GGRAsia – Gaming, digital pushes L&W 3Q revenue up 20pct y-o-y

Gaming, digital pushes L&W 3Q revenue up 20pct y-o-y

Nov 10, 2022 Newsdesk Industry Talk, Latest News

Casino equipment and online games provider Light & Wonder Inc (L&W) reported revenue of US$648 million for the third quarter, up 20.2 percent from a year earlier. Such growth was driven by “continued strong momentum” across the group’s gaming and iGaming segments, and “record revenue” at digital business SciPlay.

Based just on the group’s continued operations, Light & Wonder reported net income of US$20 million in the three months to September 30, compared to a profit of US$100 million in the prior-year period.

“Net income decreased as prior-year net income benefitted from a US$181-million income tax benefit,” said the firm in a Wednesday press release.

Nonetheless the group had managed to cushion some of the effect on the current balance sheet thanks to “higher revenue and operating income, as well as lower interest expense in the current period,” it added.

The company had reported a net loss of US$150 million from its continued operations in the second quarter this year.

In the third quarter, Light & Wonder posted a net profit attributable to its shareholders of US$328 million, including US$315 million from discontinued operations. The period to September 30 included a pre-tax gain of nearly US$362 million on the sale of the group’s sports betting business, OpenBet, to Endeavor Group Holdings Inc. The deal, completed in September, involved total gross proceeds of approximately US$800 million.

The company’s quarterly consolidated adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) from continuing operations were up 15.8 percent year-on-year, at US$235 million. The company said the increase was “primarily driven” by growth in its gaming business.

Third-quarter gaming revenue increased by 23.6 percent year-on-year, to US$419 million. Light & Wonder said such growth “driven by robust 47 percent growth in gaming machine sales coupled with continued growth momentum in gaming operations”. Quarterly revenue from gaming machine sales was US$140 million, while revenue from gaming operations rose by 6.6 percent year-on-year, to US$161 million.

The gaming segment’s adjusted EBITDA was US$202 million, up 17.4 percent from the prior-year period.

The company said it sold 7,259 gaming machine units in the three months to September 30, compared to 5,003 a year earlier. Such shipments included 2,859 units sold in the international market, including Asia Pacific, up from 1,780 machines in the prior-year quarter.

SciPlay revenue increased 16.3 percent year-on-year to US$171 million, “achieving a quarterly revenue record,” supported by the “core social casino business, stated Light & Wonder. Revenue in the iGaming segment rose by 9.4 percent year-on-year, to US$58 million.

Wednesday’s release quoted Matt Wilson, recently appointed president and chief executive of Light & Wonder, as saying: “The results this quarter reflect the tangible progress we are making strategically, operationally, and financially as we delivered strong double-digit topline growth and saw clear momentum across all of our businesses.”

He added: “With the sale of the sports betting business, we have rapidly delivered on our promise to transform our business and streamline our organisation.”

The company had debt outstanding of US$3.87 billion at the end of September, which translated to a net debt leverage ratio of 3.1 times, “squarely in the targeted range,” said in prepared remarks Connie James, the firm’s chief financial officer.

“With this significant milestone, we are now advancing our capital allocation priorities of returning capital to shareholders and investing in growth,” she added.

In October, Light & Wonder acquired for cash most of the assets of House Advantage LLC, described as “a leading loyalty and marketing software and technology provider”. Light & Wonder said the acquisition would enhance its system-management offer for land-based and online gaming operators.