A May 7 first-quarter earnings call for Light & Wonder was dominated by issues that fell outside of that time frame — namely, tariffs.
CFO Oliver Chow prefaced a question-and-answer session with Wall Street analysts by saying, “We’re largely in with the industry in terms of the magnitude of impact” of tariffs. He added that Light & Wonder had contingency plans in place, including the re-sourcing of supplies. “Despite the tariff headwinds,” he stood by the company’s $1.4 billion cash-flow target for 2025.
Tariffs are “a dynamic situation, to say the least,” remarked CEO Matt Wilson after he opened the floor to questions. “It changes by the day, the hour, or the tweet. It’s a burden that the entire industry will have to manage through.”
Wilson said Light & Wonder would pass some of the higher anticipated costs on to its consumers, as it did during the COVID disruption. “This is a moving target,” Chow added. “We’re seeing that over the past month. We’re taking a very balanced approach to mitigating this. We’re not overreacting.”
Wilson resumed that the company brought some inventory forward to get ahead of tariffs. Mitigation strategies included importing it through Mexico, for instance.
Counseling patience, Wilson elaborated, “It was a pretty scorched-earth environment, but … sanity seems to have prevailed.” Added Chow, “We’re not going to be knee-jerk about this.” Wilson noted that gross gaming revenue is holding up well in the United States compared to the larger economic picture.
“Customers are like snowflakes. They’re all slightly different,” Wilson said, when pressed on buyer behavior in a tariff-likely situation. Some are moving up their equipment orders, while others are pausing them, waiting to see what happens. Wilson contrasted the tribal-casino method of purchasing, which he described as “set and forget,” with the more cautious approach of publicly traded companies.
On a more upbeat note, Wilson touted the performance of Light & Wonder and its products. He noted that the company has 10 of the top 25 games in the Eilers & Krejcik customer survey.
“We exited 2024 with the number one ship-share globally and continued that momentum into the first quarter,” the CEO said, pointing to 500 more game installations in North America. Later, he conceded that the fourth quarter of 2024 “was a little bit light” and that tough comparisons with early 2024 dissipated the first quarter of 2025 somewhat.
Still, he said, large game-sales opportunities are coming in Asia later this year and Chow noted that 5,700 slot machines were shipped to North America in the first quarter. Wilson blamed seasonality for a slowdown in international business, including a 10 percent decline in Light & Wonder’s overseas installed slot base.
Another mitigating circumstance was that Light & Wonder had passed the first anniversary of a major Asian equipment sale in the first quarter of 2024, depressing the comparisons. Light & Wonder is still the number-one brand in Australia, Wilson observed, “but not at those all-time highs.”As for an accelerated Australian stock listing, Wilson said it was widely supported. However, “There’s a lot on investors’ minds. In times of uncertainty, it’s probably prudent to take our foot off the accelerator.”
Early in the call, Chow ticked off a number of positive metrics in Light & Wonder’s first quarter. They included a 19 percent increase in free cash flow (to $111 million) and commitments from lenders in excess of the $800 million the company needed to consummate its purchase of Grover Gaming, expected to close by October.
Overall cash flow grew by 11 percent and Wilson anticipated even larger increases in the second and third quarters of 2025. Igaming revenues were up 30 percent in the U.S., propelled by exclusive game launches through FanDuel.
The Grover Gaming pickup came with an unexpected bonus. Indiana just legalized e-pulltabs, a Grover specialty. Wilson called this “a welcome tailwind.”
Chow noted that Light & Wonder has now seen 16 consecutive quarters of revenue growth. Gaming revenues were $495 million, a four percent increase, and gaming operations brought in another $173 million, up five percent. Light & Wonder slots were averaging win of $48 per machine per day.
A robust replacement cycle was reported to have driven $208 million in global sales, while table game products generated another $51 million. Light & Wonder’s SciPlay subsidiary engendered $202 million and Chow said, “We continue to outperform the broader social-casino market.”
Igaming brought in $77 million, helped (executives said) by the discontinuation of live-dealer play. Said Chow, “We continued to demonstrate a commitment to optimizing operations” across the board.
