Light & Wonder(US:LNW)2022-05-10 22:35Financial Data and Key Metrics Changes - Consolidated revenue increased by 26% year-over-year to $572 million, with consolidated EBITDA growing by 42% [12][32][33] - Net loss from continuing operations decreased to $67 million due to higher operating income driven by revenue growth [33] - Adjusted net debt leverage ratio improved from 10.5 times to 3.7 times post-lottery sale, a reduction of approximately seven turns [13][35] Business Line Data and Key Metrics Changes - Gaming revenue increased by 45% year-over-year to $355 million, with AEBITDA growth of 60% to $171 million [39] - iGaming revenue grew by 2% to $59 million, with U.S. revenues up 63% year-over-year [44][46] - SciPlay's revenue rose by 5% year-over-year, marking its second-highest revenue quarter ever [26][46] Market Data and Key Metrics Changes - North American premium game operations now represent 43% of the total installed base, showing strong market recovery [17][40] - iGaming in the U.S. experienced seven sequential quarters of GGR growth, with original content generating 50% of GGR on the platform [22][24] - SciPlay's monthly average users and average monthly paying users improved sequentially, reflecting strong player retention [26] Company Strategy and Development Direction - The company aims to capitalize on the $60 billion global games market by focusing on five key pillars: content creation, expansion in digital markets, seamless player experience, deleveraging, and fostering a high-performance culture [10][11] - The company is actively pursuing a capital allocation strategy that prioritizes debt reduction, share repurchases, and disciplined investments in growth opportunities [32][50] - Recent acquisitions, including Alictus and Playzido, are intended to enhance growth and expand the company's portfolio in the casual and iGaming markets [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the gaming industry despite macroeconomic challenges, noting strong GGR levels across gaming, iGaming, and social segments [55][57] - The company is proactively managing its cost base and supply chain to navigate inflationary pressures and maintain healthy margins [16][60] - Future growth is anticipated from the launch of Live Dealer in Q4 and continued expansion in the casual gaming market [76][86] Other Important Information - The company completed the sale of its lottery business, generating approximately $5.6 billion in gross cash proceeds, which has significantly improved its financial flexibility [12][31] - A $750 million share buyback program was authorized, with approximately $140 million of shares repurchased to date [14][50] Q&A Session Summary Question: Can you dive deeper into the inflationary and macro environment? - Management acknowledged the volatility in the market but noted strong GGR levels and demand across all segments, indicating resilience [55][56] Question: How much pressure are you seeing cost-wise in the supply chain? - Management confirmed that supply chain impacts have been timing-related, with proactive measures taken to maintain margins [59][61] Question: How is the Playzido acquisition complementary to OpenBet? - The acquisition allows for rapid customized game development, enhancing the company's offerings for major operating partners [66][68] Question: What is the confidence level in growing the premium lease market share? - Management expressed optimism about increasing the premium segment to over 50% of the installed base, supported by a strong product lineup [70][72] Question: What are the expectations for the Live Dealer launch? - The first Live Dealer studio is set to launch in Q4, targeting major products like Blackjack and Baccarat, which are expected to drive significant revenue [75][76] Question: How is the cashless initiative progressing? - The company reported strong demand for its cashless products, with significant market penetration and ongoing pipeline development [85][86]