CEO Matt Wilson closed the book on “an eventful quarter” late on Wednesday, holding Light & Wonder’s third-quarter earnings call. “Customers responded positively,” he said, to the company’s offerings at Global Gaming Expo and the Australasian Gaming Expo.
Wilson hailed the company’s financial results, including an AU$153 million ($107.7 million) debt reduction. (See sidebar.) He laid particularly emphasis on Fitch Ratings’ having upgraded Light & Wonder’s outlook to “Positive.”
“For now, we are prioritizing debt reduction,” added CFO Oliver Chow. He said the company was aiming to get its leverage down to three times cash flow by June of 2027.
To that end, no share repurchases were made during the third quarter, although Chow insisted they remained a permanent facet of Light & Wonder strategy. He praised an expectedly strong fourth quarter, despite strong year-over-year comparisons.
“We will never compromise the foundational R&D structure of the business,” Chow promised, in pursuit of short-term goals.
“Overall, this is another quarter in which earnings grew” and cash flow was stronger, Wilson said. Recurring revenue was up to 67% of Light & Wonder’s total, he added, from 64% in 2024.
“We also saw solid performance in our Class II segment,” Wilson noted. This helped counterbalance systems sales that were down 24% and table game ones that were seven percent off.
The systems business was, Wilson said, in “a rebuild phase.”
With regard to Light & Wonder’s Grover Gaming subsidiary, Wilson said it was targeting charitable gaming in Maryland, with an eye to a late-2027 debut. He also played up a spate of new casino-game releases, with titles such as Back to the Future.
Revenues for Light & Wonder’s ailing SciPlay subsidiary fell 12%. “The social casino market remains under pressure,” said Wilson, blaming sweepstakes casinos for the softness.
SciPlay had 17% fewer users during the third quarter, although they spent five percent more on average.
“Despite the softness, I am confident in the SciPlay team,” said Wilson, who also announced the arrival of a new social-casino COO, Matt LaBatt. LaBatt was currently in Tel Aviv, meeting SciPlay staffers.
“This transition allows us to review our business strategy,” said Wilson remarked, adding that the transition included moving spending away from SciPlay into higher-return areas of the business.
“We’ve lost some of innovation over the last few years,” said Chow, who had been filling in as interim COO of SciPlay. “It’s going to be a bit of journey for us.”
In traditional iGaming, a double-digit increase in revenue was credited to such game titles as Pirots, Huff n’ Puff and Ultimate Fire Link. “Our broad content portfolio continues to cement our leading position,” Wilson said, adding that he expected Light & Wonder to be in the Florida online market by year’s end.
Despite a significant tax increase in the United Kingdom, Wilson said the underlying British business remained strong. All Brazil-facing content, however, had been disabled, in keeping with that country’s new ban on iGaming.
U.S. consumer trends were raised as a possible concern.
“We’ve proven over the years to be agile,” Wilson replied. “We find ways to navigate.”
Tribal and regional gaming were still strong, he noted, which was good for Light & Wonder.
“Destination markets are a smaller percentage of our slot base,” Wilson explained.
Not only were casino operators looking to replace larger-than-usual percentages of their slot floors, Wilson observed. They had also raised the amount of floor space dedicated to premium games, from nine percent to 15%. Wilson said he thought Aristocrat Leisure had “been more flat” in this regard while Light & Wonder was on the upswing.
Potential new markets were also on the minds of Light & Wonder executives. “The elections yesterday throw a new lens on what can happen in the state legislatures,” said Wilson.
Chicago was, he continued, choosing locations for slot routes. Light & Wonder had product ready for those, with 15 years of past Illinois performance to show for it. 2027 would be, the CEO said, “a pretty sizable opportunity.”
Pennsylvania, where skill games remain in limbo, was “further afield” to Wilson, although he hoped for legislative activity on that issue.
“We don’t forecast or make plans over things we can’t control,” he added. Wilson did observe that Light & Wonder’s Georgia-based skill games were a model of what could go into Pennsylvania, should lawmakers break the logjam.
Looking ahead, Wilson remarked that sales figures and favorable industry commentary on Light & Wonder products added up to “tons of momentum for us. Promising customer feedback and customer data gives us the confidence to finish the year strong.”
