… coming well ahead of consensus estimates across both revenue and EBITDA”.
Gaming segment, machine revenue rise
Light & Wonder’s second-quarter gaming-segment revenue stood at US$471 million, up 20.8 percent year-on-year, and up 12.4 percent from the first quarter’s US$419 million. The segment generated adjusted EBITDA of US$233 million, up 30.2 percent year-on-year, and 13.1-percent higher from the first quarter.
The company said it sold 9,150 gaming machine units in the three months to June 30, an increase of 41.0 percent compared to the 6,488 a year earlier, and an increase of 19.2 percent on the 7,678 in the first three months of 2023.
The second-quarter machine shipments included 4,130 units sold in the international market, including Asia Pacific, up 66.6 percent year-on-year, and a rise of 14.1 percent on the 3,621 machines in the first quarter.
SciPlay generated US$190 million in second-quarter revenue, up 18.8 percent year-on-year, and up 2.2 percent sequentially. SciPlay’s quarterly adjusted EBITDA was US$59 million, up 43.9 percent year-on-year, and up 9.3 percent quarter-on-quarter.
The group’s iGaming segment generated revenue of US$70 million in the second quarter, up from US$60 million a year ago. Segmental adjusted EBITDA stood at US$24 million, compared to US$21 million a year earlier.
Light & Wonder stated its net debt stood at just under US$3.02 billion as of June 30, up from US$3.00 billion in the quarter to March 31. The company’s net debt leverage ratio as of June 30 was 2.9 times, compared to 3.3 times as of December 31.
CEO Mr Wilson stated: “Year to date, we delivered double-digit top and bottom line growth across all three of our businesses, generated strong cash flows and reduced leverage, resulting in an exceptional second quarter.”
The group also confirmed that shares for its secondary listing on the Australian Securities Exchange had started trading on May 22 this year.
In its Tuesday filing, Light & Wonder said it believed that listing would “create substantial benefits for L&W and its shareholders,” including “enhancing the company’s profile in Australia, one of the leading markets for L&W’s gaming business”.
It would also help in “providing the company access to new long-term Australian institutional investors that complement our strong existing base of shareholders”.
