LAS VEGAS, NV – Light & Wonder (L&W) has reported results for the first quarter ended March 31, 2025.
The company achieved a 16th consecutive quarter of year-over-year consolidated revenue growth, expanding margins across all three of their businesses and generating strong cash flow, while continuing to execute on their robust content roadmap and cross-platform strategy, and remain committed to $1.4 billion 2025 consolidated AEBITDA target (pre-Grover transaction). The company also repurchased approximately 1.9 million shares of common stock at an aggregate cost of $166 million during the three months ended March 31, 2025.
- Gaming revenue increased to $495 million, up 4% compared to the prior year period, primarily driven by growth across all lines of business, including 9% growth in table products and 5% growth in both gaming systems and saming operations. The growth was fueled by the success of their diversified portfolio of game franchises and gaming solutions, resulting in Gaming Operations North American premium installed base growing for 19 consecutive quarters, 30% growth year-over-year in North American unit shipments, and maintaining #1 ship share in Australia. AEBITDA increased by 9% on revenue growth and margin expansion of 200 basis points.
- SciPlay revenue was $202 million, a decrease of 2% compared to the prior year period, but continued to outpace the social casino market with strong payer metrics. AEBITDA increased 3%, while margin expanded 200 basis points, driven by their growing direct-to-consumer platform, while they continued to invest in high return marketing initiatives to fuel future growth. The company’s social casino business continued to deliver consistently high player engagement and monetization, with ARPDAU(3) increasing by 5% to $1.06.
- iGaming revenue increased 4% to $77 million, and AEBITDA increased 8% with margin expanding by 100 basis points, primarily reflecting continued momentum in the U.S. and expansion of their partner network.
“Our R&D investment, vast array of product offerings and comprehensive content strategy continue to deliver success in game deployment and franchise expansions,” said Matt Wilson, President and CEO of Light & Wonder. “We continue to see our omnichannel strategy prosper with enhanced game development and performance fueling our existing businesses, and further opportunity to extend this strategy with the pending Grover charitable gaming acquisition. We remain confident in the various avenues of growth that we see for 2025 with continued execution on our robust product roadmap driving performance across the business. We are committed to executing off the strong foundation of world class talent and game portfolio that we have built for long-term success.”
“This quarter is a further testament to our commitment to value creation as we generated strong cash flow coupled with another meaningful quarter of share buyback,” said Oliver Chow, CFO of Light & Wonder. “Our solid performance continues to be underpinned by a focus on streamlining and optimizing our business to enhance margins as reflected in the quarter across the three business units and corporate functions. The initiatives and processes that we have in place enable us to remain nimble and adaptable to a dynamic environment and positions us well to be a sustainable compounder of growth well into the future.”
LEVERAGE, CAPITAL ALLOCATION AND BUSINESS UPDATE
- Principal face value of debt outstanding was $3.9 billion, translating to a net debt leverage ratio of 0x as of March 31, 2025, remaining within their targeted net debt leverage ratio range of 2.5x to 3.5x, while they accelerated the pace of their share repurchases capitalizing on the market dislocation and consistent with their capital allocation strategy.
- Returned $166 million of capital to shareholders through the repurchase of approximately 9 million shares of L&W common stock during the quarter.
- Pending strategic acquisition of Grover Gaming’s charitable gaming business – On February 18, 2025, the company announced the pending acquisition for an upfront consideration of $850 million, subject to customary purchase price adjustments. Grover Gaming is a leading provider of electronic pull-tabs distributed over five fast-growing U.S. states: North Dakota, Ohio, Virginia, Kentucky and New Hampshire. The transaction is expected to close during the second quarter of 2025, subject to required regulatory and other approvals and customary closing conditions. L&W’s lead arranger has obtained commitments, subject to customary closing conditions, for a new three-year $800 million Term Loan A credit facility at leverage-based pricing expected to be in line with our current revolving credit facility, the proceeds of which will be used for the financing of this pending acquisition.
- Impact of recent trade tariffs – In April of 2025, the U.S. government and many foreign countries imposed a series of new trade tariffs. These tariffs place additional duties on imports, and the company currently sources a portion of the raw materials and components for their gaming business from China and across Asia. L&W has evaluated various mitigation strategies, including but not limited to, supplier diversification, adjusting supply chain operations, supplier pricing negotiations and cost control initiatives, among other measures. Over the past several quarters, through margin enhancement initiatives, they have successfully executed meaningful operational efficiencies. While they expect recent tariffs and trade policies to create incremental cost pressures in the near term, their realized and ongoing operational efficiency initiatives coupled with other measures are expected to mitigate these effects. The company remains on track to deliver their 2025 consolidated AEBITDA target of $1.4 billion (pre-Grover transaction) and associated adjusted NPATA targeted range.
- Dragon Train litigation update – The company’s external experts have now completed a review of all hold-and-spin games released from 2015 to the present to determine whether any of these games present issues with respect to Aristocrat math values similar to those identified with Dragon Train and Jewel of the Dragon, both of which were hold-and-spin games. Their experts found no evidence that Aristocrat math values were used in any of these games.
- Hosting an investor day on May 20th in New York City to provide an update on our strategy and progress on key initiatives.
