Light & Wonder, Inc. Reports Fourth Quarter and Full Year 2023 Results
- Record full-year results with double-digit growth across all businesses.
- 11 consecutive quarters of revenue growth.
- 13% increase in revenue for the quarter and 16% increase for the full year.
- Returned $170 million to shareholders through share repurchases in 2023.
- Maintained strong margins and demonstrated strong financial performance.
- Consolidated revenue reached $2.9 billion for the full year, showcasing growth and execution on the growth strategy.
- Gaming revenue increased by 13%, driven by robust Gaming machine sales growth.
- SciPlay revenue rose by 12%, breaking quarterly revenue records for the sixth consecutive quarter.
- iGaming revenue increased by 13%, reflecting growth momentum in the U.S. and international markets.
- Net debt leverage ratio decreased to 3.1x, remaining within the targeted range of 2.5x to 3.5x.
- Successfully repriced Term Loan B, reducing interest rates and annualized interest costs.
- Completed SciPlay merger integration successfully, strengthening cross-platform strategy.
- Executive leadership will host a conference call to review the results on February 27, 2024.
- None.
Insights
The report indicates a robust financial performance for Light & Wonder, Inc., with a notable 13% revenue growth in the quarter and 16% for the full year. Such consecutive double-digit growth is a positive signal for investors, reflecting the company's ability to expand and generate revenue consistently. The growth is broad-based, with all business segments contributing, which diversifies risk and may indicate a strong market position. The repurchase of shares worth $170 million signals confidence in the company's valuation and future prospects, potentially making the stock more attractive due to the reduced share float.
Furthermore, the successful completion of the SciPlay merger and the subsequent integration could create long-term value through synergies and a strengthened cross-platform strategy. However, investors should closely monitor the net debt leverage ratio, which, despite being within the targeted range, signifies a considerable debt load that could influence the company's flexibility and risk profile, especially in volatile market conditions.
Light & Wonder's performance in the gaming and iGaming sectors is particularly noteworthy. The 31% growth in Gaming machine sales and the expansion of the North American premium installed base for the 14th consecutive quarter suggest that the company's product offerings are resonating well with the market. This is further supported by the strong content performance and success of their COSMIC™ and MURAL® cabinets. The iGaming segment's 13% revenue increase and the launch of live casino operations in Michigan demonstrate the company's proactive approach to capitalizing on the growing online gaming market.
Additionally, the SciPlay segment's record revenue growth, driven by social casino business and effective marketing strategies, highlights the company's ability to engage and monetize users effectively. The record payer conversion and average revenue per daily active user (ARPDAU) are key metrics indicating a healthy user base with potential for further growth as the digital entertainment landscape continues to expand.
The repricing of the Term Loan B in January 2024, which reduced the interest rate by 35 basis points, is a strategic financial maneuver that demonstrates the company's proactive management of its debt profile. This action not only reduces annualized interest costs, which can improve net income margins, but also reflects well on the company's creditworthiness and negotiating capability. It is essential for stakeholders to understand the implications of such financial restructuring as it can significantly impact the company's long-term financial sustainability and its ability to invest in growth opportunities.
Achieved Record Full Year Results Driven by Double-Digit Growth across All Businesses
Delivered 11 Consecutive Quarters of Consolidated Revenue Growth with Increase of
Healthy Balance Sheet and Strong Financial Profile
Returned
We closed the year with momentum and delivered our 11th consecutive quarter of consolidated revenue growth and sixth consecutive quarter of double-digit growth year-over-year. Consolidated revenue in the quarter grew
-
Gaming revenue increased to
$496 million 13% compared to the prior year period, primarily driven by another quarter of robust Gaming machine sales growth, which increased31% globally, coupled with continued strong momentum in Gaming operations. -
SciPlay revenue rose to
$204 million 12% increase from the prior year period, breaking a quarterly revenue record for the sixth consecutive quarter, driven by the core social casino business, which once again delivered strong payer metrics and outpaced the market and gained share. -
iGaming revenue increased
13% to$70 million U.S. and international markets.
Full year consolidated revenue increased
Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “2023 was a banner year for Light & Wonder. Our businesses delivered double-digit growth across the board throughout the year, enabled by strategic investments and strong execution. We consistently leverage a differentiated product strategy and plan to capitalize on the significant growth opportunities ahead of us. I am thrilled with the momentum we continue to see in the business, and with our winning mentality, experience, and talent in place, we are well-positioned to continue our growth trajectory. I want to congratulate our team on a successful year and know the best is yet to come.”
Oliver Chow, Chief Financial Officer of Light & Wonder, added, “We continue to see healthy trends in the business and were able to capitalize on many of the opportunities presented to us in 2023 to deliver strong top- and bottom-line growth, both in the quarter and for the full year. Our teams continued to deliver quality earnings with improved metrics over the course of 2023. Moving forward, we will focus on driving sustainable growth and executing against our balanced and opportunistic capital allocation strategy with discipline, driving value for all stakeholders.”
LEVERAGE, CAPITAL RETURN AND STRATEGY UPDATE
-
Principal face value of debt outstanding(1) of
$3.9 billion -
Returned
$25 million $170 million $575 million 77% of total program authorization. -
Repriced our Term Loan B in January 2024 reducing our interest rate by 35 basis points, resulting in a reduction in annualized interest costs of approximately
$8 million - SciPlay merger integration completed successfully, with the Company strengthening its cross-platform strategy through synergistic game development processes across all businesses.
SUMMARY RESULTS
Unless otherwise noted, amounts, percentages and discussion included below reflect the results of operations and financial condition of the Company’s continuing operations, which include its Gaming, SciPlay and iGaming businesses. We have reflected our former Lottery business (disposed during the second quarter of 2022) and Sports Betting business (disposed during the third quarter of 2022) (collectively referred to as the “Divestitures”) as discontinued operations.
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Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
($ in millions) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
||
Revenue |
$ |
770 |
|
$ |
682 |
|
|
$ |
2,902 |
|
$ |
2,512 |
|
||
Net income (loss) |
|
67 |
|
|
21 |
|
|
|
180 |
|
|
(176 |
) |
||
Net income attributable to L&W(3) |
|
66 |
|
|
30 |
|
|
|
163 |
|
|
3,675 |
|
||
Net cash provided by (used in) operating activities(3) |
|
167 |
|
|
(87 |
) |
|
|
590 |
|
|
(381 |
) |
||
Capital expenditures |
|
60 |
|
|
58 |
|
|
|
242 |
|
|
216 |
|
||
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Financial Measures |
|
|
|
|
|
|
|
||||||||
Consolidated AEBITDA(2) |
$ |
302 |
|
$ |
265 |
|
|
$ |
1,118 |
|
$ |
913 |
|
||
Adjusted NPATA(2) |
|
109 |
|
Np |
|
|
388 |
|
Np |
||||||
Free cash flow(2)(3) |
|
70 |
|
|
(148 |
) |
|
|
291 |
|
|
(674 |
) |
||
|
|
|
|
|
|
|
|
||||||||
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|
|
|
As of December 31, |
||||||||||
Balance Sheet Measures |
|
|
|
|
|
2023 |
|
|
2022 |
|
|||||
Cash and cash equivalents |
|
|
|
|
$ |
425 |
|
$ |
914 |
|
|||||
Total debt |
|
|
|
|
|
3,874 |
|
|
3,894 |
|
|||||
Available liquidity(4) |
|
|
|
|
|
1,165 |
|
|
1,802 |
|
|||||
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|
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|
|
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Np — Prior periods are not presented due to materially different debt and tax profile of the Company prior to the completion of the Divestitures. |
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(1) Principal face value of debt outstanding represents outstanding principal value of debt balances that conform to the presentation found in Note 15 to the consolidated financial statements in our December 31, 2023 Form 10-K. |
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(2) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release. |
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(3) For the year ended December 31, 2022, these financial measures represent combined results inclusive of discontinued operations. |
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(4) Available liquidity is calculated as cash and cash equivalents plus remaining revolver capacity, including the SciPlay Revolver for the period ended December 31, 2022. As a result of the completion of the SciPlay merger on October 23, 2023, we terminated the SciPlay Revolver, which resulted in a |
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Fourth Quarter 2023 Financial Highlights
-
Fourth quarter consolidated revenue was
$770 million $682 million 13% increase relative to the prior year period driven by double-digit growth across all lines of business, representing an 11th consecutive quarter of year-over-year growth. Gaming revenue increased13% , driven by another quarter of robust growth in Gaming machine sales, which grew31% year-over-year, while SciPlay revenue reached another quarterly record and iGaming revenue held at a record level. -
Net income was
$67 million $21 million -
Consolidated AEBITDA(1) was
$302 million $265 million 14% increase relative to the prior year period, driven by double-digit growth and maintaining strong margins across all of our businesses. -
Adjusted NPATA(1) was
$109 million -
Net cash provided by operating activities was
$167 million $(87) million $176 million -
Free cash flow(1) was
$70 million $(148) million $176 million $16 million
BUSINESS SEGMENT HIGHLIGHTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2023 |
|||||||||||||||||||||||||||||||||||
($ in millions) |
Revenue |
|
AEBITDA |
|
AEBITDA Margin(2)(3) |
||||||||||||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
$ |
|
% |
|
|
2023 |
|
|
|
2022 |
|
|
$ |
|
% |
|
2023 |
|
|
2022 |
|
|
PP Change(3) |
||||||
Gaming |
$ |
496 |
|
$ |
438 |
|
$ |
58 |
|
13 |
% |
|
$ |
245 |
|
|
$ |
215 |
|
|
$ |
30 |
|
|
14 |
% |
|
49 |
% |
|
49 |
% |
|
— |
|
SciPlay |
|
204 |
|
|
182 |
|
|
22 |
|
12 |
% |
|
|
69 |
|
|
|
59 |
|
|
|
10 |
|
|
17 |
% |
|
34 |
% |
|
32 |
% |
|
2 |
|
iGaming |
|
70 |
|
|
62 |
|
|
8 |
|
13 |
% |
|
|
23 |
|
|
|
19 |
|
|
|
4 |
|
|
21 |
% |
|
33 |
% |
|
31 |
% |
|
2 |
|
Corporate and other(4) |
|
— |
|
|
— |
|
|
— |
|
— |
% |
|
|
(35 |
) |
|
|
(28 |
) |
|
|
(7 |
) |
|
(25 |
)% |
|
n/a |
|
|
n/a |
|
|
n/a |
|
Total |
$ |
770 |
|
$ |
682 |
|
$ |
88 |
|
13 |
% |
|
$ |
302 |
|
|
$ |
265 |
|
|
$ |
37 |
|
|
14 |
% |
|
39 |
% |
|
39 |
% |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||||||||||
PP - percentage points. |
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n/a - not applicable. |
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(1) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release. |
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(2) Segment AEBITDA Margin is calculated as segment AEBITDA as a percentage of segment revenue. |
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(3) As calculations are made using whole dollar numbers, actual results may vary compared to calculations presented in this table. |
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(4) Includes amounts not allocated to the business segments (including corporate costs) and other non-operating expenses (income). |
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Full Year 2023 Financial Highlights
-
Consolidated revenue was a record
$2.9 billion $2.5 billion 16% increase. Growth was driven by double-digit revenue growth across all our businesses. Our Gaming business demonstrated continued momentum with Gaming machine sales growing36% and Table products growing13% . Consolidated revenue also benefited from SciPlay due to growth of social casino business exceeding that of the market, while iGaming demonstrated strong performance on growth inU.S. and international markets. -
Net income (loss) was
$180 million $(176) million $15 million $147 million -
Consolidated AEBITDA(1) was
$1.1 billion $913 million $205 million 22% increase, primarily due to double-digit revenue growth and margin expansion across all of our businesses. -
Adjusted NPATA(1) was
$388 million -
Net cash provided by operating activities was
$590 million $(381) million $32 million $641 million -
Free cash flow(1) was
$291 million $(674) million $641 million $97 million $32 million $25 million - Net debt leverage ratio(1) declined to 3.1x from 3.3x at the end of 2022, remaining in our targeted net debt leverage ratio(1) range of 2.5x to 3.5x.
BUSINESS SEGMENT HIGHLIGHTS FOR THE YEAR ENDED DECEMBER 31, 2023 |
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($ in millions) |
Revenue |
|
AEBITDA |
|
AEBITDA Margin(2)(3) |
||||||||||||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
$ |
|
% |
|
|
2023 |
|
|
|
2022 |
|
|
$ |
|
% |
|
2023 |
|
|
2022 |
|
|
PP Change(3) |
||||||
Gaming |
$ |
1,850 |
|
$ |
1,601 |
|
$ |
249 |
|
16 |
% |
|
$ |
918 |
|
|
$ |
767 |
|
|
$ |
151 |
|
|
20 |
% |
|
50 |
% |
|
48 |
% |
|
2 |
|
SciPlay |
|
777 |
|
|
671 |
|
|
106 |
|
16 |
% |
|
|
243 |
|
|
|
187 |
|
|
|
56 |
|
|
30 |
% |
|
31 |
% |
|
28 |
% |
|
3 |
|
iGaming |
|
275 |
|
|
240 |
|
|
35 |
|
15 |
% |
|
|
95 |
|
|
|
80 |
|
|
|
15 |
|
|
19 |
% |
|
35 |
% |
|
33 |
% |
|
2 |
|
Corporate and other(4) |
|
— |
|
|
— |
|
|
— |
|
— |
% |
|
|
(138 |
) |
|
|
(121 |
) |
|
|
(17 |
) |
|
(14 |
)% |
|
n/a |
|
|
n/a |
|
|
n/a |
|
Total |
$ |
2,902 |
|
$ |
2,512 |
|
$ |
390 |
|
16 |
% |
|
$ |
1,118 |
|
|
$ |
913 |
|
|
$ |
205 |
|
|
22 |
% |
|
39 |
% |
|
36 |
% |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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PP - percentage points. |
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n/a - not applicable. |
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(1) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release. |
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(2) Segment AEBITDA margin is calculated as segment AEBITDA as a percentage of segment revenue. |
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(3) As calculations are made using whole dollar numbers, actual results may vary compared to calculations presented in this table. |
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(4) Includes amounts not allocated to the business segments (including corporate costs) and other non-operating expenses (income). |
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Fourth Quarter 2023 Business Segments Key Highlights
-
Gaming revenue increased to
$496 million 13% compared to the prior year period, primarily driven by global Gaming machine sales growth of31% , while Gaming operations revenue increased7% benefiting from year-over-year growth in our North American installed base and average daily revenue per unit, which increased to$47.91 47% of our total installed base mix. Gaming AEBITDA was$245 million 14% compared to the prior year period, primarily driven by revenue growth in the period. -
SciPlay revenue was
$204 million 12% increase from the prior year period, once again achieving record quarterly revenue. SciPlay AEBITDA was$69 million 17% compared to the prior year period with AEBITDA margin improving two percentage points, reflective of continuing revenue growth, partially offset by higher marketing spend. Growth was primarily driven by the core social casino business, which continued to deliver record player engagement and monetization leveraging game content, dynamic Live Ops and effective marketing strategies. SciPlay maintained its number of payers around 0.6 million and achieved its highest ever AMRPPU(1), enabling SciPlay to grow ARPDAU(2) by15% year-over-year to a record$1.00 10.7% . -
iGaming revenue increased
13% to$70 million 21% from the prior year period with continued growth momentum in theU.S. and international markets. Wagers processed through our iGaming platform have increased to$21.6 billion Michigan . -
Capital expenditures were
$60 million
(1) Average Monthly Revenue Per Paying User. |
(2) Average Revenue Per Daily Active User. |
Earnings Conference Call
As previously announced, Light & Wonder executive leadership will host a conference call on Tuesday, February 27, 2024 at 4:30 p.m. EST to review the Company’s fourth quarter and full year 2023 results. To access the call live via a listen-only webcast and presentation, please visit explore.investors.lnw.com and click on the webcast link under the Events and Presentations section. To access the call by telephone, please dial: +1 (833) 470-1428 for
About Light & Wonder
Light & Wonder, Inc. is the leading cross-platform global games company. Through our three unique, yet highly complementary businesses, we deliver unforgettable experiences by combining the exceptional talents of our 6,000+ member team, with a deep understanding of our customers and players. We create immersive content that forges lasting connections with players, wherever they choose to engage. At Light & Wonder, it’s all about the games. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices. To learn more visit www.lnw.com.
You can access our filings with the Securities Exchange Commission (“SEC”) through the SEC website at www.sec.gov, with the Australian Stock Exchange (“ASX”) through the ASX website at www.asx.com.au or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at explore.investors.lnw.com, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure.
The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document, and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.
All ® notices signify marks registered in
Forward-Looking Statements
In this press release, Light & Wonder makes “forward-looking statements” within the meaning of the
- our inability to successfully execute our strategy;
- slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
- risks relating to foreign operations, including anti-corruption laws, fluctuations in currency rates, restrictions on the payment of dividends from earnings, restrictions on the import of products and financial instability;
-
difficulty predicting what impact, if any, new tariffs imposed by and other trade actions taken by the
U.S. and foreign jurisdictions could have on our business; -
U.S. and international economic and industry conditions, including increases in benchmark interest rates and the effects of inflation; - public perception of our response to environmental, social and governance issues;
- the effects of health epidemics, contagious disease outbreaks and public perception thereof;
- changes in, or the elimination of, our share repurchase program;
- resulting pricing variations and other impacts of our common stock being listed to trade on more than one stock exchange;
- level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
- inability to further reduce or refinance our indebtedness;
- restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
- competition;
- inability to win, retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
-
risks and uncertainties of potential changes in
U.K. gaming legislation, including any new or revised licensing and taxation regimes, responsible gambling requirements and/or sanctions on unlicensed providers; - inability to adapt to, and offer products that keep pace with, evolving technology, including any failure of our investment of significant resources in our R&D efforts;
- the outcome of any legal proceedings that may be instituted following completion of the SciPlay merger;
- failure to retain key Management and employees;
- unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, war, armed conflicts or hostilities, the impact such events may have on our customers, suppliers, employees, consultants, business partners or operations, as well as Management’s response to any of the aforementioned factors;
- changes in demand for our products and services;
- dependence on suppliers and manufacturers;
- SciPlay’s dependence on certain key providers;
- ownership changes and consolidation in the gaming industry;
- fluctuations in our results due to seasonality and other factors;
-
risks as a result of being publicly traded in
the United States andAustralia , including price variations and other impacts relating to the secondary listing of the Company’s common stock on the Australian Securities Exchange; - the possibility that we may be unable to achieve expected operational, strategic and financial benefits of the SciPlay merger;
- security and integrity of our products and systems, including the impact of any security breaches or cyber-attacks;
- protection of our intellectual property, inability to license third-party intellectual property and the intellectual property rights of others;
- reliance on or failures in information technology and other systems;
- litigation and other liabilities relating to our business, including litigation and liabilities relating to our contracts and licenses, our products and systems, our employees (including labor disputes), intellectual property, environmental laws and our strategic relationships;
- reliance on technological blocking systems;
- challenges or disruptions relating to the completion of the domestic migration to our enterprise resource planning system;
- laws and government regulations, both foreign and domestic, including those relating to gaming, data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information and other consumer data, and environmental laws, and those laws and regulations that affect companies conducting business on the internet, including online gambling;
- legislative interpretation and enforcement, regulatory perception and regulatory risks with respect to gaming, especially internet wagering and social gaming;
- changes in tax laws or tax rulings, or the examination of our tax positions;
- opposition to legalized gaming or the expansion thereof and potential restrictions on internet wagering;
- significant opposition in some jurisdictions to interactive social gaming, including social casino gaming and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;
- expectations of shift to regulated digital gaming;
- inability to develop successful products and services and capitalize on trends and changes in our industries, including the expansion of internet and other forms of digital gaming;
-
the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive regulations in this area is likely within the
U.S. and other jurisdictions; - incurrence of restructuring costs;
- goodwill impairment charges including changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
- stock price volatility;
- failure to maintain adequate internal control over financial reporting;
- dependence on key executives;
- natural events that disrupt our operations, or those of our customers, suppliers or regulators; and
- expectations of growth in total consumer spending on social casino gaming.
Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in our filings with the SEC, including the Company’s current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, including the forthcoming report to be filed with the SEC for the year ended December 31, 2023 (including under the headings “Forward Looking Statements” and “Risk Factors”). Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the
You should also note that this press release may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning the international gaming, social and digital gaming industries than the same industries in the
Due to rounding, certain numbers presented herein may not precisely recalculate.
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LIGHT & WONDER, INC. AND SUBSIDIARIES
|
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|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Services |
$ |
515 |
|
|
$ |
466 |
|
|
$ |
1,991 |
|
|
$ |
1,795 |
|
Products |
|
255 |
|
|
|
216 |
|
|
|
911 |
|
|
|
717 |
|
Total revenue |
|
770 |
|
|
|
682 |
|
|
|
2,902 |
|
|
|
2,512 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Cost of services(1) |
|
114 |
|
|
|
106 |
|
|
|
445 |
|
|
|
390 |
|
Cost of products(1) |
|
121 |
|
|
|
97 |
|
|
|
427 |
|
|
|
348 |
|
Selling, general and administrative |
|
209 |
|
|
|
182 |
|
|
|
808 |
|
|
|
717 |
|
Research and development |
|
59 |
|
|
|
55 |
|
|
|
228 |
|
|
|
218 |
|
Depreciation, amortization and impairments |
|
86 |
|
|
|
103 |
|
|
|
384 |
|
|
|
420 |
|
Restructuring and other |
|
26 |
|
|
|
40 |
|
|
|
92 |
|
|
|
146 |
|
Total operating expenses |
|
615 |
|
|
|
583 |
|
|
|
2,384 |
|
|
|
2,239 |
|
Operating income |
|
155 |
|
|
|
99 |
|
|
|
518 |
|
|
|
273 |
|
Other (expense) income: |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(78 |
) |
|
|
(73 |
) |
|
|
(309 |
) |
|
|
(327 |
) |
Loss on debt financing transactions |
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
(147 |
) |
Gain on remeasurement of debt and other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27 |
|
Other (expense) income, net |
|
(12 |
) |
|
|
— |
|
|
|
11 |
|
|
|
11 |
|
Total other expense, net |
|
(90 |
) |
|
|
(73 |
) |
|
|
(313 |
) |
|
|
(436 |
) |
Net income (loss) from continuing operations before income taxes |
|
65 |
|
|
|
26 |
|
|
|
205 |
|
|
|
(163 |
) |
Income tax benefit (expense) |
|
2 |
|
|
|
(5 |
) |
|
|
(25 |
) |
|
|
(13 |
) |
Net income (loss) from continuing operations |
|
67 |
|
|
|
21 |
|
|
|
180 |
|
|
|
(176 |
) |
Net income from discontinued operations, net of tax(2) |
|
— |
|
|
|
18 |
|
|
|
— |
|
|
|
3,873 |
|
Net income |
|
67 |
|
|
|
39 |
|
|
|
180 |
|
|
|
3,697 |
|
Less: Net income attributable to noncontrolling interest |
|
1 |
|
|
|
9 |
|
|
|
17 |
|
|
|
22 |
|
Net income attributable to L&W |
$ |
66 |
|
|
$ |
30 |
|
|
$ |
163 |
|
|
$ |
3,675 |
|
|
|
|
|
|
|
|
|
||||||||
Per Share - Basic: |
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations |
$ |
0.74 |
|
|
$ |
0.12 |
|
|
$ |
1.79 |
|
|
$ |
(2.09 |
) |
Net income from discontinued operations |
|
— |
|
|
|
0.20 |
|
|
|
— |
|
|
|
40.87 |
|
Net income attributable to L&W |
$ |
0.74 |
|
|
$ |
0.32 |
|
|
$ |
1.79 |
|
|
$ |
38.78 |
|
|
|
|
|
|
|
|
|
||||||||
Per Share - Diluted: |
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations |
$ |
0.73 |
|
|
$ |
0.12 |
|
|
$ |
1.75 |
|
|
$ |
(2.09 |
) |
Net income from discontinued operations |
|
— |
|
|
|
0.20 |
|
|
|
— |
|
|
|
40.87 |
|
Net income attributable to L&W |
$ |
0.73 |
|
|
$ |
0.32 |
|
|
$ |
1.75 |
|
|
$ |
38.78 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations: |
|
|
|
|
|
|
|
||||||||
Basic shares |
|
90 |
|
|
|
93 |
|
|
|
91 |
|
|
|
95 |
|
Diluted shares |
|
92 |
|
|
|
95 |
|
|
|
93 |
|
|
|
95 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Excludes depreciation, amortization and impairments. |
|||||||||||||||
(2) The year ended December 31, 2022 includes a total pre-tax gain of |
|||||||||||||||
|
|||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||
|
|
|
|
||||
|
As of December 31, |
||||||
|
|
2023 |
|
|
2022 |
||
Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
425 |
|
$ |
914 |
||
Restricted cash |
|
90 |
|
|
47 |
||
Receivables, net of allowance for credit losses of |
|
506 |
|
|
455 |
||
Inventories |
|
177 |
|
|
161 |
||
Prepaid expenses, deposits and other current assets |
|
113 |
|
|
117 |
||
Total current assets |
|
1,311 |
|
|
1,694 |
||
|
|
|
|
||||
Restricted cash |
|
6 |
|
|
6 |
||
Receivables, net of allowance for credit losses of |
|
37 |
|
|
14 |
||
Property and equipment, net |
|
236 |
|
|
204 |
||
Operating lease right-of-use assets |
|
52 |
|
|
49 |
||
Goodwill |
|
2,945 |
|
|
2,919 |
||
Intangible assets, net |
|
605 |
|
|
797 |
||
Software, net |
|
158 |
|
|
145 |
||
Deferred income taxes |
|
142 |
|
|
114 |
||
Other assets |
|
60 |
|
|
67 |
||
Total assets |
$ |
5,552 |
|
$ |
6,009 |
||
|
|
|
|
||||
Liabilities and Stockholders’ Equity: |
|
|
|
||||
Current portion of long-term debt |
$ |
22 |
|
$ |
24 |
||
Accounts payable |
|
241 |
|
|
154 |
||
Accrued liabilities |
|
404 |
|
|
380 |
||
Income taxes payable |
|
29 |
|
|
64 |
||
Total current liabilities |
|
696 |
|
|
622 |
||
|
|
|
|
||||
Deferred income taxes |
|
20 |
|
|
87 |
||
Operating lease liabilities |
|
39 |
|
|
37 |
||
Other long-term liabilities |
|
180 |
|
|
232 |
||
Long-term debt, excluding current portion |
|
3,852 |
|
|
3,870 |
||
Total stockholders’ equity(1) |
|
765 |
|
|
1,161 |
||
Total liabilities and stockholders’ equity |
$ |
5,552 |
|
$ |
6,009 |
||
|
|
|
|
||||
(1) Includes |
|||||||
|
|||||||||||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
67 |
|
|
$ |
39 |
|
|
$ |
180 |
|
|
$ |
3,697 |
|
Less: Income from discontinued operations, net of tax |
|
— |
|
|
|
(18 |
) |
|
|
— |
|
|
|
(3,873 |
) |
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities from continuing operations |
|
140 |
|
|
|
131 |
|
|
|
576 |
|
|
|
643 |
|
Changes in working capital accounts, excluding the effects of acquisitions(1) |
|
(1 |
) |
|
|
(198 |
) |
|
|
(82 |
) |
|
|
(863 |
) |
Changes in deferred income taxes and other |
|
(39 |
) |
|
|
(33 |
) |
|
|
(84 |
) |
|
|
(29 |
) |
Net cash provided by (used in) operating activities from continuing operations |
|
167 |
|
|
|
(79 |
) |
|
|
590 |
|
|
|
(425 |
) |
Net cash (used in) provided by operating activities from discontinued operations |
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
|
44 |
|
Net cash provided by (used in) operating activities |
|
167 |
|
|
|
(87 |
) |
|
|
590 |
|
|
|
(381 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
(60 |
) |
|
|
(58 |
) |
|
|
(242 |
) |
|
|
(216 |
) |
Acquisitions of businesses, net of cash acquired |
|
— |
|
|
|
(18 |
) |
|
|
(4 |
) |
|
|
(136 |
) |
Proceeds from settlement of cross-currency interest rate swaps |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50 |
|
Proceeds from sale of investments and other, net |
|
(1 |
) |
|
|
48 |
|
|
|
(2 |
) |
|
|
50 |
|
Net cash used in investing activities from continuing operations |
|
(61 |
) |
|
|
(28 |
) |
|
|
(248 |
) |
|
|
(252 |
) |
Net cash (used in) provided by investing activities from discontinued operations(2) |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
6,368 |
|
Net cash (used in) provided by investing activities |
|
(61 |
) |
|
|
(28 |
) |
|
|
(251 |
) |
|
|
6,116 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Payments of long-term debt, net (inclusive of redemption premium) |
|
(5 |
) |
|
|
(6 |
) |
|
|
(34 |
) |
|
|
(4,893 |
) |
Payments of debt issuance and deferred financing costs |
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
(37 |
) |
Payments on license obligations |
|
(5 |
) |
|
|
(5 |
) |
|
|
(31 |
) |
|
|
(35 |
) |
Purchase of L&W common stock |
|
(25 |
) |
|
|
(202 |
) |
|
|
(170 |
) |
|
|
(405 |
) |
Purchase of SciPlay’s common stock |
|
(496 |
) |
|
|
(19 |
) |
|
|
(519 |
) |
|
|
(37 |
) |
Net redemptions of common stock under stock-based compensation plans and other |
|
(6 |
) |
|
|
(18 |
) |
|
|
(26 |
) |
|
|
(53 |
) |
Net cash used in financing activities from continuing operations |
|
(537 |
) |
|
|
(250 |
) |
|
|
(788 |
) |
|
|
(5,460 |
) |
Net cash used in financing activities from discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Net cash used in financing activities |
|
(537 |
) |
|
|
(250 |
) |
|
|
(788 |
) |
|
|
(5,463 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
5 |
|
|
|
6 |
|
|
|
3 |
|
|
|
(6 |
) |
(Decrease) increase in cash, cash equivalents and restricted cash |
|
(426 |
) |
|
|
(359 |
) |
|
|
(446 |
) |
|
|
266 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
947 |
|
|
|
1,326 |
|
|
|
967 |
|
|
|
701 |
|
Cash, cash equivalents and restricted cash, end of period |
|
521 |
|
|
|
967 |
|
|
|
521 |
|
|
|
967 |
|
Less: Cash, cash equivalents and restricted cash of discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cash, cash equivalents and restricted cash of continuing operations, end of period |
$ |
521 |
|
|
$ |
967 |
|
|
$ |
521 |
|
|
$ |
967 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
||||||||
Cash paid for interest |
$ |
85 |
|
|
$ |
80 |
|
|
$ |
306 |
|
|
$ |
351 |
|
Income taxes paid |
|
28 |
|
|
|
195 |
|
|
|
147 |
|
|
|
692 |
|
Distributed earnings from equity investments |
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
6 |
|
Cash paid for contingent consideration included in operating activities |
|
8 |
|
|
|
7 |
|
|
|
17 |
|
|
|
7 |
|
Supplemental non-cash transactions: |
|
|
|
|
|
|
|
||||||||
Non-cash interest expense |
$ |
2 |
|
|
$ |
2 |
|
|
$ |
10 |
|
|
$ |
14 |
|
(1) Inclusive of income tax payments. |
|||||||||||||||
(2) The year ended December 31, 2023 includes |
|||||||||||||||
|
|||||||||||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of Net Income Attributable to L&W to Consolidated AEBITDA |
|
|
|
|
|
|
|
||||||||
Net income attributable to L&W |
$ |
66 |
|
|
$ |
30 |
|
|
$ |
163 |
|
|
$ |
3,675 |
|
Net income attributable to noncontrolling interest |
|
1 |
|
|
|
9 |
|
|
|
17 |
|
|
|
22 |
|
Net income from discontinued operations, net of tax |
|
— |
|
|
|
(18 |
) |
|
|
— |
|
|
|
(3,873 |
) |
Net income (loss) from continuing operations |
|
67 |
|
|
|
21 |
|
|
|
180 |
|
|
|
(176 |
) |
Restructuring and other(1) |
|
26 |
|
|
|
40 |
|
|
|
92 |
|
|
|
146 |
|
Depreciation, amortization and impairments(2) |
|
86 |
|
|
|
103 |
|
|
|
384 |
|
|
|
420 |
|
Other expense (income), net |
|
14 |
|
|
|
— |
|
|
|
(5 |
) |
|
|
(6 |
) |
Interest expense |
|
78 |
|
|
|
73 |
|
|
|
309 |
|
|
|
327 |
|
Income tax (benefit) expense |
|
(2 |
) |
|
|
5 |
|
|
|
25 |
|
|
|
13 |
|
Stock-based compensation |
|
33 |
|
|
|
23 |
|
|
|
118 |
|
|
|
69 |
|
Loss on debt financing transactions |
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
147 |
|
Gain on remeasurement of debt and other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(27 |
) |
Consolidated AEBITDA |
$ |
302 |
|
|
$ |
265 |
|
|
$ |
1,118 |
|
|
$ |
913 |
|
|
|
|
|
|
|
|
|
||||||||
Supplemental Business Segment Data |
|
|
|
|
|
|
|
||||||||
Business segments AEBITDA |
|
|
|
|
|
|
|
||||||||
Gaming |
$ |
245 |
|
|
$ |
215 |
|
|
$ |
918 |
|
|
$ |
767 |
|
SciPlay |
|
69 |
|
|
|
59 |
|
|
|
243 |
|
|
|
187 |
|
iGaming |
|
23 |
|
|
|
19 |
|
|
|
95 |
|
|
|
80 |
|
Total business segments AEBITDA |
|
337 |
|
|
|
293 |
|
|
|
1,256 |
|
|
|
1,034 |
|
Corporate and other(3) |
|
(35 |
) |
|
|
(28 |
) |
|
|
(138 |
) |
|
|
(121 |
) |
Consolidated AEBITDA |
$ |
302 |
|
|
$ |
265 |
|
|
$ |
1,118 |
|
|
$ |
913 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to Consolidated AEBITDA Margin |
|
|
|
|
|
|
|
||||||||
Consolidated AEBITDA |
$ |
302 |
|
|
$ |
265 |
|
|
$ |
1,118 |
|
|
$ |
913 |
|
Revenue |
|
770 |
|
|
|
682 |
|
|
|
2,902 |
|
|
|
2,512 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) margin from continuing operations |
|
9 |
% |
|
|
3 |
% |
|
|
6 |
% |
|
|
(7 |
)% |
Consolidated AEBITDA margin (Consolidated AEBITDA/Revenue) |
|
39 |
% |
|
|
39 |
% |
|
|
39 |
% |
|
|
36 |
% |
|
|
|
|
|
|
|
|
||||||||
(1) Refer to the Consolidated AEBITDA definition below for a description of items included in restructuring and other. |
|||||||||||||||
(2) Includes |
|||||||||||||||
(3) Includes amounts not allocated to the business segments (including corporate costs) and other non-operating expenses (income). |
|||||||||||||||
|
|||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||
|
Three Months Ended |
|
Year Ended |
||||
|
December 31, 2023 |
|
December 31, 2023 |
||||
Reconciliation of Net Income Attributable to L&W to Adjusted NPATA |
|
|
|
||||
Net income attributable to L&W |
$ |
66 |
|
|
$ |
163 |
|
Net income attributable to noncontrolling interest |
|
1 |
|
|
|
17 |
|
Net income from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
Net income from continuing operations |
|
67 |
|
|
|
180 |
|
Amortization of acquired intangibles and impairments(1) |
|
32 |
|
|
|
172 |
|
Restructuring and other(2) |
|
26 |
|
|
|
92 |
|
Other expense (income), net |
|
14 |
|
|
|
(5 |
) |
Loss on debt financing transactions |
|
— |
|
|
|
15 |
|
Income tax impact on adjustments(3) |
|
(30 |
) |
(66 |
) |
||
Adjusted NPATA |
$ |
109 |
|
|
$ |
388 |
|
|
|
|
|
||||
(1) Includes |
|||||||
(2) Refer to the Adjusted NPATA definition below for a description of items included in restructuring and other. |
|||||||
(3) Includes an adjustment to remove |
|||||||
|
|||||||||||||||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
December 31,
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
||||||||||
Gaming Business Segment Supplemental Financial Data: |
|
|
|
|
|
|
|
|
|
||||||||||
Revenue by Line of Business: |
|
|
|
|
|
|
|
|
|
||||||||||
Gaming operations |
$ |
168 |
|
|
$ |
157 |
|
|
$ |
166 |
|
|
$ |
661 |
|
|
$ |
635 |
|
Gaming machine sales |
|
205 |
|
|
|
156 |
|
|
|
172 |
|
|
|
708 |
|
|
|
522 |
|
Gaming systems |
|
71 |
|
|
|
73 |
|
|
|
71 |
|
|
|
268 |
|
|
|
255 |
|
Table products |
|
52 |
|
|
|
52 |
|
|
|
56 |
|
|
|
213 |
|
|
|
189 |
|
Total revenue |
$ |
496 |
|
|
$ |
438 |
|
|
$ |
465 |
|
|
$ |
1,850 |
|
|
$ |
1,601 |
|
Gaming Operations: |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Installed base at period end |
|
31,220 |
|
|
|
30,630 |
|
|
|
31,035 |
|
|
|
31,220 |
|
|
|
30,630 |
|
Average daily revenue per unit(1) |
$ |
47.91 |
|
|
$ |
45.39 |
|
|
$ |
48.64 |
|
|
$ |
47.86 |
|
|
$ |
45.99 |
|
International:(2) |
|
|
|
|
|
|
|
|
|
||||||||||
Installed base at period end |
|
22,327 |
|
|
|
27,126 |
|
|
|
22,442 |
|
|
|
22,327 |
|
|
|
27,126 |
|
Average daily revenue per unit |
$ |
16.01 |
|
|
$ |
13.80 |
|
|
$ |
14.01 |
|
|
$ |
15.14 |
|
|
$ |
13.51 |
|
Gaming Machine Sales: |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
4,783 |
|
|
|
5,099 |
|
|
|
4,640 |
|
|
|
18,500 |
|
|
|
16,890 |
|
International new unit shipments |
|
7,340 |
|
|
|
2,661 |
|
|
|
4,045 |
|
|
|
19,136 |
|
|
|
9,913 |
|
Total new unit shipments |
|
12,123 |
|
|
|
7,760 |
|
|
|
8,685 |
|
|
|
37,636 |
|
|
|
26,803 |
|
Average sales price per new unit |
$ |
15,477 |
|
|
$ |
18,047 |
|
|
$ |
18,104 |
|
|
$ |
17,229 |
|
|
$ |
17,462 |
|
Gaming Machine Unit Sales Components: |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Replacement units |
|
4,451 |
|
|
|
4,322 |
|
|
|
4,542 |
|
|
|
17,351 |
|
|
|
14,531 |
|
Casino opening and expansion units |
|
332 |
|
|
|
777 |
|
|
|
98 |
|
|
|
1,149 |
|
|
|
2,359 |
|
Total unit shipments |
|
4,783 |
|
|
|
5,099 |
|
|
|
4,640 |
|
|
|
18,500 |
|
|
|
16,890 |
|
International unit shipments: |
|
|
|
|
|
|
|
|
|
||||||||||
Replacement units |
|
7,270 |
|
|
|
2,565 |
|
|
|
3,262 |
|
|
|
16,641 |
|
|
|
9,647 |
|
Casino opening and expansion units |
|
70 |
|
|
|
96 |
|
|
|
783 |
|
|
|
2,495 |
|
|
|
266 |
|
Total unit shipments |
|
7,340 |
|
|
|
2,661 |
|
|
|
4,045 |
|
|
|
19,136 |
|
|
|
9,913 |
|
SciPlay Business Segment Supplemental Financial Data: |
|
|
|
|
|
|
|
|
|
||||||||||
Revenue by Platform: |
|
|
|
|
|
|
|
|
|
||||||||||
Mobile in-app purchases |
$ |
172 |
|
|
$ |
158 |
|
|
$ |
173 |
|
|
$ |
681 |
|
|
$ |
584 |
|
Web in-app purchases and other(3) |
|
32 |
|
|
|
24 |
|
|
|
23 |
|
|
|
96 |
|
|
|
87 |
|
Total revenue |
$ |
204 |
|
|
$ |
182 |
|
|
$ |
196 |
|
|
$ |
777 |
|
|
$ |
671 |
|
In-App Purchases: |
|
|
|
|
|
|
|
|
|
||||||||||
Mobile penetration(4) |
|
86 |
% |
|
|
90 |
% |
|
|
90 |
% |
|
|
89 |
% |
|
|
90 |
% |
Average MAU(5) |
|
5.5 |
|
|
|
5.7 |
|
|
|
5.7 |
|
|
|
5.7 |
|
|
|
6.0 |
|
Average DAU(6) |
|
2.2 |
|
|
|
2.2 |
|
|
|
2.2 |
|
|
|
2.2 |
|
|
|
2.3 |
|
ARPDAU(7) |
$ |
1.00 |
|
|
$ |
0.87 |
|
|
$ |
0.96 |
|
|
$ |
0.94 |
|
|
$ |
0.78 |
|
Average MPU(8) (in thousands) |
|
587 |
|
|
|
591 |
|
|
|
602 |
|
|
|
606 |
|
|
|
572 |
|
AMRPPU(9) |
$ |
113.73 |
|
|
$ |
99.16 |
|
|
$ |
106.61 |
|
|
$ |
104.82 |
|
|
$ |
94.58 |
|
Payer Conversion Rate(10) |
|
10.7 |
% |
|
|
10.4 |
% |
|
|
10.6 |
% |
|
|
10.6 |
% |
|
|
9.6 |
% |
iGaming Business Segment Supplemental Data: |
|
|
|
|
|
|
|
|
|
||||||||||
Wagers processed through Open Gaming System (in billions) |
$ |
21.6 |
|
|
$ |
19.1 |
|
|
$ |
20.2 |
|
|
$ |
82.8 |
|
|
$ |
71.9 |
|
(1) We refined |
|||||||||||||||||||
(2) Units exclude those related to game content licensing. |
|||||||||||||||||||
(3) Other primarily consists of advertising revenue which was not material for the periods presented. |
|||||||||||||||||||
(4) Mobile penetration is defined as the percentage of SciPlay revenue generated from mobile platforms. |
|||||||||||||||||||
(5) MAU = Monthly Active Users is a count of visitors to our sites during a month. An individual who plays multiple games or from multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the occurrence of multiple counting. |
|||||||||||||||||||
(6) DAU = Daily Active Users is a count of visitors to our sites during a day. An individual who plays multiple games or from multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the occurrence of multiple counting. |
|||||||||||||||||||
(7) ARPDAU = Average Revenue Per DAU is calculated by dividing revenue for a period by the DAU for the period by the number of days for the period. |
|||||||||||||||||||
(8) MPU = Monthly Paying Users is the number of individual users who made an in-game purchase during a particular month. |
|||||||||||||||||||
(9) AMRPPU = Average Monthly Revenue Per Paying User is calculated by dividing average monthly revenue by average MPUs for the applicable time period. |
|||||||||||||||||||
(10) Payer conversion rate is calculated by dividing average MPU for the period by the average MAU for the same period. |
|||||||||||||||||||
|
|||||||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||||||
|
As of December 31, |
||||||||||
|
|
2023 |
|
|
|
2022 |
|
||||
Consolidated AEBITDA |
$ |
1,118 |
|
|
$ |
913 |
|
||||
|
|||||||||||
Total debt |
$ |
3,874 |
|
|
$ |
3,894 |
|
||||
Add: Unamortized debt discount/premium and deferred financing costs, net |
|
44 |
|
|
|
47 |
|
||||
Less: Debt not requiring cash repayment and other |
|
(1 |
) |
|
|
(2 |
) |
||||
Principal face value of debt outstanding |
|
3,917 |
|
|
|
3,939 |
|
||||
Less: Cash and cash equivalents |
|
425 |
|
|
|
914 |
|
||||
Net debt |
$ |
3,492 |
|
|
$ |
3,025 |
|
||||
|
|||||||||||
Net debt leverage ratio |
|
3.1 |
|
|
|
3.3 |
|
||||
|
|||||||||||
|
|||||||||||||||
LIGHT & WONDER, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
Three Months Ended December 31, |
||||||||||||||
|
|
2023 |
|
|
2022 |
||||||||||
|
Consolidated |
|
Continuing
|
|
Discontinued
|
|
Combined(2) |
||||||||
Net cash provided by (used in) operating activities |
$ |
167 |
|
|
$ |
(79 |
) |
|
$ |
(8 |
) |
|
$ |
(87 |
) |
Less: Capital expenditures |
|
(60 |
) |
|
|
(58 |
) |
|
|
— |
|
|
|
(58 |
) |
Add: Payments on contingent acquisition considerations |
|
8 |
|
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
Less: Payments on license obligations |
|
(5 |
) |
|
|
(5 |
) |
|
|
— |
|
|
|
(5 |
) |
Less: Change in restricted cash impacting working capital |
|
(40 |
) |
|
|
(5 |
) |
|
|
— |
|
|
|
(5 |
) |
Free cash flow |
$ |
70 |
|
|
$ |
(140 |
) |
|
$ |
(8 |
) |
|
$ |
(148 |
) |
Supplemental cash flow information - Strategic Review and Related Costs Impacting Free Cash Flow: |
|
|
|
|
|
|
|
||||||||
Professional fees and services supporting strategic review and related activities (including SciPlay merger) and other |
$ |
16 |
|
|
|
|
|
|
$ |
25 |
|
||||
Income tax payments related to the Divestitures |
|
— |
|
|
|
|
|
|
|
176 |
|
||||
|
Year Ended December 31, |
||||||||||||||
|
|
2023 |
|
|
2022 |
||||||||||
|
Consolidated |
|
Continuing
|
|
Discontinued
|
|
Combined(2) |
||||||||
Net cash provided by (used in) operating activities |
$ |
590 |
|
|
$ |
(425 |
) |
|
$ |
44 |
|
|
$ |
(381 |
) |
Less: Capital expenditures |
|
(242 |
) |
|
|
(216 |
) |
|
|
(37 |
) |
|
|
(253 |
) |
Add: Payments on contingent acquisition considerations |
|
17 |
|
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
Less: Payments on license obligations |
|
(31 |
) |
|
|
(35 |
) |
|
|
(2 |
) |
|
|
(37 |
) |
Less: Change in restricted cash impacting working capital |
|
(43 |
) |
|
|
(4 |
) |
|
|
(6 |
) |
|
|
(10 |
) |
Free cash flow |
$ |
291 |
|
|
$ |
(673 |
) |
|
$ |
(1 |
) |
|
$ |
(674 |
) |
Supplemental cash flow information - Strategic Review and Related Costs Impacting Free Cash Flow: |
|
|
|
|
|
|
|
||||||||
Professional fees and services supporting strategic review and related activities (including ASX listing and SciPlay merger) and other |
$ |
25 |
|
|
|
|
|
|
$ |
97 |
|
||||
Income tax payments related to the Divestitures |
|
32 |
|
|
|
|
|
|
|
641 |
|
||||
Disposition and other closing expenses |
|
— |
|
|
|
|
|
|
|
80 |
|
||||
Payments related to April 2022 refinancing |
|
— |
|
|
|
|
|
|
|
5 |
|
||||
SciPlay legal settlement payment |
|
— |
|
|
|
|
|
|
|
25 |
|
||||
|
|
|
|
|
|
|
|
||||||||
(1) Free cash flow from discontinued operations, a non-GAAP measure, is derived based on the historical records and includes only those direct cash flows that are allocated to discontinued operations. See below for further description and disclaimers associated with this non-GAAP measure. |
|||||||||||||||
(2) Combined free cash flow consists of Free cash flow (representing Free cash flow from continuing operations) and Free cash flow from discontinued operations. Refer to non-GAAP financial measure definitions below for further details. |
|||||||||||||||
Discontinued Operations
We sold our former Lottery business to Brookfield Business Partners L.P. during the second quarter of 2022. We sold our former Sports Betting business to Endeavor Operating Company, LLC, a subsidiary of Endeavor Group Holdings, Inc., in a cash and stock transaction completed during the third quarter of 2022. Accordingly, the prior period financial results for these divested businesses are presented as discontinued operations in accordance with Accounting Standard Codification 205-20, Presentation of Financial Statements - Discontinued Operations. We report our continuing operations in three business segments—Gaming, SciPlay and iGaming—representing our different products and services.
Non-GAAP Financial Measures
Management uses the following non-GAAP financial measures in conjunction with GAAP financial measures: Consolidated AEBITDA (representing continuing operations), Consolidated AEBITDA margin, Free cash flow (representing continuing operations), Free cash flow from discontinued operations, Combined free cash flow, Net debt, Net debt leverage ratio, and Adjusted NPATA (each, as described more fully below). These non-GAAP financial measures are presented as supplemental disclosures. They should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP, and should be read in conjunction with the Company’s financial statements filed with the SEC. The non-GAAP financial measures used by the Company may differ from similarly titled measures presented by other companies.
Specifically, Management uses Consolidated AEBITDA to, among other things: (i) monitor and evaluate the performance of the Company’s continuing operations; (ii) facilitate Management’s internal and external comparisons of the Company’s consolidated historical operating performance; and (iii) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets.
In addition, Management uses Consolidated AEBITDA and Consolidated AEBITDA margin to facilitate its external comparisons of the Company’s consolidated results to the historical operating performance of other companies that may have different capital structures and debt levels.
Management uses Net debt and Net debt leverage ratio in monitoring and evaluating the Company’s overall liquidity, financial flexibility and leverage.
Following our ASX listing, Management introduced usage of Adjusted NPATA, a non-GAAP financial measure, which is widely used to measure the performance as well as a principal basis for valuation of gaming and other companies listed on the ASX, and which we now present on a supplemental basis.
As described in this earning release, the Company sold its former Lottery business and Sports Betting business and as such, historical financial information for these divested businesses is classified as discontinued operations, as described above. Management believes that Combined free cash flow is useful during the period until the disposition occurred as it provided Management and investors with information regarding the Company’s combined financial condition under the structure at the time, including for prior period comparisons, as the Company transformed its strategy subsequent to the Divestitures.
Additionally, Combined free cash flow provided greater visibility into cash available for the Company to use in investing and financing decisions as that cash flow was available for such decisions.
Management believes that these non-GAAP financial measures are useful as they provide Management and investors with information regarding the Company’s financial condition and operating performance that is an integral part of Management’s reporting and planning processes. In particular, Management believes that Consolidated AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that Management believes are less indicative of the ongoing underlying performance of continuing operations (as more fully described below) and are better evaluated separately. Management believes that Free cash flow and Combined free cash flow provide useful information regarding the Company’s liquidity and its ability to service debt and fund investments.
Management also believes that Free cash flow and Combined free cash flow are useful for investors because they provide investors with important perspectives on the cash available for debt repayment and other strategic measures, after making necessary capital investments in property and equipment, necessary license payments to support the ongoing business operations and adjustments for changes in restricted cash impacting working capital.
Additionally, Management believes that Free cash flow from discontinued operations provides useful information regarding the Company’s operations as well as the impact of the discontinued businesses on the overall financial results for the prior periods presented as they remained under the structure of the Company for those periods. This non-GAAP measure is derived based on the historical records and includes only those direct costs that are allocated to discontinued operations and as such does not include all of the expenses that would have been incurred by these businesses as a standalone company or other Corporate and shared allocations and such differences might be material.
Management believes Adjusted NPATA is useful for investors because it provides investors with additional perspective on performance, as the measure eliminates the effects of amortization of acquired intangible assets, restructuring, transaction, integration, certain other items, and the income tax impact on such adjustments, which Management believes are less indicative of the ongoing underlying performance of continuing operations and are better evaluated separately. Adjusted NPATA is widely used to measure performance of gaming and other companies listed on the ASX.
Consolidated AEBITDA (representing AEBITDA from continuing operations)
Consolidated AEBITDA, as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company’s continuing operations and is reconciled to net income (loss) from continuing operations as the most directly comparable GAAP measure, as set forth in the schedule titled “Reconciliation of Net Income Attributable to L&W to Consolidated AEBITDA.” Consolidated AEBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company's financial statements filed with the SEC. Consolidated AEBITDA may differ from similarly titled measures presented by other companies.
Consolidated AEBITDA is reconciled to Net income attributable to L&W and includes the following adjustments: (1) Net income attributable to noncontrolling interest; (2) Net income from discontinued operations, net of tax; (3) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) Management restructuring and related costs; (iii) restructuring and integration (including costs associated with strategic review, rebranding, divestitures and ongoing separation activities and related activities); (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs and other unusual items; (4) Depreciation, amortization and impairment charges and Goodwill impairments; (5) Loss on debt financing transactions; (6) Change in fair value of investments and Gain on remeasurement of debt and other; (7) Interest expense; (8) Income tax (benefit) expense; (9) Stock-based compensation; and (10) Other expense (income), net, including foreign currency gains or losses and earnings from equity investments. AEBITDA is presented exclusively as our segment measure of profit or loss.
Consolidated AEBITDA Margin
Consolidated AEBITDA margin, as used herein, represents our Consolidated AEBITDA (as defined above) calculated as a percentage of consolidated revenue. Consolidated AEBITDA margin is a non-GAAP financial measure that is presented as a supplemental disclosure for illustrative purposes only and is reconciled to net income (loss) from continuing operations, the most directly comparable GAAP measure, in a schedule above.
Free Cash Flow (representing free cash flow from continuing operations)
Free cash flow, as used herein, represents net cash provided by operating activities from continuing operations less total capital expenditures, less payments on license obligations, plus payments on contingent acquisition considerations and adjusted for changes in restricted cash impacting working capital. Free cash flow is a non-GAAP financial measure that is presented as a supplemental disclosure for illustrative purposes only and is reconciled to net cash provided by operating activities, the most directly comparable GAAP measure, in the schedule above.
Free Cash Flow from Discontinued Operations
Free cash flow from discontinued operations, as used herein, represents net cash provided by operating activities from discontinued operations less total capital expenditures, less payments on license obligations and adjusted for changes in restricted cash impacting working capital. Free cash flow from discontinued operations is a non-GAAP financial measure that is presented as a supplemental disclosure for illustrative purposes only and is reconciled to net cash provided by operating activities from discontinued operations, the most directly comparable GAAP measure, in a schedule above.
Combined Free Cash Flow
Combined free cash flow, as used herein, represents a non-GAAP financial measure that combines Free cash flow (representing our continuing operations) and Free cash flow from discontinued operations and is presented as a supplemental disclosure for illustrative purposes only.
Net Debt and Net Debt Leverage Ratio
Net debt is defined as total principal face value of debt outstanding, the most directly comparable GAAP measure, less cash and cash equivalents. Principal face value of debt outstanding includes the face value of debt issued under Senior Secured Credit Facilities and Senior Notes, which are described in Note 15 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, but it does not include other long term obligations primarily comprised of certain revenue transactions presented as debt in accordance with ASC 470. Net debt leverage ratio, as used herein, represents Net debt divided by Consolidated AEBITDA. The forward-looking non-GAAP financial measure targeted net debt leverage ratio is presented on a supplemental basis and does not reflect Company guidance. We are not providing a forward-looking quantitative reconciliation of targeted net debt leverage ratio to the most directly comparable GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the relevant period.
Adjusted NPATA
Adjusted NPATA, as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company’s continuing operations and is reconciled to net income from continuing operations as the most directly comparable GAAP measure, as set forth in the schedule titled “Reconciliation of Net Income Attributable to L&W to Adjusted NPATA.” Adjusted NPATA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company's financial statements filed with the SEC. Adjusted NPATA may differ from similarly titled measures presented by other companies.
Adjusted NPATA is reconciled to Net income from continuing operations and includes the following adjustments: (1) Amortization of acquired intangible assets; (2) non-cash asset and goodwill impairments; (3) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) Management restructuring and related costs; (iii) restructuring and integration (including costs associated with strategic review, rebranding, divestitures and ongoing separation activities and related activities); (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs and other unusual items; (4) Loss on debt financing transactions; (5) Change in fair value of investments and Gain on remeasurement of debt and other; (6) Income tax impact on adjustments; and (7) Other expense (income), net, including foreign currency gains or losses and earnings from equity investments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227715472/en/
Media Relations
Andy Fouché +1 206-697-3678
Vice President, Corporate Communications
media@lnw.com
Investor Relations
Nick Zangari +1 702-301-4378
Senior Vice President, Investor Relations
ir@lnw.com
Source: Light & Wonder, Inc.
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