Light & Wonder(LNW) - 2023 Q4 - Annual Results

Revenue Growth - Consolidated revenue for Q4 2023 was $770 million, a 13% increase from $682 million in Q4 2022, marking the 11th consecutive quarter of revenue growth[17] - Full year consolidated revenue reached a record $2.9 billion, up 16% from $2.5 billion in 2022, driven by double-digit growth across all business segments[22] - Total revenue for the year ended December 31, 2023, was $2.902 billion, up from $2.512 billion in 2022, representing a 15.5% increase[38] - Total revenue for the three months ended December 31, 2023, was $496 million, an increase of 13.2% compared to $438 million in the same period of 2022[55] Segment Performance - Gaming revenue increased to $496 million in Q4 2023, a 13% rise year-over-year, supported by a 31% growth in global gaming machine sales[4] - SciPlay revenue rose to $204 million, a 12% increase, achieving a quarterly revenue record for the sixth consecutive quarter[4] - iGaming revenue grew 13% to $70 million, reflecting ongoing growth in both U.S. and international markets[4] - The gaming segment AEBITDA for Q4 2023 was $245 million, up from $215 million in Q4 2022, reflecting a growth of 13.9%[47] Profitability - Net income for Q4 2023 was $67 million, compared to $21 million in Q4 2022, primarily due to higher revenue and operating income[17] - Full year net income was $180 million, a significant improvement from a net loss of $176 million in 2022[22] - Operating income for Q4 2023 was $155 million, compared to $99 million in Q4 2022, reflecting a 56.6% increase[38] - Net income attributable to Light & Wonder for Q4 2023 was $66 million, up from $30 million in Q4 2022[38] Cash Flow and Financial Health - Free cash flow for 2023 was $291 million, compared to a negative free cash flow of $(674) million in 2022[22] - Free cash flow for the three months ended December 31, 2023, was $70 million, compared to a negative $140 million in the same period of 2022[64] - Cash and cash equivalents at the end of Q4 2023 were $425 million, down from $914 million at the end of 2022, a decrease of 53.5%[41] - The company made net cash used in financing activities of $537 million in Q4 2023, compared to $250 million in Q4 2022, indicating increased financial outflows[43] Debt and Leverage - The net debt leverage ratio decreased to 3.1x as of December 31, 2023, down from 3.3x at the end of 2022, remaining within the targeted range of 2.5x to 3.5x[11] - Net debt as of December 31, 2023, was $3,492 million, an increase from $3,025 million in 2022, with a net debt leverage ratio of 3.1[62] - The net debt leverage ratio is calculated as net debt divided by Consolidated AEBITDA, providing a measure of leverage[85] Capital Expenditures - Capital expenditures in Q4 2023 were $60 million[25] - The company reported capital expenditures of $60 million for Q4 2023, slightly up from $58 million in Q4 2022[43] Asset Management - As of December 31, 2023, total assets decreased to $5,552 million from $6,009 million in 2022, reflecting a decline of approximately 7.5%[41] - Total current liabilities increased to $696 million in Q4 2023 from $622 million in Q4 2022, an increase of 11.9%[41] User Engagement and Metrics - The average daily revenue per unit in North America increased to $47.91[25] - SciPlay achieved a record ARPDAU of $1.00, growing 15% year-over-year, with payer conversion reaching 10.7%[25] - The average monthly active users (MAU) for the SciPlay segment was 5.5 million, a decrease from 5.7 million in the same period of 2022[55] Non-GAAP Measures - Management introduced Adjusted NPATA as a non-GAAP financial measure to assess performance and valuation, widely used in the ASX gaming sector[71] - Adjusted NPATA reconciles to net income from continuing operations, excluding amortization and restructuring costs, to better reflect ongoing performance[88] - Consolidated AEBITDA is a non-GAAP measure that eliminates effects of restructuring and other items, aiding in evaluating ongoing performance[74][79] - Consolidated AEBITDA margin is calculated as a percentage of consolidated revenue, serving as a supplemental disclosure for performance evaluation[81]