Executive Summary & Strategic Highlights [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Light & Wonder reported Q2 2025 earnings growth and margin expansion across segments, with consolidated revenue slightly down but net income and AEBITDA up Q2 2025 Consolidated Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Consolidated Revenue | $809M | $818M | (1)% | | Net Income | $95M | $82M | 16% | | Consolidated AEBITDA | $352M | $330M | 7% | - Macroeconomic uncertainty led to cautious purchasing behavior and delayed capital expenditure among customers, impacting game sales timing[4](index=4&type=chunk) - Gaming business sold over **9,000 new units** globally, maintaining strong market share momentum[4](index=4&type=chunk) - North American premium installed base increased for the **20th consecutive quarter**, adding **845 units sequentially** and over **2,700 units year-over-year**[2](index=2&type=chunk) - iGaming business delivered **quarterly record revenue**[4](index=4&type=chunk) [Strategic Initiatives & Capital Allocation](index=1&type=section&id=Strategic%20Initiatives%20%26%20Capital%20Allocation) Light & Wonder advances strategic initiatives, including a sole ASX listing, expanded share repurchases, and successful Grover integration [ASX Listing & Share Repurchases](index=1&type=section&id=ASX%20Listing%20%26%20Share%20Repurchases) - L&W Board approved a sole primary listing on the ASX, with delisting from Nasdaq expected by end of November 2025, reflecting strategic alignment with long-term growth plans and shareholder base[2](index=2&type=chunk)[3](index=3&type=chunk)[11](index=11&type=chunk) - Returned **$266 million** of capital to shareholders through share repurchases during the first half of 2025, completing approximately **55%** of the previously authorized **$1.0 billion** plan[3](index=3&type=chunk)[4](index=4&type=chunk) - Approved an additional **$500 million** for share repurchases, increasing the total program to **$1.5 billion**, demonstrating confidence in the company's outlook and value creation[3](index=3&type=chunk)[4](index=4&type=chunk)[11](index=11&type=chunk) - Principal face value of debt outstanding was **$4.9 billion**, resulting in a net debt leverage ratio of **3.7x** as of June 30, 2025, or a combined net debt leverage ratio of **3.4x**, remaining within the target range of **2.5x to 3.5x**[11](index=11&type=chunk) [Grover Acquisition](index=1&type=section&id=Grover%20Acquisition) - Completed the acquisition of Grover Gaming's charitable gaming business on May 16, 2025, for an upfront consideration of **$850 million**[2](index=2&type=chunk)[4](index=4&type=chunk)[15](index=15&type=chunk) - Grover is a leading provider of electronic pull-tabs across five U.S. states, with its financial results reported as part of the Gaming segment[15](index=15&type=chunk) - Integration of Grover is progressing ahead of schedule, with over **600 active units** added since the acquisition announcement[2](index=2&type=chunk)[4](index=4&type=chunk) - The acquisition was financed by borrowing **$800 million** under a new term loan 'A' facility[15](index=15&type=chunk) [FY 2025 Financial Outlook](index=1&type=section&id=FY%202025%20Financial%20Outlook) FY 2025 Financial Guidance (Inclusive of Grover) | Metric | Guidance Range | | :--------------------- | :------------- | | Consolidated AEBITDA | $1.43B - $1.47B | | Adjusted NPATA | $550M - $575M | - Expected earnings to be second half weighted, with Q3 2025 year-over-year Consolidated AEBITDA growth in the **low double-digits** and accelerated growth in Q4, primarily driven by international game sales[15](index=15&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasizes R&D, strong game performance, Grover integration, and the strategic benefits of a sole ASX listing - CEO Matt Wilson affirmed commitment to R&D investment to proliferate high-performing content and expand the North American installed base, while praising the ahead-of-schedule Grover integration and the strategic move to a sole ASX listing[8](index=8&type=chunk) - CFO Oliver Chow underscored the benefits of a diversified business model, disciplined execution leading to meaningful margin expansion, continued investment across the portfolio, and adherence to the share buy-back program while maintaining the targeted net debt leverage ratio[8](index=8&type=chunk) - Board Chair Jamie Odell stated that the move to a sole primary ASX listing, where equity trading already accounts for approximately **37%** of total equity, is in the best long-term interests of shareholders, offering investment in a global growth company with strong fundamentals and recurring revenues[8](index=8&type=chunk) Financial Performance Highlights [Summary Financial Results (Q2 & H1 2025)](index=3&type=section&id=Summary%20Financial%20Results%20(Q2%20%26%20H1%202025)) Summary financial results for Q2 and H1 2025 show mixed revenue but consistent growth in net income and AEBITDA, with increased debt Summary Financial Results (Q2 & H1 2025) | ($ in millions except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $809 | $818 | $1,582 | $1,575 | | Net income | 95 | 82 | 177 | 164 | | Net income per share – Diluted | 1.11 | 0.90 | 2.05 | 1.78 | | Net cash provided by operating activities | 106 | 141 | 291 | 312 | | Capital expenditures | 78 | 86 | 139 | 153 | | Consolidated AEBITDA | $352 | $330 | $663 | $610 | | Adjusted NPATA | 135 | 130 | 252 | 234 | | Adjusted NPATA per share – Diluted (or EPSa) | 1.58 | 1.42 | 2.93 | 2.54 | | Free cash flow | 29 | 70 | 140 | 162 | | Cash and cash equivalents (As of period end) | $136 | N/A | $136 | N/A | | Total debt (As of period end) | 4,856 | N/A | 4,856 | N/A | [Second Quarter 2025 Financial Highlights](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Q2 2025 consolidated revenue slightly decreased, but net income and AEBITDA increased due to lower costs and margin expansion Q2 2025 Revenue and AEBITDA by Segment | Segment | Revenue 2025 ($M) | Revenue 2024 ($M) | Revenue Change ($M) | Revenue Change (%) | AEBITDA 2025 ($M) | AEBITDA 2024 ($M) | AEBITDA Change ($M) | AEBITDA Change (%) | AEBITDA Margin 2025 (%) | AEBITDA Margin 2024 (%) | PP Change | | :-------- | :---------------- | :---------------- | :------------------ | :----------------- | :---------------- | :---------------- | :------------------ | :------------------ | :---------------------- | :---------------------- | :-------- | | Gaming | $528 | $539 | $(11) | (2)% | $280 | $272 | $8 | 3% | 53% | 50% | 3 | | SciPlay | $200 | $205 | $(5) | (2)% | $74 | $70 | $4 | 6% | 37% | 34% | 3 | | iGaming | $81 | $74 | $7 | 9% | $28 | $24 | $4 | 17% | 35% | 32% | 3 | | Total | $809 | $818 | $(9) | (1)% | $352 | $330 | $22 | 7% | 44% | 40% | 4 | - Net income increased **16% to $95 million**, driven by lower cost of revenue, reduced operating expenses, and lower restructuring costs, despite a decrease in consolidated revenue[21](index=21&type=chunk) - Net income per share increased by **23% to $1.11**[21](index=21&type=chunk) - Adjusted NPATA increased **4% to $135 million**, and Adjusted NPATA per share (EPSa) increased **11% to $1.58**[21](index=21&type=chunk) - Net cash provided by operating activities was **$106 million** (down from **$141 million** YoY), primarily impacted by **$73 million** in legal settlement payments[

Core Viewpoint - Light & Wonder (LNW) has experienced a significant downtrend, with an 11.6% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 typically indicating that a stock is oversold [2]. - LNW's current RSI reading is 26.89, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound as the stock seeks to return to its previous equilibrium [5]. Group 2: Fundamental Analysis - Analysts covering LNW have shown strong consensus in raising earnings estimates, with a 2.8% increase in the consensus EPS estimate over the last 30 days, which often correlates with near-term price appreciation [7]. - LNW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [8].

Core Viewpoint - Light & Wonder (LNW) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with earnings expected at $1.44 per share, reflecting a 1.4% increase, and revenues projected at $859.95 million, up 5.1% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for August 6, and the stock may experience upward movement if the reported figures exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 3.14% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Light & Wonder is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.39%, indicating a bearish outlook from analysts [12]. - Despite the negative Earnings ESP, the stock holds a Zacks Rank of 2, which complicates the prediction of an earnings beat [12]. Historical Performance - Light & Wonder has a history of beating consensus EPS estimates, having done so in the last four quarters, including a surprise of +15.38% in the most recent quarter where actual earnings were $1.35 per share against an expected $1.17 [13][14]. Conclusion - While Light & Wonder does not appear to be a strong candidate for an earnings beat based on current estimates, investors are advised to consider other influencing factors before making investment decisions [17].

Core Insights - Light & Wonder (LNW) is currently viewed as a stronger investment option compared to DraftKings (DKNG) for value investors seeking undervalued stocks [1][3][7] Valuation Metrics - LNW has a forward P/E ratio of 17.65, significantly lower than DKNG's forward P/E of 33.50, indicating LNW may be undervalued [5] - The PEG ratio for LNW is 0.63, while DKNG's PEG ratio is 0.64, suggesting LNW has a more favorable growth outlook relative to its valuation [5] - LNW's P/B ratio stands at 13.32, compared to DKNG's P/B of 45.31, further highlighting LNW's relative undervaluation [6] Earnings Outlook - LNW has a Zacks Rank of 1 (Strong Buy), indicating a stronger improvement in its earnings outlook compared to DKNG, which has a Zacks Rank of 3 (Hold) [3][7] - The overall valuation metrics and earnings outlook position LNW as the superior value option in the gaming sector [7]

Core Viewpoint - Light & Wonder's stock experienced a significant increase of over 10% following a favorable court ruling in its legal dispute with Aristocrat Leisure, contrasting with the flat performance of the S&P 500 [1]. Legal Dispute - Light & Wonder is involved in a legal case with Aristocrat Leisure, which accuses it of copying elements from its casino slot game in the design of Light & Wonder's Dragon Train game [2]. - The Nevada court ruled in favor of Light & Wonder, stating that the company does not need to disclose its mathematical models related to the slot games in question, and requested Aristocrat to specify the trade secrets it is trying to protect [4]. Background of the Case - Aristocrat, based in Australia, initiated the lawsuit against Light & Wonder in 2024, claiming it would seek all appropriate remedies for the alleged harm caused by Light & Wonder's actions [5]. Market Reaction - Following the positive court ruling, investors showed confidence in Light & Wonder, leading to a notable rise in its stock price [1].

Core Viewpoint - Light & Wonder (LNW) shares have increased by approximately 6.5% over the past month, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Group 1: Earnings Estimates - Estimates for Light & Wonder have trended downward over the past month, with a consensus estimate shift of -5.64% [2] - The overall direction and magnitude of estimate revisions indicate a downward shift, resulting in a Zacks Rank 3 (Hold) for Light & Wonder, suggesting an expectation of in-line returns in the coming months [4] Group 2: VGM Scores - Light & Wonder has a strong Growth Score of A, a Momentum Score of A, and a Value Score of A, placing it in the top 20% for this investment strategy, leading to an aggregate VGM Score of A [3] Group 3: Industry Performance - Light & Wonder is part of the Zacks Gaming industry, where Boyd Gaming (BYD) has gained 2.4% over the past month, reporting revenues of $991.57 million for the last quarter, reflecting a year-over-year increase of +3.2% [5] - Boyd Gaming is expected to post earnings of $1.62 per share for the current quarter, indicating a change of +2.5% from the previous year, with a Zacks Consensus Estimate change of -0.2% over the last 30 days, also holding a Zacks Rank 3 (Hold) and a VGM Score of A [6]

LNW NASDAQ • ASX L I S T E D I NVE ST OR DAY New York City • May 20, 2025 INVESTOR DAY 2025 3 LNW NASDAQ • ASX L I S T E D INVESTOR DAY 2025 2 Agenda LNW NASDAQ • ASX L I S T E D | Introduction | Business Overview and Strategy | | --- | --- | | Products, Business Verticals, | Our Unique Business Model and Leading | | & Cross-Platform | Positions | | Expert Panel | Differentiation Among Gaming Industry | | Financials | Robust Foundation and Opportunity for | | | Continued Growth | | Q&A | | INVESTOR DAY 2025 ...

Summary of Light & Wonder (LNW) 2025 Investor Day Company Overview - **Company Name**: Light & Wonder (LNW) - **Headquarters**: Las Vegas, Nevada - **Market Presence**: Dual listed on NASDAQ and ASX, with nearly 40% of market cap on ASX - **Employee Count**: Approximately 6,500 globally - **Revenue**: Consolidated revenue of just under GBP 3.2 billion, representing a 13% CAGR since 2022 [8][9][27] Financial Performance - **EBITDA**: Grew to $1.24 billion, a 17% CAGR [9][27] - **NPATA**: Increased to $480 million, a 24% CAGR [9][27] - **Debt Reduction**: Leverage reduced from 10.5 times in 2020 to 3 times currently [29] - **Shareholder Returns**: $1.2 billion returned to shareholders through share repurchase programs [29] Strategic Initiatives - **Acquisition of Grover Charitable Gaming**: Aimed at enhancing growth in the charitable gaming segment, which is a fast-growing adjacency with over 20% top-line growth [54][55][59] - **R&D Investment**: Increased internal rate of investment in R&D and CapEx by 28% since 2022 [22][28] - **Future Financial Targets**: Targeting $2 billion in EBITDA by 2028 and doubling NPATA per share from $5.27 to over $10.55 [33][34] Market Position and Growth Strategy - **Gaming Segments**: Focus on gaming, iGaming, social casino, and now charitable gaming [42] - **Game Performance**: Held 28% of the top new core performing games in North America as of the latest report [25][27] - **Expansion Plans**: Plans to enter new markets, including Indiana, which presents a $100 million revenue opportunity [79] Charitable Gaming Insights - **Market Size**: Charitable gaming market valued at $4.4 billion, with $1.1 billion allocated to electronic pull tabs [73] - **Customer Loyalty**: Strong customer base committed to supporting charities through gaming [74] - **Integration of Grover**: Grover's existing game mechanics will be enhanced with Light & Wonder's game catalog, improving quality and profitability [62][100] Corporate Culture and ESG Commitment - **High-Performance Culture**: Emphasis on attracting and retaining top talent, with a focus on collaboration and integrity [45][49] - **ESG Initiatives**: Investment in responsible gaming programs and alignment with UN Sustainable Development Goals [51][53] Conclusion - **Future Outlook**: Light & Wonder is positioned for significant growth through strategic acquisitions, enhanced R&D, and a focus on high-quality game development across multiple gaming segments, including the newly integrated charitable gaming sector [41][43][100]

Core Insights - Light & Wonder (NASDAQ: LNW) has experienced a significant stock price increase of 900% after divesting its lottery and sports betting units, which resulted in the elimination of over $1 billion in net debt [1] Company Overview - The company sold its lottery arm to Brookfield and its sports betting unit to Endeavor, focusing on its core business operations [1] Financial Impact - The divestitures led to a substantial reduction in net debt, enhancing the company's financial position and investor confidence [1]

Core Viewpoint - Light & Wonder, Inc. is transitioning from a gaming stock to a diversified, cross-platform content business characterized by high margins, strong recurring revenues, and an expanding digital presence [1] Group 1 - The company is evolving into a more valuable entity beyond its initial classification as a gaming stock [1] - It is focusing on building a diversified content business that leverages multiple platforms [1] - The business model is expected to yield high margins and strong recurring revenues [1]