Year-over-year North American installed base growth and higher average daily revenue per unit pushed fourth-quarter net revenue higher and past Wall Street forecasts for Las Vegas-based cross-platform games company Light & Wonder.
In a statement Wednesday, Light & Wonder said its net income was $21 million for the three months ended Dec. 31, down from $62 million a year earlier. The company didn’t report earnings per share.
Light & Wonder said an income-tax benefit resulting from a valuation-allowance reversal on deferred taxes boosted the previous-year total.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 23% to $265 million from $216 million, buoyed by gaming-business growth.
Fourth-quarter revenue rose 18% to $682 million from $580 million, lifted by double-digit-percentage growth across all business lines. That topped the $654.8 million consensus forecast of analysts polled by Seeking Alpha.
In the fourth quarter, Light & Wonder’s gaming revenue rose 18% to $438 million from $372 million; revenue from the SciPlay mobile games company, in which Light & Wonder has an 81% stake, rose 15% to $182 million from $154 million.
In a conference call with analysts and journalists, Light & Wonder Chief Executive Officer Matt Wilson reflected on full-year 2022 performance, saying the company shipped more than 5,000 game units in North America, something it hadn’t done since 2019, as well as more than 7,700 game units globally.
“We entered 2023 with fantastic momentum and notably with a full pipeline of products and games that will continue to fuel our growth,” Wilson said. “We’re doubling down on this successful strategy and accelerating our cross-platform approach to content development. You can now expect two of our top-performing land-based titles being launched digitally each month and additional games coming from the studios we’ve acquired.”
Wilson added that Light & Wonder’s live casino studio in Michigan received provisional licensing approval.
In the earnings statement, Chief Financial Officer Connie James said, “We also returned significant capital to our shareholders, totaling $413 million since our share repurchase program was announced a year ago. We now have a strong balance sheet and clear roadmap to advance with discipline on our balanced and opportunistic capital-allocation strategy and elevate Light & Wonder’s value proposition.”
For the full year ended Dec. 31, Light & Wonder had a net loss of $176 million, reversing year-earlier net income of $24 million. A $147 million debt-financing loss hurt the 2022 result, Light & Wonder said.
Twelve-month revenue rose 17% to $2.5 billion from $2.2 billion, driven higher by revenue growth in gaming.
Deutsche Bank raised Light & Wonder’s price target to $55 from $52 and kept its “hold” rating.
Light & Wonder shares fell 21 cents, or 0.33%, Thursday, to close at $63.17 on the Nasdaq Stock Market.