Light & Wonder(US:LNW)2023-05-10 05:06Financial Data and Key Metrics Changes - Consolidated revenue increased by 17% year-over-year to $670 million, with all three business segments achieving double-digit growth [55][43] - Operating income rose to $102 million, a 155% increase year-over-year, while consolidated AEBITDA grew 23% to $249 million, reflecting improved margins [29][55] - Consolidated AEBITDA margin increased to 37%, up 200 basis points from the prior year [29] Business Line Data and Key Metrics Changes - In Gaming, revenue grew 18% year-over-year to $419 million, driven by a 53% increase in game sales [30][29] - SciPlay achieved record revenue of $186 million, an 18% increase year-over-year, with AEBITDA growing 21% to $54 million [32][55] - iGaming revenue reached $65 million, a 10% increase year-over-year, primarily due to growth in the U.S. market [2][55] Market Data and Key Metrics Changes - In Australia, market share increased to over 20%, driven by strong performance in game sales [10][31] - U.S. revenue grew 34% year-over-year, with high-single-digit growth in the EU and U.K. [60][55] - The average revenue per daily user in SciPlay reached a record high of $0.89, a 20% increase year-over-year [59] Company Strategy and Development Direction - The company is focused on expanding its share in the total addressable market and pursuing a secondary listing on the Australian Stock Exchange to attract more investors [44][17] - Continued investment in R&D and a robust product pipeline are expected to drive sustainable growth across all business segments [26][9] - The company aims to achieve a consolidated AEBITDA target of $1.4 billion by 2025, with a focus on operational efficiency and market expansion [9][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the gaming industry, noting strong GGR numbers and continued reinvestment in gaming floors [79][125] - The company anticipates strong momentum into Q2, supported by elevated demand for its products and successful game launches [79][90] - Management highlighted the importance of maintaining a healthy balance sheet while exploring value-creating opportunities [103][62] Other Important Information - The company reported a free cash flow of $74 million, with a conversion rate of approximately 30% [62][55] - Legal expenses are expected to increase due to ongoing litigation, impacting corporate costs [72][110] - The company has repurchased $437 million worth of shares, fulfilling 58% of its authorization [64][123] Q&A Session Summary Question: What are the company's investment priorities? - The company continues to align investments with significant growth opportunities, focusing on organic investment in core capabilities and content platforms [66] Question: Can you discuss the cashless gaming opportunities? - Management noted a growing acceptance of cashless solutions, with significant technology rollout and partnerships in place [83][96] Question: How does the company view the resiliency of its business in a potential macro downturn? - Management expressed confidence in the resilience of all three business segments, noting that gaming has proven to be an affordable luxury [107][125] Question: What is the timeline for launching Live Casino in Michigan? - The company expects to receive regulatory approval in Q3, with plans to scale operations shortly thereafter [101] Question: Can you elaborate on capital allocation and share repurchase strategy? - The company maintains a balanced approach to capital allocation, focusing on long-term shareholder value while preserving optionality for future investments [102][103]