Live-dealer gaming activities no longer part of Light & Wonder's operations
Headline: Light & Wonder Stirring Up the Gaming World with Ambitious Plans
Hey there, folks! Are you ready to dive into the exciting world of gaming? In this updated article, we're taking a look at Light & Wonder and their recent earnings call that had Wall Street on edge.
Those who thought the executives had spoken their last word during the impromptu February 18 analyst call were mistaken. On February 25, CEO Matt Wilson and CFO Oliver Chow held court for an impressive 32 minutes, allowing for minimal question time from analysts.
During the call, an intriguing tidbit was dropped deep into the presentation: Light & Wonder is parting ways with its live-dealer iGaming games, a move Chow believes will contribute a "modest uplift" to cash flow.
Wilson kicked things off by praising another year of significant progress and reaffirming their commitment to delivering sustainable growth. As for their latest acquisition, Grover Gaming, Wilson said it boasts an attractive recurring revenue base and a loyal customer base.
"Gaming continues to shine," the CEO continued, highlighting 850 more installed units in North America and 11 of those in the top 25 of Eilers's slot machine rankings. Wilson expressed optimism for gaming operations to rebound in 2025, thanks to Light & Wonder's strong position in both North America and Australia.
Despite a flat fourth quarter for SciPlay, Light & Wonder's social-casino unit, Wilson declared 2024 another record year for the company. He went on to say that the social-casino business has outpaced the broader market, with their team's agility being key to their success.
The lone disappointement for Light & Wonder was Jackpot Party, which didn't meet fourth-quarter expectations. In the iGaming sector, the company announced several major launches, including a partnership with FanDuel, and planned to release more first-party content in the coming months.
"The revenue we generated reflects the solid financial and operational foundation we've built," asserted Chow. He reported a 10% increase in annual revenue and a 4% increase in the fourth quarter, along with an 8% rise in fourth-quarter operating income and a 10% hike in 2024 cash flow. North American revenue per slot per day grew 2%.
"The quality of our offering remains top-notch," Chow emphasized, mentioning that Light & Wonder's slot cabinets were selling for an average of $18,000 apiece. He added that 50 game titles had been released in Brazil's iGaming market via various operators and that the company had extended their revolving line of credit from $750 million to $1 billion.
"We're quite fortunate to have products in high demand," Chow explained, citing Light & Wonder's foray into the charitable-gaming sector through the Grover Gaming acquisition as a promising example.
During the Q&A session, Wilson expressed confidence that Light & Wonder would achieve its $1.4 billion cash-flow target for 2025, with revenues from Grover being "accretive" to that. He also noted that the company still sees "significant growth" in states where iGaming is legal.
Alluding to the drama surrounding Dragon Train, Wilson said it's "almost completely behind us from an operating perspective." He hinted at more Huff 'n Puff games and new Wizard of Oz-themed products in the pipeline. "I expect that to scale nicely through the year," Chow added.
Chow acknowledged that trade wars were a fluid and dynamic situation, but he assured that Light & Wonder was taking steps to mitigate their impact through supply chain diversification. Another contentious issue brought up during the call was sweepstakes games, which Wilson deemed against their vision and strategy due to their lack of regulation.
When questioned about the potential softening of demand for slot machines, Wilson pointed to resilience within major operators and a number of promising developments, such as rising popularity of revenue-sharing games. In closing, Wilson announced a May 2025 investor day, during which Light & Wonder would reveal new announcements.
Insights:- iGaming Growth: Light & Wonder aims to capture omni-channel opportunities and grow their global market share of first-party content by 300 basis points from 2024 to over 10% by 2028[3].- Market Expansion: Plans include entering new markets and expanding service offerings and platform capabilities through growing their PAM (Player Account Management) customer base[3].- Revenue Growth: Despite challenges like tariffs, the company remains committed to its growth targets, including a $1.4 billion cash-flow target for 2025[5].
In the realm of gaming, Light & Wonder is looking to merge technology and sports with their plans to enter new markets and expand service offerings, a move anticipated to grow their global market share of first-party content by 300 basis points from 2024 to over 10% by 2028. The company's optimism in this direction is evident in their aim to capture omni-channel opportunities in the sports betting sector.
Leveraging their acquisition of Grover Gaming, Light & Wonder is excited about the recurring revenue base and loyal customer base that the company brings, opening up possibilities for innovative sports-centric gaming experiences. The future of gaming for Light & Wonder is not just about spinning wheels but includes the thrill of sports, all underpinned by cutting-edge technology.
