UPDATED: Scientific Games rebrands to Light & Wonder, announces forecast-topping Q4

UPDATED: Scientific Games rebrands to Light & Wonder, announces forecast-topping Q4

  • CDC Gaming Reports
March 2, 2022 3:18 PM
  • CDC Gaming Reports
  • Other

Let there be Light … and Wonder.

Scientific Games, the Las Vegas-based instant-win lottery-ticket maker, led its Tuesday earnings news by announcing a three-year $750 million stock buyback plan and a new name – Light & Wonder.

The company revealed the name change a day earlier to The Wall Street Journal.

Light & Wonder has sold off its sports-betting and lottery businesses and CEO Barry Cottle told the Journal the move will enable the Las Vegas company better focus on casino and online gambling content.

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Scientific Games’ future identity

The company also launched the website lnw.com with details about the new brand. The new website prominently features its slots and igaming products side by side.

Light & Wonder reported increased net income and revenue that topped Wall Street forecasts, but shares sank 8.3% in regular trading Tuesday, down $5.22 to $57.70.

The company said its net income from continuing operations was $62 million, or 58 cents per diluted share, for the three months ended Dec. 31, reversing a year-earlier continuing-operations loss of $143 million, or $1.57 cents per diluted share. Analysts surveyed by Seeking Alpha had, on average, expected 9 cents per diluted share in continuing operations earnings.

Earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 67.4% to $216 million from $129 million.

Revenue rose 20.8% to $580 million from $480 million and topped the average $558.8 million forecast of Seeking Alpha-polled analysts. In its 8-K report filed with the Securities and Exchange Commission, Light & Wonder said fourth-quarter gaming revenue rose 30% from a year earlier to $372 million, primarily driven by an increase in its base of installed premium games and growth in game sales and table-game revenue.

For the full year ended Dec. 31, Light & Wonder had net income of $371 million, or $3.77 per diluted share, reversing a year-earlier loss of $569 million, or $6.02 per share. Twelve-month revenue rose 29.4% to $2.2 billion from $1.7 billion.

With moves like the December acquisition of European games developer ELK Studios, the newly named company has been positioning itself as a digital gaming business whose games cross platforms – casino, internet, and social. Cottle told the Journal his company aims to increase its digital revenue share to 50% by 2024.

“That’s where the world is trending,” Cottle told the Journal. “In igaming, particularly in the United States, the land-based operators are getting digital licenses and they want to provide their players 360-degree access to the games that they have.”

The company changed its web address to lnw.com and said it will operate under an assumed name until its name change is legalized this spring. (The assumed name wasn’t stated.) Once the name is legal, Light & Wonder’s shares will trade under the LNW ticker.

The new website features bursts of colors in red, oranges, purples, greens and cartoon characters – cats, dragons, leprechauns. Cottle said the new name fit the company’s vibe.

“(The name) evokes the kind of feelings we want to capture in the work we do every day,” Cottle told the Journal. “Excitement, inspiration, imagination, maybe even a little bit of magic, and certainly a lot of fun.”

Light & Wonder will host a call on Thursday, March 10 at 9:30 am PT with representatives of the leadership team, including Matt Wilson, Group Chief Executive – Gaming.

Follow Matthew Crowley on Twitter @copyjockey