Anyone who thought that Light & Wonder executives talked themselves out in an impromptu February 18 analyst call thought wrong. CEO Matt Wilson and CFO Oliver Chow held forth for 32 straight minutes on February 25, leaving Wall Street analysts relatively little time for questions.
The fourth-quarter-earnings call was notable for one passing disclosure buried deep in the presentation: Light & Wonder will discontinue and divest of its live-dealer igaming games, which Chow predicted would bring “a modest uplift” to cash flow.
Wilson began by lauding “another year of significant progress … cementing our commitment to deliver sustainable growth.” As for new acquisition Grover Gaming, revealed a week previously, Wilson said it “has an attractive recurring revenue base and an attractive and sticky customer base.
“Gaming continues to deliver exceptional results,” the CEO continued. He pointed to 850 more installed units in North America, 11 of which were in the top 25 of the Eilers’s slot machine rankings.
“I’m encouraged and expect gaming operations to return to robust growth in 2025,” said Wilson, pointing to Light & Wonder’s first-place shipping share of machines in both North America and Australia.
Despite a flat fourth quarter for SciPlay, Light & Wonder’s social-casino unit, Wilson proclaimed 2024 to have been another record year. The social-casino business, he said, “has outpaced the broader market. Our teams have done a great job of remaining nimble.”
The one disappointment for Light & Wonder was Jackpot Party. Wilson allowed that the game didn’t meet fourth-quarter expectations.
In igaming, “We executed a plan with several big launches,” including a partnership with FanDuel. “Accelerating releases of first-party content” were said to lie ahead.
“The performance we delivered reflects the solid financial and operational foundation we have built,” said Chow, taking up from Wilson. He reported that revenue was up 10 percent for the year and four percent in the fourth quarter.
Other metrics included an eight percent lift in fourth-quarter operating income and an 11 percent hike in 2024 cash flow. North American revenue per slot per day nudged up two percent.
“The quality of our offering remains strong,” asserted the CFO, noting that Light & Wonder slot cabinets were selling for an average of $18,000 apiece. “Our gaming performance,” he said, “truly demonstrates the depth and breadth of our portfolio.”
Chow said that 50 game titles had been released into Brazil’s igaming market via a variety of operators. He also noted that the company’s revolving line of credit had been extended from $750 million to an even $1 billion.
“We’re in a very fortunate position where our products are in high demand,” Chow resumed. “One great example where our conviction is high is in the charitable-gaming space,” opened to Light & Wonder through the Grover Gaming purchase.
Turning to questions, Wilson said he was confident that Light & Wonder would meet its $1.4 billion cash-flow target for 2025, with Grover-derived revenues being “accretive” to that. He added that the company still sees “significant growth” in states where igaming is legal.
Alluding to banned-in-America Dragon Train as “the drama that we had to manage through,” Wilson said it’s “almost completely behind us from an operating perspective.” He stressed that more Huff ’n Puff games are coming, along with new Wizard of Oz-themed products. “I expect that to scale nicely through the year,” appended Chow.
The latter called actual and potential trade wars “an absolutely fluid and dynamic situation.” He said Light & Wonder was trying to dissipate their effects through diversification of its supply chain.
Another hot-button issue raised was sweepstakes games. Noting that those are unregulated contests, Wilson said they were “therefore against our vision and strategy.” While he said he’d been keeping an eye on the space, Wilson pointed to mounting legal headwinds facing the sweepstakes sector.
Wilson was asked if he saw any softening of demand for slot machines. “Broadly, you can see resiliency within the major operators,” he replied. There were, he said, “lots of strengths and things to get excited about.”
He felt similarly about the increase on casino floors of revenue-sharing games. “We’re very encouraged by this. Putting a limit on the best games on your floor is a bit of a false economy.”
Wilson ended by setting a May 20 investor day. Light & Wonder would, he said, have more news to announce at that time.
