Core Insights - Light & Wonder (LNW) reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.08 per share, and showing a significant increase from $0.73 per share a year ago, resulting in an earnings surprise of 31.48% [1] - The company achieved revenues of $797 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.22% and up from $770 million year-over-year [2] - Light & Wonder's stock has increased approximately 16.5% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] Earnings Outlook - The future performance of Light & Wonder's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - Current consensus EPS estimate for the upcoming quarter is $1.26 on revenues of $814.57 million, and for the current fiscal year, it is $5.66 on revenues of $3.45 billion [7] Industry Context - The Gaming industry, to which Light & Wonder belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Business Transformation - Light & Wonder reported a significant transformation in its business after divesting its former Lottery and Sports Betting Businesses in 2022, which improved its balance sheet[29]. - The company operates in three segments: Gaming, SciPlay, and iGaming, focusing on high-quality products and services across these areas[28]. - The company aims to align with 12 of the 17 UN Sustainable Development Goals and became an official signatory of the UN Global Compact in 2024[71]. Gaming Segment Performance - The Gaming segment is expanding in approximately 171 international gaming jurisdictions, driven by new casino openings and existing casino expansions[32]. - The company is authorized to manufacture, sell, lease, or operate gaming products and services in approximately 459 jurisdictions worldwide, including 171 international gaming jurisdictions[82]. - The company’s gaming revenue is largely driven by players' disposable incomes, which may decline due to unfavorable economic conditions, affecting gaming activity levels[127]. SciPlay Developments - SciPlay launched a proprietary direct-to-consumer in-app purchase platform in 2023, aimed at enhancing player experience and reducing costs associated with third-party platforms[40]. - SciPlay's revenue is significantly generated from in-app purchases, with players often receiving free coins, chips, or cards upon game launch[39]. - The company's SciPlay business relies heavily on third-party platform providers, with a significant portion of revenue generated through platforms like Apple, Google, and Facebook[171]. iGaming Operations - The iGaming segment provides a comprehensive suite of digital gaming content, with revenue primarily from casino-style games available through various platforms[43]. - The company has launched its iGaming operations in seven states in the U.S., with ongoing discussions in several other states regarding potential regulations[89]. - The company’s iGaming business is subject to intense competition, particularly from operators with greater financial resources, which may hinder its ability to capture market share[149]. Financial Management - The company emphasizes disciplined capital allocation, focusing on returning capital to shareholders while maintaining financial strength[30]. - As of December 31, 2024, the company had total indebtedness of $3.9 billion and total available liquidity of $936 million, including $740 million of undrawn availability under the LNWI Revolver[180]. - The company has authorized a share repurchase program of up to $1.0 billion, which may not enhance long-term stockholder value and could be suspended or discontinued at any time[179]. Employee Engagement and Diversity - The company achieved a 93% employee participation rate in the annual Global Engagement Survey for both 2024 and 2023, indicating strong engagement[66]. - The company has a Diversity, Equity & Inclusion strategy established in 2020, with a DEI Council that includes representation from the Board of Directors[64]. - The company provides a competitive benefits program, including medical, dental, vision plans, and a 401(k) plan, to inspire innovation and improve performance[69]. Research and Development - Light & Wonder's R&D personnel are strategically located across multiple global sites, including Las Vegas, Chicago, and Bangalore, to enhance product development[46]. - The company is investing significantly in research and development to create new technologies and products, although success is not guaranteed[110]. - The company has invested significantly in R&D, but there is no assurance that these investments will lead to commercially viable products, which could negatively affect margins and financial condition[154]. Regulatory Environment - The company is subject to various gaming regulations across different jurisdictions, which may impact its operations and financial results[93]. - The U.K. Government is reviewing the Gambling Act 2005, with proposed reforms including stake limits for online slots expected to be implemented by Q2 2025[90]. - The company is monitoring international regulatory changes, with increasing scrutiny on responsible gambling and affordability checks in various jurisdictions[91]. Competition and Market Risks - The company competes with major players in the gaming industry, including IGT and Aristocrat, across all its business segments[34][44]. - The company faces significant competition in the gaming industry, competing against both traditional and illegal operators, which may impact its market share and financial performance[139]. - The company faces risks from ownership changes and consolidation in the gaming industry, which could negatively affect customer spending and order volumes[176]. Economic Conditions - The company faces risks related to economic conditions, including inflation and decreased discretionary spending, which could adversely affect its financial performance[106]. - Unfavorable economic conditions, including inflation and rising interest rates, have negatively impacted the company's business, results of operations, cash flows, and financial condition[126]. - The company may incur additional impairment charges and restructuring costs, which are unpredictable and could adversely affect financial performance[120]. Supply Chain and Inventory Management - The company actively manages supply chain risks by specifying alternative components and maintaining safety stock to meet customer demand[58]. - The company monitors potential supply chain disruptions and may need to increase inventory positions to mitigate delays, which could impact operations and gross margin[132]. - The company recorded inventory charges of $14 million, $14 million, and $5 million for the years ended December 31, 2024, 2023, and 2022, respectively, indicating fluctuations in demand and product strategy reassessment[117]. Cybersecurity and Technology Risks - The company’s success depends on the security and integrity of its systems, with potential cybersecurity breaches posing risks to its operations[201][205]. - Cybersecurity threats pose significant risks, with potential costs for remediation and interruptions that could materially affect business operations[220]. - The company anticipates increased use of AI technology, which could impact operations if failures occur within these systems[217]. Acquisitions and Strategic Initiatives - The company has entered into a purchase agreement to acquire Grover Gaming for an upfront consideration of $850 million, with potential additional payments of up to $200 million based on revenue and business expansion metrics[164]. - The proposed Grover Charitable Gaming acquisition presents risks including potential regulatory approval failures and unexpected costs, which could adversely affect the company's financial condition and stock price[165]. - The company’s ability to successfully integrate acquisitions, such as the recent SciPlay merger, is critical for realizing expected cost synergies and benefits[162].

Financial Performance - Record full year consolidated revenue of $3.2 billion, increasing 10% year-over-year, driven by strong performance across all businesses [4] - Fourth quarter consolidated revenue was $797 million, a 4% increase year-over-year, marking the 15th consecutive quarter of growth [17] - Consolidated revenue reached a record $3.2 billion, a 10% increase from $2.9 billion in the prior year, driven by strong performance across all business segments [23] - Total revenue for Q4 2024 reached $797 million, a 3.5% increase from $770 million in Q4 2023 [39] - Total revenue for Q4 2024 reached $515 million, a 3.8% increase from $496 million in Q4 2023 [55] Income and Profitability - Operating income grew by 29%, with consolidated AEBITDA increasing by 11% and adjusted NPATA growing by 24% [4] - Net income for the fourth quarter increased to $107 million from $67 million in the prior year, with net income attributable to L&W per share rising 64% to $1.20 [17] - Net income increased to $336 million, up from $180 million in the prior year, with net income per share rising by 110% to $3.68 [23] - Net income attributable to Light & Wonder, Inc. was $107 million in Q4 2024, compared to $67 million in Q4 2023, representing a 59.7% increase [39] - Operating income for the year ended December 31, 2024, was $668 million, up from $518 million in 2023, reflecting a 28.9% growth [39] Shareholder Returns - Returned $462 million to shareholders through share repurchases in 2024, completing approximately 29% of the new $1 billion share repurchase plan [4] Debt and Leverage - Principal face value of debt outstanding was $3.9 billion, with a net debt leverage ratio of 3.0x, a decrease from 3.1x in the previous year [8] - Long-term debt, excluding current portion, was $3,847 million as of December 31, 2024, slightly down from $3,852 million in 2023 [41] - Net debt as of December 31, 2024, was $3.713 billion, compared to $3.492 billion as of December 31, 2023, reflecting a 6.3% increase [60] - The net debt leverage ratio improved to 3.0 as of December 31, 2024, down from 3.1 a year earlier [60] Revenue Segments - Gaming revenue increased to $2.1 billion, up 12%, with gaming machine sales growing 22% due to market share gains in North America and Australia [4] - SciPlay revenue rose to $821 million, up 6%, expanding the direct-to-consumer high margin revenue channel to approximately 11% of total SciPlay revenue [4] - Gaming revenue increased to $515 million, up 4% year-over-year, driven by global gaming systems growth of 24% and a 9% increase in the North American installed base [26] - iGaming revenue grew by 11% to $78 million, with wagers processed totaling $24.0 billion during the quarter [26] Cash Flow and Capital Expenditures - Free cash flow increased to $318 million from $291 million in the prior year, reflecting strong earnings despite changes in working capital [23] - Capital expenditures were $70 million in the fourth quarter, up from $60 million in the prior year, due to ongoing investments in gaming operations [26] - Cash flows from operating activities for the year ended December 31, 2024, totaled $632 million, compared to $590 million in 2023, indicating a 7.1% increase [43] Strategic Initiatives - Announced strategic acquisition of Grover Gaming's charitable business for $850 million, expected to close in Q2 2025 [8] Non-GAAP Financial Measures - Management utilizes non-GAAP financial measures such as Consolidated AEBITDA, Adjusted NPATA, and Free cash flow to assess the company's performance and financial condition [63][66][68] - Consolidated AEBITDA is a key performance indicator that helps monitor operational performance and is reconciled to net income, providing insights into ongoing underlying performance [71][72] - Adjusted NPATA is widely used for valuation and performance measurement, eliminating effects of amortization, restructuring, and other non-recurring items [66][69][75] - Free cash flow is calculated as net cash from operating activities minus capital expenditures and is crucial for understanding liquidity and debt servicing capabilities [77][70] - The net debt leverage ratio is calculated as net debt divided by Consolidated AEBITDA, providing insights into the company's leverage position [78] - Adjusted NPATA per share (diluted) is presented to give investors a clearer view of performance on a per-share basis, adjusted for various non-recurring items [76] - Consolidated AEBITDA margin is expressed as a percentage of consolidated revenue, offering a perspective on profitability relative to revenue [73] - Management believes these non-GAAP measures provide valuable insights that are integral to financial reporting and strategic planning [68] - The company does not provide forward-looking quantitative reconciliations for targeted non-GAAP measures due to uncertainties and factors beyond its control [72][78]

Group 1: Company Overview - Light & Wonder (LNW) shares increased by 4.3% to close at $105.99, with notable trading volume compared to typical sessions, and an overall gain of 11.5% over the past four weeks [1] - LNW has agreed to acquire Grover Gaming's charitable gaming assets for $850 million in cash, positioning the company to capitalize on the expected growth in the charitable gaming space [2][3] - The acquisition aligns with LNW's cross-platform strategy and is anticipated to be accretive to profitability, with expectations of high single-digit adjusted NPATA in the first full calendar year post-acquisition [3] Group 2: Financial Performance - LNW is projected to report quarterly earnings of $1.08 per share, reflecting a year-over-year increase of 48%, with revenues expected to reach $795.27 million, up 3.3% from the previous year [4] - The consensus EPS estimate for LNW has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [5] Group 3: Industry Context - LNW operates within the Zacks Gaming industry, where another company, Century Casinos (CNTY), experienced a 2.2% decline in its stock price, with a consensus EPS estimate change of -42.3% over the past month [5][6]

Core Insights - Analysts project that Light & Wonder (LNW) will report quarterly earnings of $1.08 per share, reflecting a 48% year-over-year increase, with revenues expected to reach $795.27 million, a 3.3% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a collective reevaluation by analysts [1][2] Revenue Estimates - Revenue from SciPlay is projected to be $220.31 million, representing an 8% year-over-year increase [4] - Revenue from Gaming is expected to reach $503.14 million, indicating a 1.4% increase from the previous year [4] - Revenue from iGaming is forecasted at $76.07 million, reflecting an 8.7% increase from the prior-year quarter [4] AEBITDA Estimates - AEBITDA for Gaming is estimated at $252.76 million, compared to $245 million from the year-ago period [5] - AEBITDA for iGaming is projected to be $24.96 million, up from $23 million a year ago [5] - AEBITDA for SciPlay is expected to reach $73.17 million, compared to $69 million from the previous year [5] Stock Performance - Light & Wonder shares have shown a return of +16.7% over the past month, outperforming the Zacks S&P 500 composite, which increased by +2.6% [5] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [5]

Core Viewpoint - Light & Wonder, Inc. (LNW) has entered into a definitive agreement to acquire Grover Gaming's charitable gaming assets for $850 million in cash, with an additional potential earn-out of up to $200 million over four years, funded through a mix of debt financing and existing cash [1][2]. Company Summary - Grover Charitable Gaming operates approximately 10,000 leased electronic pull-tab units across five U.S. states, generating revenues of $135 million and adjusted EBITDA of $111 million in fiscal 2024 [3]. - The acquisition aligns with LNW's strategy to expand its footprint in high-return markets and is expected to be accretive to profitability, with anticipated high single-digit adjusted NPATA in the first full calendar year post-acquisition [5]. Industry Summary - The charitable gaming space is projected to grow significantly in the coming years, providing LNW with an opportunity to leverage Grover's strong customer relationships and market presence [4]. - LNW's holistic growth strategy focuses on extending its reach in digital markets and high-return sectors, which is reinforced by this acquisition [5]. Financial Outlook - LNW has reiterated its Consolidated AEBITDA target of $1.4 billion for 2025, supported by solid market traction across its businesses [2]. - The company expects to maintain a net debt leverage ratio within the target range of 2.5x to 3.5x following the acquisition [1]. Historical Context - Strategic acquisitions have been integral to LNW's growth, with previous acquisitions enhancing its capabilities in the global gaming industry [6]. - Notable past acquisitions include Bally Technologies and WMS Industries, which have expanded LNW's offerings in computerized systems and services [6]. Stock Performance - LNW's stock has increased by 20.2% over the past year, compared to the industry's growth of 23.9% [8].

Group 1: Company Overview - Light & Wonder (LNW) shares increased by 11% to close at $97.67, with notable trading volume compared to typical sessions, and a 3.2% gain over the past four weeks [1] - The company is experiencing solid sales growth in gaming machines and a healthy performance in the social casino business, aiming to be a leading cross-platform global games company [2] - Management emphasizes automation, standardization, AI tools, and process development to enhance organizational efficiency and scalability globally [2] Group 2: Financial Performance - Light & Wonder is expected to report quarterly earnings of $1.08 per share, reflecting a year-over-year increase of 48%, with revenues projected at $795.27 million, up 3.3% from the previous year [3] - The consensus EPS estimate for the quarter has been revised 4.6% higher in the last 30 days, indicating a positive trend that typically leads to price appreciation [4] Group 3: Industry Context - Light & Wonder belongs to the Zacks Gaming industry, which includes other companies like Churchill Downs (CHDN), that closed 0.3% higher at $122.43, with a -3.8% return over the past month [4] - Churchill Downs has an unchanged consensus EPS estimate of $0.93 for the upcoming report, representing an 8.1% increase from the previous year [5]

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A month has gone by since the last earnings report for Light & Wonder (LNW) . Shares have added about 1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Light & Wonder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Light & Wonder Beats Q3 Earnings Estimates on ...

Investors can contact the law firm at no cost to learn more about recovering their losses ​LOS ANGELES, Nov. 13, 2024 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Light & Wonder, Inc. (“Light & Wonder” or “the Company”) (NASDAQ: LNW) investors that the firm has initiated an investigation into possible securities fraud and may file a class action on behalf of investors. Light & Wonder investors that lost money on their investment are encouraged to contact Lesley Portnoy, Esq. Investors are encouraged to ...