Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Light & Wonder, Inc. due to allegations of materially misleading business information [1] Group 1: Legal Actions and Implications - Shareholders who purchased Light & Wonder securities may be entitled to compensation through a class action without any out-of-pocket fees [2] - A preliminary injunction was granted to Aristocrat Technologies against Light & Wonder, prohibiting the sale or commercialization of the "Dragon Train" product, which allegedly infringes on Aristocrat's intellectual property [3] - Following the news of the injunction, Light & Wonder's stock experienced a significant decline of 19.49% on September 24, 2024 [3] Group 2: Rosen Law Firm's Credentials - Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time [4] - The firm was ranked No. 1 by ISS Securities Class Action Services for the number of securities class action settlements in 2017 and has consistently ranked in the top 4 since 2013 [4] - In 2019, the firm secured over $438 million for investors, showcasing its capability in recovering significant amounts for its clients [4]

Company Overview - Light & Wonder, Inc. is a leading developer of technology-based products and services for the gaming, social, and digital gaming industries globally, having changed its name from Scientific Games Corporation on April 28, 2022, to align with its vision of becoming a leading cross-platform global games company [11]. Zacks Rank and Style Scores - Light & Wonder is currently rated as a 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid position in the market [12]. - The company has a Growth Style Score of B, forecasting a year-over-year earnings growth of 9.3% for the current fiscal year, supported by three analysts revising their earnings estimates higher in the last 60 days [12]. - The Zacks Consensus Estimate for Light & Wonder has increased by $0.10 to $5.76 per share, and the company boasts an average earnings surprise of 29.1% [12]. Investment Potential - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Light & Wonder is positioned as a potential top pick for growth investors [13].

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Group 1 - The company specializes in analyzing restaurant stocks in the U.S. market, covering various segments such as QSR, fast casual, casual dining, fine dining, and family dining [1] - Advanced analytical models and specialized valuation techniques are employed to provide detailed insights and actionable strategies for investors [1] - The founder actively engages in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] Group 2 - The company has no stock, option, or similar derivative position in any of the companies mentioned, nor plans to initiate any such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not receiving compensation from any company mentioned [2] - Seeking Alpha clarifies that past performance is not a guarantee of future results and that no investment recommendations are being made [3]

Core Insights - Light & Wonder (LNW) reported strong fourth-quarter 2024 results, with both revenue and net income exceeding expectations, showcasing the company's robust portfolio and business model [1][2][3] Financial Performance - Net income for Q4 2024 was $107 million or $1.2 per share, up from $66 million or 73 cents per share in Q4 2023, driven by revenue growth and asset sales [2] - Total revenues in Q4 2024 reached $797 million, an increase from $770 million in the prior-year quarter, surpassing the consensus estimate of $795 million [3] - For the full year 2024, LNW reported total revenues of $3.2 billion, up from $2.9 billion in 2023 [3] Revenue Breakdown - Services revenues increased to $532 million from $515 million year-over-year, while product sales rose to $265 million from $255 million [4] - Gaming revenues were $515 million, reflecting a 4% year-over-year increase, supported by strong sales of Gaming Machines and operations [4] - SciPlay revenues remained stable at $204 million, with a 6% increase in average revenue per daily active user [5] - iGaming revenues grew to $78 million, an 11% increase from the previous year, driven by momentum in North America and Europe [5] Operational Metrics - Non-GAAP consolidated AEBITDA was $315 million, up from $302 million year-over-year, with an AEBITDA margin remaining flat at 39% [6] - Cash generated from operating activities in 2024 was $632 million, compared to $590 million in 2023, with Q4 generating $202 million [7] Liquidity Position - As of December 31, 2024, LNW had $196 million in cash and cash equivalents, with long-term debt totaling $3.84 billion [7]

Financial Data and Key Metrics Changes - Consolidated revenue for 2024 was $3.2 billion, a 10% increase from the prior year, with fourth quarter revenue at $797 million, up 4% year-over-year [37] - Full year operating income was $668 million, a 29% increase year-over-year, with fourth quarter operating income growing 8% to $168 million [38] - Diluted net income per share more than doubled from $1.75 in 2023 to $3.68 in 2024, with fourth quarter diluted net income per share at $1.20, up from $0.73 [39] - Consolidated AEBITDA for 2024 was $1.24 billion, an 11% increase from 2023, with fourth quarter AEBITDA at $315 million, a 4% increase [40] Business Line Data and Key Metrics Changes - In Gaming, revenue for the quarter was $515 million, a 4% year-over-year increase, with systems growth of 24% [42] - SciPlay's full year revenue grew 6% to $821 million, with fourth quarter revenue at $204 million and AEBITDA increasing 7% year-over-year to a record $74 million [47] - iGaming revenue grew 11% year-over-year to $78 million in the quarter, with full year revenue up 9% to $299 million [52] Market Data and Key Metrics Changes - North America revenue per day grew 2% for the year, with global gaming machine sales at $195 million in the quarter, up 25% year-over-year [44] - The company maintained the number one ship share position in North America for the second, third, and fourth quarters [72] - The iGaming business processed over $24 billion in wagers through the OGS platform, reflecting a 30% year-over-year growth in US GGR [53] Company Strategy and Development Direction - The company plans to focus on top and bottom line growth while continuing investments for future growth, including the acquisition of Grover Gaming's charitable gaming business for $850 million [9][10] - The strategy includes leveraging R&D investments to enhance product offerings and expand into new markets, particularly in charitable gaming and iGaming [29][62] - The decision to divest the live casino business reflects a commitment to allocate resources to higher ROI opportunities [26][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $1.4 billion AEBITDA target for 2025, supported by strong product lineups and market momentum [68][75] - The company anticipates normalized growth in gaming operations in 2025, driven by a robust roadmap and strong performance from new game releases [15][17] - Management highlighted the importance of maintaining operational excellence and optimizing processes to navigate dynamic market conditions [57][58] Other Important Information - The company reported free cash flow of $74 million in the fourth quarter and $318 million for the year, reflecting strong earnings [61] - The acquisition of Grover is expected to be accretive to adjusted NPATA in the first full calendar year of ownership in 2026 [62] - The company has engaged advisors to evaluate potential strategies for enhancing its ASX listing and capital structure [34] Q&A Session Summary Question: Can you talk through how you see the cadence in getting to $1.4 billion in AEBITDA this year? - Management expressed confidence in achieving the target, citing strong product lineups and momentum leading into 2025 [68][75] Question: How might the installed base change in Q1 in light of new product strength? - Management noted that fee degradation seen in Q4 would reverse in Q1, with a strong lineup of new games expected to drive growth [79][82] Question: Can you discuss the margin growth in Q4 for the gaming segment? - Management indicated that margin growth was driven by mix and controllable factors, with expectations for continued margin expansion in 2025 [86][88] Question: What are the drivers of iGaming growth and outlook? - Management highlighted the successful launch of Huff N' Puff in iGaming and the focus on quality content and cadence of releases across channels [95][98] Question: How do you think about growth in cash flow moving forward? - Management emphasized the importance of free cash flow and the expected contribution from the Grover acquisition to drive incremental cash flow [104]

Core Insights - Light & Wonder (LNW) reported $797 million in revenue for Q4 2024, a year-over-year increase of 3.5% and an EPS of $1.42 compared to $0.73 a year ago, exceeding the Zacks Consensus Estimate of $795.27 million by +0.22% and delivering an EPS surprise of +31.48% [1] Revenue Breakdown - SciPlay revenue was $204 million, below the average estimate of $220.31 million, with no year-over-year change [4] - Gaming revenue reached $515 million, surpassing the average estimate of $503.14 million, reflecting a year-over-year increase of +3.8% [4] - iGaming revenue was reported at $78 million, exceeding the average estimate of $76.07 million, with a year-over-year change of +11.4% [4] AEBITDA Performance - AEBITDA for Gaming was $257 million, slightly above the average estimate of $252.76 million [4] - AEBITDA for Corporate was reported at -$41 million, compared to the average estimate of -$39.59 million [4] - AEBITDA for iGaming was $25 million, slightly above the average estimate of $24.96 million [4] - AEBITDA for SciPlay was $74 million, exceeding the average estimate of $73.17 million [4] Stock Performance - Light & Wonder shares returned +15.3% over the past month, contrasting with the Zacks S&P 500 composite's -1.8% change, and the stock currently holds a Zacks Rank 3 (Hold) [3]

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].