Gaming sales in Asia, Australia boost L&W 1Q revenue

May 09, 2024 Newsdesk Latest News, Top of the deck, World  

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Casino equipment and online games provider Light & Wonder Inc (L&W) reported first-quarter revenue of US$756 million, up 12.8 percent from a year earlier. The latest quarterly revenue was down 1.8 percent sequentially, according to a Wednesday press release.

The company said the increase in revenue was “driven by continued double-digit revenue growth” across all its businesses, “resulting in robust earnings growth”.

“We started 2024 on a strong note, delivering a 12th consecutive quarter of year-over-year consolidated revenue growth and generating strong cash flow, while continuing to execute on our robust content roadmap and cross-platform strategy,” stated Light & Wonder.

The firm saw its first-quarter net income attributable to shareholders rise 272.7 percent year-on-year, to US$82 million. Judged sequentially, such net income was up 24.2 percent from the final quarter of 2023.

The group’s first-quarter adjusted consolidated adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) were up 12.9 percent year-on-year, to US$281 million.

The group has three main segments: land-based gaming; the digital games unit SciPlay; and iGaming.

Wednesday’s announcement quoted Matt Wilson, Light & Wonder’s president and chief executive, as saying that the group’s “strong momentum continued into 2024,” with its global product offerings “driving game sales growth in North American adjacent markets and in international markets led by Australia and Asia”.

“The performance in the quarter validates our execution plan and we expect growth to be further enhanced by key hardware and content launches in both our land-based and digital markets throughout the year,” stated the CEO.

JP Morgan said in a Thursday note that Light & Wonder’s first-quarter results were ahead of market consensus, with the “beat originated from land-based gaming, with a slight miss in SciPlay a result of softness in average revenue per daily active user”.

“Gaming machine sales are focused around Australia and the outlook from here is clear as … installations [of the Dragon Train slots] began in late March” in the U.S. market, wrote analysts Don Carducci, Michael James and Dylan Adrian.

“Subsequent quarters’ performance likely to show strong rollout of this family of games with continued momentum in Australia,” they added.

Light & Wonder shipped 9,696 new gaming machine units in the three months to March 31, up 26.3 percent from a year earlier. First-quarter 2024 shipments included 5,259 units sold in the international market, including Asia Pacific, up 45.2 percent from the prior-year quarter.

The value of gaming machine sales globally was flat quarter-on-quarter, but up 29.7 percent from the prior-year period, at US$205 million.

Aggregate revenue in the gaming segment – including gaming operations – stood at US$476 million, up 13.6 percent from a year earlier. The firm said the increase was “primarily driven by global gaming machine sales growth … coupled with growth across gaming operations and gaming systems”.

Gaming segment adjusted EBITDA were up 12.6 percent year-on-year, to US$232 million.

SciPlay generated US$206 million in first-quarter revenue, up 10.8 percent year-on-year. For the opening quarter of 2024, Light & Wonder’s iGaming segment generated revenue of US$74 million, a rise of 13.8 percent year-on-year, “primarily reflecting continued momentum in the U.S. and international markets”.

The firm stated its net debt leverage ratio declined to 3.0x from 3.1x at the end of 2023, which meant it was within the group’s targeted net debt leverage ratio range of 2.5x to 3.5x. Light & Wonder had net debt of just over US$3.47 billion as of March 31.

According to JP Morgan, Light & Wonder’s management reiterated on Wednesday their financial year 2025 annual EBITDA target of US$1.4 billion, “implying the market should expect above 10 percent year-on-year quarterly growth”.

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