Light & Wonder(LNW) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated revenue for Q3 2025 was $841 million, a 3% increase from $817 million in Q3 2024[5] - Net income rose 78% to $114 million, with net income per share increasing 89% to $1.34 compared to the prior year[5] - Consolidated AEBITDA grew 18% to $375 million, while Adjusted NPATA increased 25% to $153 million, or $1.81 per share[5] - Third quarter consolidated revenue was $841 million, a 3% increase from $817 million in the prior year, driven by a 4% increase in Gaming revenue and a 16% increase in iGaming revenue[21] - Net income rose 78% to $114 million, compared to $64 million in the prior year, with net income per share increasing 89% to $1.34[21] - Consolidated AEBITDA increased 18% to $375 million, up from $319 million in the prior year, primarily due to revenue growth from Gaming and iGaming[21] - Adjusted NPATA increased 25% to $153 million, with adjusted NPATA per share rising 35% to $1.81[21] - Operating income increased to $229 million in Q3 2025, up from $159 million in Q3 2024, marking a 44% growth[38] - The company reported a net income margin of 14% for Q3 2025, up from 8% in Q3 2024[45] Cash Flow and Shareholder Returns - Generated $184 million in net cash from operating activities and $136 million in free cash flow, representing year-over-year growth of 55% and 64%, respectively[5] - Returned $111 million to shareholders through share repurchases during the quarter, with a total of $1.5 billion returned since March 2022[11] - Free cash flow increased to $136 million from $83 million in the prior year, driven by similar factors impacting net cash from operating activities[21] - Free cash flow for the three months ended September 30, 2025, was $136 million, compared to $83 million in the same period of 2024, an increase of 63.9%[64] Debt and Financial Position - Principal face value of debt outstanding was $5.0 billion, with a net debt leverage ratio of 3.5x as of September 30, 2025[11] - Long-term debt, excluding current portion, rose to $4,893 million as of September 30, 2025, compared to $3,847 million at the end of 2024[40] - Total debt as of September 30, 2025, was $4,942 million, an increase from $3,870 million as of December 31, 2024[59] - The net debt leverage ratio improved to 3.5 as of September 30, 2025, compared to 3.0 as of December 31, 2024[59] Revenue Breakdown - Gaming revenue increased 4% to $558 million, driven by a 38% rise in Gaming operations revenue to $241 million[5] - SciPlay revenue decreased 4% to $197 million, with average revenue per daily active user increasing 4% to $1.08[24] - iGaming revenue reached $86 million, a 16% increase, with wagers processed through the platform hitting a record $28.0 billion[24] - Total revenue for the Gaming Business Segment reached $558 million, a 3.9% increase compared to $537 million in the same quarter of 2024[50] Operational Developments - The integration of Grover Gaming into the omni-channel strategy is progressing well, with plans to participate in the Indiana charitable gaming market[7] - Transition to a sole primary listing on the ASX is on schedule, with 57% of total outstanding shares converted to ASX tradable interests[15] - The installed base of gaming operations in the U.S. and Canada increased to 47,240 units, up from 33,151 units year-over-year, reflecting a growth of 42.5%[50] - Total new unit shipments for gaming machines were 8,608, down from 13,063 in the same quarter of 2024, indicating a decrease of 33.5%[50] Financial Metrics and Guidance - The company maintains its full-year 2025 financial outlook, with Consolidated AEBITDA guidance between $1.43 billion and $1.47 billion[15] - Adjusted NPATA guidance range for fiscal year 2025 is provided, but a forward-looking quantitative reconciliation to GAAP measures is not available due to uncertainties[78] - Consolidated AEBITDA is presented as a supplemental disclosure and is reconciled to net income, highlighting its importance in evaluating operational performance[82] - Free cash flow is calculated as net cash from operating activities minus capital expenditures and adjusted for changes in restricted cash[89] Non-GAAP Measures - Management introduced the usage of Combined non-GAAP financial measures post-Grover acquisition, which includes results for both the Company and Grover[70] - Net debt leverage ratio and Combined net debt leverage ratio are used to monitor the Company's overall liquidity and financial flexibility[71] - Adjusted NPAT and Adjusted NPATA provide additional perspective on performance by eliminating effects of certain items, which are less indicative of ongoing operations[72] - Combined measures are useful for investors as they provide insights into the combined business of the Company and Grover, enhancing comparisons of liquidity and leverage[74]