Light & Wonder execs reflect on outperformance

May 9, 2024 1:32 PM
Photo: CDC Gaming Reports
  • David McKee, CDC Gaming Reports
May 9, 2024 1:32 PM
  • David McKee, CDC Gaming Reports

“We’re extremely proud,” CEO Matt Wilson said of Light & Wonder’s first-quarter numbers at the top of yesterday’s earnings call.

Story continues below

The company’s Dragon Train slot machine “debuted as the top new franchise,” Wilson said, adding that he looked forward to the imminent launch of Squid Games. According to the CEO, Light & Wonder now has 49 percent of the North American installed base, in addition to 15 consecutive quarters of growth.

Light & Wonder also led Australia in shipped-game share for the first time. Oregon and Canada demonstrated additional market growth and “we continue to gain share in a stabilizing social-casino market,” reaching 11 percent. “Most importantly, we’re making progress on our direct-to-consumer experience.”

The company’s Elk Studios and Lightning Box units posted record revenue and Light & Wonder continued to invest in live-dealer gambling.

CFO Oliver Chow hailed a second consecutive quarter of double-digit revenue growth, including 62 percent more operating income. “Our results reflect the collective and collaborative work of our business units.”

Dragon Train drove a three percent improvement in operating income, Chow said, and revenue per day was four percent higher in North America. Unit sales on this continent rose 14 percent and a replacement cycle in Macau also helped Light & Wonder’s bottom line.

If there was a disappointment, it lay in table-game sales that were “relatively flat.”

“We will always take a prudent approach with a focus on the long term,” said Chow of the social-gaming sphere. Of SciPlay, he added, “We continue to outperform our peers.”

Wilson said SciPlay was the only provider taking market share from its peers. “We can take that playbook and expand it across other games in our portfolio,” including Monopoly.

Wilson also announced the ongoing development of a new platform called Carbon, which would enable Light & Wonder to develop one game for three uses (social, casino, and icasino) simultaneously. “You’re going to start seeing a shorter and shorter lag time” in games coming to market, he said.

Light & Wonder reported $1.2 billion in liquidity and $171 million in cash flow. “We remain in our target debt-ratio range,” Chow remarked, noting that the company had $150 million still earmarked for share buybacks. He promised to “invest organically” and look for merger-and-acquisition chances.

Returning to the topic later, Wilson stressed focus and discipline when considering acquisition or expansion. “We have a clear north star on who we are and, importantly, who we’re not.” Complexity of purpose “comes with a little chaos. We’re not in a hurry to do a splashy piece of M&A.”

“We’ll continue to execute to the blueprint,” Chow added. “Share buybacks will absolutely be a huge focus for us.” The best use of capital, he continued, was an ongoing subject of intra-company discussion.