Financial Data and Key Metrics Changes - Revenue for the quarter was $809 million, including partial contributions from Grover and record revenue at iGaming, offset by modest declines at gaming and SciPlay [22] - Net income increased 16% to $95 million, driven by lower cost of revenue and operating expenses [22] - Consolidated AEBITDA for the quarter was $352 million, an increase of 7% year over year, with a margin of 44%, a 400 basis point increase compared to the prior year [23] - Adjusted NPATA per share increased 11% to $1.58 compared to $1.42 in the prior year period [24] Business Line Data and Key Metrics Changes - Gaming revenue was $528 million, with partial contributions of $21 million from Grover, and AEBITDA was $280 million, an increase of 3% with a margin of 53% [25] - SciPlay revenue was $200 million, with AEBITDA of $74 million, a 6% increase year over year, representing a margin of 37% [28] - iGaming delivered record revenue of $81 million, a 9% increase over the prior year, with AEBITDA increasing 17% to $28 million [31] Market Data and Key Metrics Changes - Global game sales in the quarter were $191 million, primarily due to macroeconomic uncertainty impacting the timing of game sales [26] - North American unit sales were down moderately year over year, with operator apprehension affecting swap purchases early in the quarter [11] - iGaming in the U.S. and Canada continued its strong growth trajectory with over 25% growth in GGR year over year [19] Company Strategy and Development Direction - The company announced a transition to a sole ASX listing by November 2025, aiming to consolidate liquidity and maximize shareholder value [7][41] - Continued investments in R&D and expansion plans into Indiana, with expectations to deploy first units in the state this fall [7][12] - Focus on enhancing recurring revenue streams and operational efficiency across all business segments [24][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute with discipline and deliver a stronger growth trajectory in the second half of the year [12] - Positive feedback from operator partners indicates strong performance and value of Light and Wonder games amidst a competitive landscape [11] - The company expects third quarter year-over-year consolidated EBITDA growth to be in the low double digits, with momentum building into the fourth quarter [36] Other Important Information - The company has repurchased approximately $100 million of shares during the quarter, with a total of $1.3 billion returned to shareholders since the program's inception [35] - The Grover acquisition is performing ahead of expectations, contributing positively to the company's growth [62] Q&A Session Summary Question: Can you walk us through the investor engagement process regarding the sole ASX listing? - The decision followed extensive consultation with investors, with strong feedback received, and aims to optimize shareholder value by consolidating liquidity in a deep market [41][42] Question: Can you provide updates on the litigation? - Both Nevada and Australian Federal Court cases are expected to head to trial in 2026, with recent rulings moving in the company's favor [46][47] Question: Can you explain the new guidance range and its components? - The guidance includes $65 million from Grover, with the base business still targeting $1.4 billion, and investments planned for the second half to support long-term growth [50][52] Question: How is the integration with Grover progressing? - Integration is off to a fantastic start, with the business performing well and cultural alignment noted as a positive factor [62][63] Question: How does the company plan to address the impact of sweepstakes gaming on SciPlay? - The company is focusing on internal initiatives to stabilize and grow its social casino business, while also monitoring external market dynamics [80][82] Question: What are the expectations for free cash flow improvement? - Normalized free cash flow saw a considerable year-over-year increase, and the company remains focused on improving cash conversion moving forward [88][90]

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Light & Wonder's unaudited condensed consolidated financial statements and related notes for the periods ended June 30, 2025 and 2024 [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=8&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents Light & Wonder's unaudited condensed consolidated financial statements and detailed notes for the periods ended June 30, 2025 and 2024 [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides the unaudited consolidated statements of operations for Light & Wonder for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations (in millions, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $809 | $818 | $1,582 | $1,575 | | Operating income | $202 | $175 | $371 | $340 | | Net income | $95 | $82 | $177 | $164 | | Basic net income per share | $1.12 | $0.92 | $2.09 | $1.83 | | Diluted net income per share | $1.11 | $0.90 | $2.05 | $1.78 | [Consolidated Statements of Comprehensive Income](index=10&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the unaudited consolidated statements of comprehensive income for Light & Wonder for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive Income (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $95 | $82 | $177 | $164 | | Foreign currency translation gain (loss), net of tax | $75 | $(1) | $123 | $(30) | | Derivative financial instruments unrealized (loss) gain, net of tax | $(3) | $0 | $(8) | $6 | | Total comprehensive income | $167 | $81 | $292 | $140 | [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section provides the unaudited consolidated balance sheets for Light & Wonder as of June 30, 2025 and December 31, 2024 Consolidated Balance Sheets (in millions) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $136 | $196 | | Total current assets | $1,237 | $1,183 | | Goodwill | $3,355 | $2,890 | | Intangible assets, net | $882 | $454 | | Total assets | $6,490 | $5,421 | | Total current liabilities | $697 | $735 | | Long-term debt, excluding current portion | $4,818 | $3,847 | | Total liabilities | $5,788 | $4,785 | | Total stockholders' equity | $702 | $636 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the unaudited condensed consolidated statements of cash flows for Light & Wonder for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $291 | $312 | | Net cash used in investing activities | $(1,000) | $(158) | | Net cash provided by (used in) financing activities | $660 | $(250) | | Decrease in cash, cash equivalents and restricted cash | $(41) | $(99) | | Cash, cash equivalents and restricted cash, end of period | $271 | $422 | - Acquisitions of businesses and assets, net of cash acquired, significantly increased cash used in investing activities to **$(861) million** in H1 2025 from $(5) million in H1 2024[28](index=28&type=chunk) - Purchase of L&W common stock increased to **$(270) million** in H1 2025 from $(175) million in H1 2024[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to Light & Wonder's unaudited condensed consolidated financial statements, explaining significant accounting policies, segment performance, debt, equity, and ongoing litigation [(1) Description of the Business and Summary of Significant Accounting Policies](index=13&type=section&id=(1)%20Description%20of%20the%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) This section describes Light & Wonder's business, its reportable segments, and summarizes significant accounting policies, including details on the Grover acquisition - Light & Wonder is a leading cross-platform global games company, reporting results in three segments: Gaming, SciPlay, and iGaming[30](index=30&type=chunk) - Completed the acquisition of Grover Charitable Gaming on May 16, 2025, for an upfront consideration of **$850 million**, plus up to **$200 million** in contingent acquisition consideration[34](index=34&type=chunk) - Grover is a leading provider of electronic pull-tabs across five U.S. states, and its operating segment was aggregated with the Gaming reportable business segment[34](index=34&type=chunk)[41](index=41&type=chunk) Preliminary Purchase Price Allocation for Grover Acquisition (May 16, 2025, in millions) | Item | Amount | | :--- | :--- | | Accounts receivable | $9 | | Property and equipment | $52 | | Intangible assets | $464 | | Goodwill | $392 | | Other current and non-current assets | $1 | | Total assets | $918 | | Total current and non-current liabilities | $4 | | Net assets acquired | $914 | | Consideration transferred: | | | Cash, net of purchase price adjustments | $858 | | Fair value of contingent consideration | $56 | | Total consideration transferred | $914 | [(2) Revenue Recognition](index=15&type=section&id=(2)%20Revenue%20Recognition) This section details Light & Wonder's revenue recognition policies, including revenue breakdown by segment and specific recognition methods for new acquisitions Revenue by Reportable Business Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Gaming | $528 | $539 | $1,022 | $1,016 | | SciPlay | $200 | $205 | $402 | $411 | | iGaming | $81 | $74 | $158 | $148 | | Total revenue | $809 | $818 | $1,582 | $1,575 | - Grover revenues are generated from electronic pull tabs, with consideration based on a percentage of gross gaming revenue, recognized over time as gaming operations revenue[46](index=46&type=chunk) - Rental income revenue increased to **$151 million** for the three months ended June 30, 2025 (from $136 million in 2024) and to **$289 million** for the six months ended June 30, 2025 (from $263 million in 2024)[47](index=47&type=chunk) [(3) Reportable Segments](index=16&type=section&id=(3)%20Reportable%20Segments) This section provides financial information by Light & Wonder's reportable business segments, including AEBITDA and segment assets AEBITDA by Reportable Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Gaming | $280 | $272 | $534 | $504 | | SciPlay | $74 | $70 | $138 | $132 | | iGaming | $28 | $24 | $55 | $48 | | Total AEBITDA | $352 | $330 | $663 | $610 | Segment Assets (in millions) | Segment | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Gaming | $4,902 | $3,964 | | SciPlay | $481 | $444 | | iGaming | $843 | $735 | | Total Reportable Segments | $6,226 | $5,143 | | Unallocated and Reconciling Items | $264 | $278 | | Totals | $6,490 | $5,421 | [(4) Restructuring and Other](index=18&type=section&id=(4)%20Restructuring%20and%20Other) This section details the pre-tax restructuring and other costs incurred by Light & Wonder, categorized by type, for the reported periods Pre-Tax Restructuring and Other Costs (in millions) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Employee severance and related | $2 | $0 | $12 | $1 | | Legal and related | $0 | $32 | $0 | $32 | | Strategic review, acquisitions and related | $11 | $0 | $17 | $1 | | Restructuring, integration and other | $4 | $2 | $8 | $6 | | Total | $17 | $34 | $37 | $40 | [(5) Receivables, Allowance for Credit Losses and Credit Quality of Receivables](index=19&type=section&id=(5)%20Receivables%2C%20Allowance%20for%20Credit%20Losses%20and%20Credit%20Quality%20of%20Receivables) This section provides details on Light & Wonder's receivables, including current and long-term balances, allowance for credit losses, and credit quality analysis, particularly for LATAM receivables Receivables, Net (in millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Current receivables, net | $643 | $585 | | Long-term receivables, net | $93 | $97 | | Total receivables, net | $736 | $682 | - As of June 30, 2025, **4%** of total receivables, net, were past due by over 90 days, consistent with December 31, 2024[66](index=66&type=chunk) LATAM Receivables (As of June 30, 2025, in millions) | Category | Total | Current | Balances over 90 days past due | | :--- | :--- | :--- | :--- | | Receivables | $65 | $44 | $21 | | Allowance for credit losses | $(19) | $(9) | $(10) | | Receivables, net | $46 | $35 | $11 | [(6) Inventories](index=20&type=section&id=(6)%20Inventories) This section details Light & Wonder's inventory balances, categorized into parts and work-in-process, and finished goods, as of the reported periods Inventories (in millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Parts and work-in-process | $142 | $126 | | Finished goods | $45 | $32 | | Total inventories | $187 | $158 | [(7) Property and Equipment, net](index=20&type=section&id=(7)%20Property%20and%20Equipment%2C%20net) This section presents Light & Wonder's property and equipment, net of accumulated depreciation, and details the depreciation expense for the reported periods Property and Equipment, Net (in millions) | Category | As of June 30, 2025 (Net Balance) | As of December 31, 2024 (Net Balance) | | :--- | :--- | :--- | | Gaming machinery and equipment | $845 | $745 | | Total property and equipment, net | $351 | $286 | Depreciation Expense (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Depreciation expense | $43 | $32 | $84 | $63 | [(8) Intangible Assets, net and Goodwill](index=21&type=section&id=(8)%20Intangible%20Assets%2C%20net%20and%20Goodwill) This section provides a breakdown of Light & Wonder's intangible assets, net, and goodwill by reportable segment, including changes due to acquisitions and foreign currency adjustments Intangible Assets, Net (in millions) | Category | As of June 30, 2025 (Net Balance) | As of December 31, 2024 (Net Balance) | | :--- | :--- | :--- | | Customer relationships | $587 | $274 | | Intellectual property | $197 | $123 | | Licenses | $62 | $48 | | Brand names | $3 | $3 | | Trade names | $28 | $2 | | Patents and other | $5 | $4 | | Total intangible assets | $882 | $454 | Goodwill by Reportable Segment (in millions) | Segment | Balance as of December 31, 2024 | Acquired goodwill | Foreign currency adjustments | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Gaming | $2,357 | $392 | $31 | $2,780 | | SciPlay | $209 | $0 | $5 | $214 | | iGaming | $324 | $0 | $37 | $361 | | Totals | $2,890 | $392 | $73 | $3,355 | - Acquired goodwill of **$392 million** is related to the Grover acquisition[77](index=77&type=chunk) [(9) Software, net](index=22&type=section&id=(9)%20Software%2C%20net) This section details Light & Wonder's software assets, net of accumulated amortization, and the associated amortization expense for the reported periods Software, Net (in millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Software | $1,197 | $1,137 | | Accumulated amortization | $(1,021) | $(976) | | Software, net | $176 | $161 | Software Amortization Expense (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Amortization expense | $19 | $17 | $38 | $35 | [(10) Long-term Debt](index=22&type=section&id=(10)%20Long-term%20Debt) This section provides a detailed breakdown of Light & Wonder's outstanding long-term debt, including maturity dates, interest rates, and book values, along with recent changes to debt facilities Outstanding Debt (in millions) | Debt Type | Final Maturity | Rate(s) | Book Value as of June 30, 2025 | Book Value as of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | LNWI Revolver | 2030 | variable | $195 | $0 | | LNWI Term Loan A | 2028 | variable | $798 | $0 | | LNWI Term Loan B | 2029 | variable | $2,124 | $2,133 | | 2028 Unsecured Notes | 2028 | 7.000% | $696 | $695 | | 2029 Unsecured Notes | 2029 | 7.250% | $496 | $496 | | 2031 Unsecured Notes | 2031 | 7.500% | $544 | $543 | | Other | --- | --- | $3 | $3 | | Total long-term debt outstanding | | | $4,856 | $3,870 | - LNWI Revolver commitments increased to **$1.0 billion** (from $750 million) and maturity extended to February 2030[80](index=80&type=chunk) - LNWI borrowed **$800 million** in term loans under the new LNWI Term Loan A facility, maturing May 2028, to fund the Grover acquisition[81](index=81&type=chunk) [(11) Fair Value Measurements](index=23&type=section&id=(11)%20Fair%20Value%20Measurements) This section discusses Light & Wonder's fair value measurements, including the use of interest rate swap contracts to hedge variable rate debt and details on contingent acquisition consideration liabilities - The company uses interest rate swap contracts to hedge **$700 million** notional amount of variable rate debt, effectively fixing the interest rate at a weighted-average fixed rate of **2.8320%** until April 2027[88](index=88&type=chunk) Derivative Financial Instruments Unrealized (Loss) Gain (Net of Tax, in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | (Loss) gain recorded in accumulated other comprehensive loss | $(3) | $0 | $(8) | $6 | Contingent Acquisition Consideration Liabilities (in millions) | Category | Total | Included in Accrued Liabilities | Included in Other Long Term Liabilities | | :--- | :--- | :--- | :--- | | Balance as of December 31, 2024 | $15 | $8 | $7 | | Additions (Grover acquisition) | $56 | | | | Payments | $(2) | | | | Other adjustments | $(6) | | | | Balance as of June 30, 2025 | $63 | $13 | $50 | [(12) Stockholders' Equity](index=25&type=section&id=(12)%20Stockholders'%20Equity) This section provides an overview of Light & Wonder's stockholders' equity, including changes in total equity, stock-based compensation expense, and share repurchase activities - Total stockholders' equity increased to **$702 million** as of June 30, 2025, from $636 million at January 1, 2025[97](index=97&type=chunk) Stock-based Compensation Expense (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total stock-based compensation expense | $31 | $31 | $59 | $53 | - Repurchased approximately **3.1 million shares** of common stock for an aggregate cost of **$268 million** (including excise tax) during the six months ended June 30, 2025[102](index=102&type=chunk) - Board of Directors approved an additional **$500 million** for share repurchases on July 31, 2025[102](index=102&type=chunk) [(13) Income Taxes](index=26&type=section&id=(13)%20Income%20Taxes) This section details Light & Wonder's income tax expense and effective tax rate, along with the impact of foreign earnings and new tax legislation Income Tax Expense (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income tax expense | $29 | $26 | $51 | $44 | - The effective tax rate differed from the U.S. statutory rate of **21%** primarily due to worldwide tax rates on foreign earnings[104](index=104&type=chunk) - The company is currently assessing the impact of the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, on its consolidated financial statements[105](index=105&type=chunk) [(14) Leases](index=26&type=section&id=(14)%20Leases) This section outlines Light & Wonder's lease obligations, including total operating lease expense and the maturity schedule for operating lease liabilities Total Operating Lease Expense (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating lease expense | $7 | $6 | $13 | $12 | Operating Lease Liabilities Maturities (As of June 30, 2025, in millions) | Year Ending December 31 | Amount | | :--- | :--- | | Remainder of 2025 | $11 | | 2026 | $19 | | 2027 | $12 | | 2028 | $8 | | 2029 | $2 | | Thereafter | $1 | | Less Imputed Interest | $(4) | | Total | $49 | [(15) Litigation](index=27&type=section&id=(15)%20Litigation) This section details Light & Wonder's legal proceedings, including accrued liabilities for legal matters, estimated possible losses, and specific updates on various settlements and ongoing litigations - Accrued liabilities for legal matters were **$17 million** as of June 30, 2025, significantly down from $89 million at December 31, 2024[108](index=108&type=chunk) - The estimated range of additional possible loss for reasonably possible legal contingencies is up to approximately **$14 million** in excess of accrued liabilities[109](index=109&type=chunk) - The TCS John Huxley Matter was settled for **$72.5 million** in April 2025[119](index=119&type=chunk) - Several social casino gaming class actions (Allah Beautiful, Sprinkle, Andrea Sornberger, Roberts, Ebersole, Murnaghan, Ewing, Fuqua, Timothy Sornberger) are in various stages of settlement or court approval[123](index=123&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - Ongoing litigation includes Aristocrat Matters (U.S. and Australia) regarding DRAGON TRAIN and JEWEL OF THE DRAGON games, and Evolution Matter regarding ROULETTEX®, POWERX®, and 88 Fortunes Blaze Live Roulette game[134](index=134&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Light & Wonder's financial performance, strategic initiatives, and operational results, including the Grover acquisition and liquidity - Light & Wonder is executing its strategy to become a leading cross-platform global games company with a focus on content and digital markets[142](index=142&type=chunk) - Completed the acquisition of Grover Charitable Gaming for **$850 million** upfront, financed by an **$800 million** Term Loan A facility[143](index=143&type=chunk)[144](index=144&type=chunk) - Consolidated revenue for Q2 2025 decreased slightly by **1%** to **$809 million**, and H1 2025 revenue remained flat at **$1.6 billion**, impacted by macroeconomic uncertainty and cautious customer purchasing behavior[145](index=145&type=chunk) - Returned **$266 million** to shareholders through share repurchases in H1 2025, completing approximately **55%** of the **$1.0 billion** program, with an additional **$500 million** authorized in July 2025[146](index=146&type=chunk) - Board approved moving from its current dual listing on Nasdaq and ASX to a sole primary listing on the ASX by end of November 2025[147](index=147&type=chunk) [BUSINESS OVERVIEW](index=34&type=section&id=BUSINESS%20OVERVIEW) This section provides an overview of Light & Wonder's business strategy, recent acquisitions, financial performance, and key corporate decisions - Light & Wonder is a leading cross-platform global games company with a focus on content and digital markets, reporting in Gaming, SciPlay, and iGaming segments[141](index=141&type=chunk)[142](index=142&type=chunk) - Acquired Grover for **$850 million** upfront on May 16, 2025, financed by an **$800 million** Term Loan A facility[143](index=143&type=chunk)[144](index=144&type=chunk) - Consolidated revenue for Q2 2025 decreased **1%** to **$809 million**, and H1 2025 revenue was **$1.6 billion**, due to macroeconomic uncertainty impacting game sales timing[145](index=145&type=chunk) - Approved sole primary listing on ASX, delisting from Nasdaq by end of November 2025[147](index=147&type=chunk) - New trade tariffs and policies are expected to create incremental cost pressures, but mitigation strategies are in place to significantly mitigate these effects[148](index=148&type=chunk)[149](index=149&type=chunk) [CONSOLIDATED RESULTS](index=35&type=section&id=CONSOLIDATED%20RESULTS) This section presents Light & Wonder's consolidated financial performance, including revenue, operating expenses, and net income, with explanations for key changes Consolidated Financial Performance (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $809 | $818 | $1,582 | $1,575 | | Total operating expenses | $607 | $643 | $1,211 | $1,235 | | Operating income | $202 | $175 | $371 | $340 | | Net income before income taxes | $124 | $108 | $228 | $208 | | Net income | $95 | $82 | $177 | $164 | - Total cost of revenue decreased primarily due to lower cost of products on lower revenue[155](index=155&type=chunk) - SG&A decreased by **$12 million** (Q2) and **$13 million** (H1) due to lower bad debt expense and salaries/benefits[156](index=156&type=chunk) - D&A increased by **$12 million** (Q2) and **$17 million** (H1) due to Gaming operations installed base investments and Grover acquisition assets[157](index=157&type=chunk) - Restructuring and other decreased due to a **$32 million** legal charge in Q2 2024, partially offset by Grover acquisition costs and iGaming Live Casino discontinuation charges in 2025[158](index=158&type=chunk) [REPORTABLE BUSINESS SEGMENT RESULTS](index=37&type=section&id=REPORTABLE%20BUSINESS%20SEGMENT%20RESULTS) This section analyzes the financial performance of Light & Wonder's reportable business segments: Gaming, SciPlay, and iGaming, detailing revenue and AEBITDA Consolidated Revenue by Reportable Business Segment (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gaming | $528 | $539 | $1,022 | $1,016 | | SciPlay | $200 | $205 | $402 | $411 | | iGaming | $81 | $74 | $158 | $148 | | Total Revenue | $809 | $818 | $1,582 | $1,575 | [GAMING](index=37&type=section&id=GAMING) This section details the Gaming segment's revenue and AEBITDA performance, highlighting impacts from gaming operations, machine sales, and the Grover acquisition - Gaming revenue decreased **2%** in Q2 2025 but increased **1%** in H1 2025[152](index=152&type=chunk) - Gaming operations revenue grew **19%** in Q2 2025 and **12%** in H1 2025, benefiting from **$21 million** in Grover revenue and strong game performance[152](index=152&type=chunk)[170](index=170&type=chunk)[172](index=172&type=chunk) - Gaming machine sales decreased **16%** in Q2 2025 and **8%** in H1 2025 due to macroeconomic uncertainty and delayed capital expenditures[152](index=152&type=chunk)[170](index=170&type=chunk)[173](index=173&type=chunk) - U.S. and Canada Gaming operations installed base increased by **13,806 units** (**42%**) year-over-year, including **11,026 units** from Grover[170](index=170&type=chunk)[172](index=172&type=chunk) - Gaming AEBITDA increased by **$8 million** (Q2) and **$30 million** (H1), with AEBITDA margin increasing to **53%** (Q2) and **52%** (H1) due to favorable revenue mix and margin enhancements[175](index=175&type=chunk) [SCIPLAY](index=39&type=section&id=SCIPLAY) This section analyzes the SciPlay segment's revenue and AEBITDA, focusing on changes in player metrics and the growth of the direct-to-consumer platform - SciPlay revenue decreased **2%** for both Q2 and H1 2025, primarily due to a decline in average monthly payers, partially offset by an increase in average monthly revenue per paying user[153](index=153&type=chunk)[178](index=178&type=chunk)[187](index=187&type=chunk) - Average monthly revenue per paying user increased **10%** for Q2 2025 and **6%** for H1 2025[153](index=153&type=chunk)[183](index=183&type=chunk) - Direct-to-consumer platform revenue increased **46%** in Q2 and **75%** in H1, representing approximately **16%** of total SciPlay revenue for H1 2025, contributing to higher margins[177](index=177&type=chunk)[183](index=183&type=chunk) - SciPlay AEBITDA increased by **$4 million** (Q2) and **$6 million** (H1), with AEBITDA margin increasing to **37%** (Q2) and **34%** (H1) due to higher margins from the direct-to-consumer platform[191](index=191&type=chunk) SciPlay Key Performance Indicators (Three Months Ended June 30) | Metric | 2025 | 2024 | Variance | | :--- | :--- | :--- | :--- | | Average MAU (millions) | 5.2 | 5.4 | (4)% | | Average DAU (millions) | 2.0 | 2.1 | (5)% | | ARPDAU | $1.08 | $1.04 | 4% | | Average MPUs (thousands) | 512 | 574 | (11)% | | AMRPPU | $128.96 | $116.91 | 10% | | Payer Conversion Rate | 9.8% | 10.5% | (0.7)pp | [iGAMING](index=41&type=section&id=iGAMING) This section reviews the iGaming segment's revenue and AEBITDA growth, driven by North American market momentum and partner network expansion, alongside the discontinuation of Live Casino operations - iGaming revenue increased **9%** in Q2 2025 and **7%** in H1 2025, driven by momentum in North American markets and expansion of the partner network[153](index=153&type=chunk)[197](index=197&type=chunk) - Wagers processed through the Open Gaming System increased to **$27 billion** (Q2) and **$52 billion** (H1)[197](index=197&type=chunk) - The company is discontinuing Live Casino operations to reallocate resources, with no material impact expected on long-term growth prospects[194](index=194&type=chunk)[198](index=198&type=chunk) - iGaming AEBITDA increased **17%** (Q2) and **15%** (H1), with AEBITDA margin increasing to **35%** for both periods due to lower operating expenses[198](index=198&type=chunk) [RECENTLY ISSUED ACCOUNTING GUIDANCE](index=42&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20GUIDANCE) This section addresses the impact of recently issued accounting guidance on Light & Wonder's consolidated financial statements - No recently issued accounting guidance is expected to have a significant effect on the consolidated financial statements[199](index=199&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=42&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section discusses Light & Wonder's critical accounting estimates, noting updates related to business combinations and goodwill following the Grover acquisition - No significant changes to critical accounting estimate policies, except for updates related to business combinations and goodwill following the Grover acquisition[201](index=201&type=chunk)[202](index=202&type=chunk) - The company now has seven reporting units: Gaming, Grover, U.K. Gaming, Casino Management Systems, Table Products, SciPlay, and iGaming[203](index=203&type=chunk) - Goodwill is tested for impairment annually on October 1 or sooner if circumstances change; no such events occurred as of June 30, 2025[203](index=203&type=chunk) [LIQUIDITY, CAPITAL RESOURCES AND WORKING CAPITAL](index=44&type=section&id=LIQUIDITY%2C%20CAPITAL%20RESOURCES%20AND%20WORKING%20CAPITAL) This section analyzes Light & Wonder's liquidity, capital resources, and working capital, detailing cash flow activities, available liquidity, and debt management Cash and Available Revolver Capacity (in millions) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $136 | $196 | | Revolver capacity | $1,000 | $750 | | Revolver capacity drawn | $(195) | $0 | | Letters of credit | $(10) | $(10) | | Total available liquidity | $931 | $936 | - Net cash provided by operating activities decreased by **$21 million** to **$291 million** for H1 2025, primarily due to changes in working capital and **$73 million** in legal settlement payments[212](index=212&type=chunk)[213](index=213&type=chunk) - Net cash used in investing activities increased by **$842 million** to **$1,000 million** for H1 2025, primarily due to the Grover acquisition (**$861 million**)[212](index=212&type=chunk)[214](index=214&type=chunk) - Net cash provided by financing activities increased by **$910 million** to **$660 million** for H1 2025, driven by new debt borrowings (LNWI Term Loan A and Revolver) partially offset by **$270 million** in share repurchases[212](index=212&type=chunk)[215](index=215&type=chunk) - No significant off-balance sheet arrangements as of June 30, 2025[217](index=217&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, primarily focusing on interest rate risk, detailing the impact of variable rate debt and the use of interest rate swap contracts to manage this exposure - As of June 30, 2025, **$3.1 billion** of long-term debt is variable rate, with a hypothetical **1%** change in interest rates resulting in approximately **$31 million** change in interest expense[219](index=219&type=chunk) - Interest rate swap contracts are used to hedge a portion of variable rate debt, effectively fixing the interest rate on a **$700 million** notional amount until April 2027[220](index=220&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms effective disclosure controls and procedures, with ongoing integration of Grover's internal controls - Disclosure controls and procedures were effective as of June 30, 2025[222](index=222&type=chunk) - The company is integrating Grover's internal controls over financial reporting; no other material changes to internal control over financial reporting occurred during Q2 2025[223](index=223&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 15 of the financial statements for a comprehensive discussion of the company's legal proceedings, which include various litigations and arbitrations - For a detailed discussion of legal proceedings, refer to Note 15 in this Quarterly Report on Form 10-Q[224](index=224&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors including economic conditions, geopolitical events, and potential impacts of delisting from Nasdaq and sole ASX listing - Unfavorable U.S. and international economic conditions, including inflation, rising interest rates, and new trade tariffs, continue to adversely affect business, discretionary spending, and customer capital expenditures[226](index=226&type=chunk)[227](index=227&type=chunk)[229](index=229&type=chunk)[234](index=234&type=chunk)[236](index=236&type=chunk) - Geopolitical factors like armed conflicts (e.g., in Israel) could negatively affect SciPlay's operations and the supply chain for the Gaming business[231](index=231&type=chunk)[232](index=232&type=chunk) - The decision to pursue a sole primary listing on the ASX and delist from Nasdaq could negatively affect the liquidity and trading prices of common stock, and impact access to capital markets[237](index=237&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities under its authorized program, including the repurchase of 1.2 million shares for $100 million during the three months ended June 30, 2025 Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025, in millions, except for price per share) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Cost of Repurchase | Approximate Dollar Value Remaining Under Programs | | :--- | :--- | :--- | :--- | :--- | | 4/1/2025 - 4/30/2025 | 0.6 | $81.52 | $53 | $494 | | 5/1/2025 - 5/31/2025 | 0.6 | $85.81 | $47 | $447 | | 6/1/2025 - 6/30/2025 | 0.0 | $0.00 | $0 | $447 | | Total | 1.2 | $83.33 | $100 | $447 | - Share repurchases are subject to a **1%** excise tax, with **$2 million** recorded as of June 30, 2025[241](index=241&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities[242](index=242&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Not applicable[243](index=243&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) This section discusses insider trading arrangements and policies, noting that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[245](index=245&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, corporate documents, certifications, and XBRL related files - Lists various exhibits, including the Asset Purchase Agreement for Grover Gaming, Credit Agreement, Incentive Compensation Plan, and certifications[246](index=246&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) This section contains the official signatures for the quarterly report [SIGNATURES](index=51&type=section&id=SIGNATURES) The report was duly signed on behalf of Light & Wonder, Inc. by Oliver Chow, Executive Vice President, Chief Financial Officer and Treasurer, on August 6, 2025 - Report signed by Oliver Chow, Executive Vice President, Chief Financial Officer and Treasurer, on August 6, 2025[250](index=250&type=chunk)[251](index=251&type=chunk)

Financial Performance - Consolidated revenue decreased by 1% from $818 million in 2Q24 to $809 million in 2Q25[9] - Consolidated AEBITDA increased by 7% year-over-year, from $330 million in 2Q24 to $352 million in 2Q25[9] - Adjusted NPATA increased by 4% year-over-year, from $130 million in 2Q24 to $135 million in 2Q25[9] - iGaming AEBITDA increased by 17% year-over-year[17] - SciPlay AEBITDA increased by 6% year-over-year[17] Gaming Segment - Gaming revenue was $528 million in 2Q25, a decrease of 2% compared to $539 million in 2Q24[24] - Gaming operations revenue increased by 19% year-over-year, driven by the addition of Grover and growth in the North American installed base[26] - Gaming machine sales decreased by 16% year-over-year due to global macroeconomic uncertainty and timing of hardware refresh cycle in Australia[26] - North American installed base increased by 42% year-over-year to over 46,300 units[32] SciPlay Segment - SciPlay revenue was $200 million in 2Q25, a decrease of 2% compared to $205 million in 2Q24[37] - SciPlay's direct-to-consumer (DTC) platform generated $35 million, representing 18% of total SciPlay revenue[40] - Average Revenue Per Daily Active User (ARPDAU) grew 4% year-over-year to a record $1.08[40] iGaming Segment - iGaming revenue reached a record $81 million in 2Q25, a 9% increase compared to $74 million in 2Q24[46] - Wagers processed through OGS increased by 22% to $26.6 billion[47]

Executive Summary & Strategic Highlights [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Light & Wonder reported Q2 2025 earnings growth and margin expansion across segments, with consolidated revenue slightly down but net income and AEBITDA up Q2 2025 Consolidated Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Consolidated Revenue | $809M | $818M | (1)% | | Net Income | $95M | $82M | 16% | | Consolidated AEBITDA | $352M | $330M | 7% | - Macroeconomic uncertainty led to cautious purchasing behavior and delayed capital expenditure among customers, impacting game sales timing[4](index=4&type=chunk) - Gaming business sold over **9,000 new units** globally, maintaining strong market share momentum[4](index=4&type=chunk) - North American premium installed base increased for the **20th consecutive quarter**, adding **845 units sequentially** and over **2,700 units year-over-year**[2](index=2&type=chunk) - iGaming business delivered **quarterly record revenue**[4](index=4&type=chunk) [Strategic Initiatives & Capital Allocation](index=1&type=section&id=Strategic%20Initiatives%20%26%20Capital%20Allocation) Light & Wonder advances strategic initiatives, including a sole ASX listing, expanded share repurchases, and successful Grover integration [ASX Listing & Share Repurchases](index=1&type=section&id=ASX%20Listing%20%26%20Share%20Repurchases) - L&W Board approved a sole primary listing on the ASX, with delisting from Nasdaq expected by end of November 2025, reflecting strategic alignment with long-term growth plans and shareholder base[2](index=2&type=chunk)[3](index=3&type=chunk)[11](index=11&type=chunk) - Returned **$266 million** of capital to shareholders through share repurchases during the first half of 2025, completing approximately **55%** of the previously authorized **$1.0 billion** plan[3](index=3&type=chunk)[4](index=4&type=chunk) - Approved an additional **$500 million** for share repurchases, increasing the total program to **$1.5 billion**, demonstrating confidence in the company's outlook and value creation[3](index=3&type=chunk)[4](index=4&type=chunk)[11](index=11&type=chunk) - Principal face value of debt outstanding was **$4.9 billion**, resulting in a net debt leverage ratio of **3.7x** as of June 30, 2025, or a combined net debt leverage ratio of **3.4x**, remaining within the target range of **2.5x to 3.5x**[11](index=11&type=chunk) [Grover Acquisition](index=1&type=section&id=Grover%20Acquisition) - Completed the acquisition of Grover Gaming's charitable gaming business on May 16, 2025, for an upfront consideration of **$850 million**[2](index=2&type=chunk)[4](index=4&type=chunk)[15](index=15&type=chunk) - Grover is a leading provider of electronic pull-tabs across five U.S. states, with its financial results reported as part of the Gaming segment[15](index=15&type=chunk) - Integration of Grover is progressing ahead of schedule, with over **600 active units** added since the acquisition announcement[2](index=2&type=chunk)[4](index=4&type=chunk) - The acquisition was financed by borrowing **$800 million** under a new term loan 'A' facility[15](index=15&type=chunk) [FY 2025 Financial Outlook](index=1&type=section&id=FY%202025%20Financial%20Outlook) FY 2025 Financial Guidance (Inclusive of Grover) | Metric | Guidance Range | | :--------------------- | :------------- | | Consolidated AEBITDA | $1.43B - $1.47B | | Adjusted NPATA | $550M - $575M | - Expected earnings to be second half weighted, with Q3 2025 year-over-year Consolidated AEBITDA growth in the **low double-digits** and accelerated growth in Q4, primarily driven by international game sales[15](index=15&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasizes R&D, strong game performance, Grover integration, and the strategic benefits of a sole ASX listing - CEO Matt Wilson affirmed commitment to R&D investment to proliferate high-performing content and expand the North American installed base, while praising the ahead-of-schedule Grover integration and the strategic move to a sole ASX listing[8](index=8&type=chunk) - CFO Oliver Chow underscored the benefits of a diversified business model, disciplined execution leading to meaningful margin expansion, continued investment across the portfolio, and adherence to the share buy-back program while maintaining the targeted net debt leverage ratio[8](index=8&type=chunk) - Board Chair Jamie Odell stated that the move to a sole primary ASX listing, where equity trading already accounts for approximately **37%** of total equity, is in the best long-term interests of shareholders, offering investment in a global growth company with strong fundamentals and recurring revenues[8](index=8&type=chunk) Financial Performance Highlights [Summary Financial Results (Q2 & H1 2025)](index=3&type=section&id=Summary%20Financial%20Results%20(Q2%20%26%20H1%202025)) Summary financial results for Q2 and H1 2025 show mixed revenue but consistent growth in net income and AEBITDA, with increased debt Summary Financial Results (Q2 & H1 2025) | ($ in millions except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $809 | $818 | $1,582 | $1,575 | | Net income | 95 | 82 | 177 | 164 | | Net income per share – Diluted | 1.11 | 0.90 | 2.05 | 1.78 | | Net cash provided by operating activities | 106 | 141 | 291 | 312 | | Capital expenditures | 78 | 86 | 139 | 153 | | Consolidated AEBITDA | $352 | $330 | $663 | $610 | | Adjusted NPATA | 135 | 130 | 252 | 234 | | Adjusted NPATA per share – Diluted (or EPSa) | 1.58 | 1.42 | 2.93 | 2.54 | | Free cash flow | 29 | 70 | 140 | 162 | | Cash and cash equivalents (As of period end) | $136 | N/A | $136 | N/A | | Total debt (As of period end) | 4,856 | N/A | 4,856 | N/A | [Second Quarter 2025 Financial Highlights](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Q2 2025 consolidated revenue slightly decreased, but net income and AEBITDA increased due to lower costs and margin expansion Q2 2025 Revenue and AEBITDA by Segment | Segment | Revenue 2025 ($M) | Revenue 2024 ($M) | Revenue Change ($M) | Revenue Change (%) | AEBITDA 2025 ($M) | AEBITDA 2024 ($M) | AEBITDA Change ($M) | AEBITDA Change (%) | AEBITDA Margin 2025 (%) | AEBITDA Margin 2024 (%) | PP Change | | :-------- | :---------------- | :---------------- | :------------------ | :----------------- | :---------------- | :---------------- | :------------------ | :------------------ | :---------------------- | :---------------------- | :-------- | | Gaming | $528 | $539 | $(11) | (2)% | $280 | $272 | $8 | 3% | 53% | 50% | 3 | | SciPlay | $200 | $205 | $(5) | (2)% | $74 | $70 | $4 | 6% | 37% | 34% | 3 | | iGaming | $81 | $74 | $7 | 9% | $28 | $24 | $4 | 17% | 35% | 32% | 3 | | Total | $809 | $818 | $(9) | (1)% | $352 | $330 | $22 | 7% | 44% | 40% | 4 | - Net income increased **16% to $95 million**, driven by lower cost of revenue, reduced operating expenses, and lower restructuring costs, despite a decrease in consolidated revenue[21](index=21&type=chunk) - Net income per share increased by **23% to $1.11**[21](index=21&type=chunk) - Adjusted NPATA increased **4% to $135 million**, and Adjusted NPATA per share (EPSa) increased **11% to $1.58**[21](index=21&type=chunk) - Net cash provided by operating activities was **$106 million** (down from **$141 million** YoY), primarily impacted by **$73 million** in legal settlement payments[

Core Viewpoint - Light & Wonder (LNW) has experienced a significant downtrend, with an 11.6% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 typically indicating that a stock is oversold [2]. - LNW's current RSI reading is 26.89, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound as the stock seeks to return to its previous equilibrium [5]. Group 2: Fundamental Analysis - Analysts covering LNW have shown strong consensus in raising earnings estimates, with a 2.8% increase in the consensus EPS estimate over the last 30 days, which often correlates with near-term price appreciation [7]. - LNW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [8].

Core Viewpoint - Light & Wonder (LNW) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with earnings expected at $1.44 per share, reflecting a 1.4% increase, and revenues projected at $859.95 million, up 5.1% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for August 6, and the stock may experience upward movement if the reported figures exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 3.14% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Light & Wonder is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.39%, indicating a bearish outlook from analysts [12]. - Despite the negative Earnings ESP, the stock holds a Zacks Rank of 2, which complicates the prediction of an earnings beat [12]. Historical Performance - Light & Wonder has a history of beating consensus EPS estimates, having done so in the last four quarters, including a surprise of +15.38% in the most recent quarter where actual earnings were $1.35 per share against an expected $1.17 [13][14]. Conclusion - While Light & Wonder does not appear to be a strong candidate for an earnings beat based on current estimates, investors are advised to consider other influencing factors before making investment decisions [17].

Core Insights - Light & Wonder (LNW) is currently viewed as a stronger investment option compared to DraftKings (DKNG) for value investors seeking undervalued stocks [1][3][7] Valuation Metrics - LNW has a forward P/E ratio of 17.65, significantly lower than DKNG's forward P/E of 33.50, indicating LNW may be undervalued [5] - The PEG ratio for LNW is 0.63, while DKNG's PEG ratio is 0.64, suggesting LNW has a more favorable growth outlook relative to its valuation [5] - LNW's P/B ratio stands at 13.32, compared to DKNG's P/B of 45.31, further highlighting LNW's relative undervaluation [6] Earnings Outlook - LNW has a Zacks Rank of 1 (Strong Buy), indicating a stronger improvement in its earnings outlook compared to DKNG, which has a Zacks Rank of 3 (Hold) [3][7] - The overall valuation metrics and earnings outlook position LNW as the superior value option in the gaming sector [7]

Core Viewpoint - Light & Wonder's stock experienced a significant increase of over 10% following a favorable court ruling in its legal dispute with Aristocrat Leisure, contrasting with the flat performance of the S&P 500 [1]. Legal Dispute - Light & Wonder is involved in a legal case with Aristocrat Leisure, which accuses it of copying elements from its casino slot game in the design of Light & Wonder's Dragon Train game [2]. - The Nevada court ruled in favor of Light & Wonder, stating that the company does not need to disclose its mathematical models related to the slot games in question, and requested Aristocrat to specify the trade secrets it is trying to protect [4]. Background of the Case - Aristocrat, based in Australia, initiated the lawsuit against Light & Wonder in 2024, claiming it would seek all appropriate remedies for the alleged harm caused by Light & Wonder's actions [5]. Market Reaction - Following the positive court ruling, investors showed confidence in Light & Wonder, leading to a notable rise in its stock price [1].

Core Viewpoint - Light & Wonder (LNW) shares have increased by approximately 6.5% over the past month, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Group 1: Earnings Estimates - Estimates for Light & Wonder have trended downward over the past month, with a consensus estimate shift of -5.64% [2] - The overall direction and magnitude of estimate revisions indicate a downward shift, resulting in a Zacks Rank 3 (Hold) for Light & Wonder, suggesting an expectation of in-line returns in the coming months [4] Group 2: VGM Scores - Light & Wonder has a strong Growth Score of A, a Momentum Score of A, and a Value Score of A, placing it in the top 20% for this investment strategy, leading to an aggregate VGM Score of A [3] Group 3: Industry Performance - Light & Wonder is part of the Zacks Gaming industry, where Boyd Gaming (BYD) has gained 2.4% over the past month, reporting revenues of $991.57 million for the last quarter, reflecting a year-over-year increase of +3.2% [5] - Boyd Gaming is expected to post earnings of $1.62 per share for the current quarter, indicating a change of +2.5% from the previous year, with a Zacks Consensus Estimate change of -0.2% over the last 30 days, also holding a Zacks Rank 3 (Hold) and a VGM Score of A [6]

LNW NASDAQ • ASX L I S T E D I NVE ST OR DAY New York City • May 20, 2025 INVESTOR DAY 2025 3 LNW NASDAQ • ASX L I S T E D INVESTOR DAY 2025 2 Agenda LNW NASDAQ • ASX L I S T E D | Introduction | Business Overview and Strategy | | --- | --- | | Products, Business Verticals, | Our Unique Business Model and Leading | | & Cross-Platform | Positions | | Expert Panel | Differentiation Among Gaming Industry | | Financials | Robust Foundation and Opportunity for | | | Continued Growth | | Q&A | | INVESTOR DAY 2025 ...