Light & Wonder(US:LNW)2021-08-09 15:46Financial Data and Key Metrics Changes - The company reported a total revenue increase of 63% year-over-year, with AEBITDA more than tripling compared to the previous year, achieving the highest quarterly AEBITDA in the company's history [16][57][58] - Free cash flow for the quarter was $133 million, with a year-to-date total of $213 million, reflecting strong operational performance [77][78] - Net debt leverage decreased from 10.5 times to 7.2 times in just six months, indicating significant progress in deleveraging [15][60][75] Business Line Data and Key Metrics Changes - The gaming segment saw revenue triple year-over-year, with AEBITDA rebounding to $196 million, driven by strong product performance and market recovery [62] - The lottery business achieved a revenue growth of 27% and AEBITDA growth of 42%, marking another record quarter [68][70] - SciPlay delivered a sequential revenue growth of 2% and AEBITDA growth of 4%, achieving its second-highest revenue quarter ever [71] Market Data and Key Metrics Changes - North American Gaming Operations revenue exceeded 2019 levels, with a significant increase in the installed base and average daily revenue [19][20] - The U.S. instant lottery game sales increased by 21% year-to-date compared to last year, and up 30% versus 2019 [26] - The U.S. iLottery market is projected to grow fourfold to $11 billion by 2025, indicating strong future growth potential [32] Company Strategy and Development Direction - The company is transitioning from a holding company to a focused game development company, planning to divest its Lottery and Sports Betting businesses [10][12] - Strategic investments are being made in content and digital markets to accelerate growth, with a focus on building franchises across platforms [13][14] - The acquisition of SciPlay's remaining equity interest is part of the strategy to enhance growth opportunities [6][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering strong results, citing resilience in business operations despite potential COVID-related challenges [91][92] - The company is optimistic about the ongoing recovery in international markets and expects continued growth in key performance indicators [97][98] - Management highlighted the importance of maintaining operational excellence and productivity to support margin improvement [104][105] Other Important Information - The company is experiencing strong interest in its divested assets, with multiple viable options to monetize both Lottery and Sports Betting businesses [85][86] - The integration of new acquisitions, such as Lightning Box, is expected to enhance the company's content offerings and market position [116][119] Q&A Session Summary Question: Can you provide additional color on the sales process for lottery and sports betting? - Management expressed satisfaction with the progress and strong interest in divested assets, indicating multiple viable options to unlock value for shareholders [84][85] Question: How is the business performing in July amid the resurgence of COVID cases? - Management noted that there has been no slowdown in business performance through July, with key performance indicators showing expansion [90][91] Question: Can you discuss the recovery cadence in international markets? - Management reported that international markets are opening up, with active units and revenue per day improving significantly [96][97] Question: What is the outlook for margins considering supply chain issues? - Management acknowledged supply chain challenges but stated that they are well-positioned to meet demand without impacting revenue or margins [100][103] Question: How is the North American Premium installed base performing? - Management highlighted that the installed base has exceeded 2019 levels, driven by new product launches and market recovery [110][112] Question: What advantages does the OGS provide for iGaming content and acquisitions? - Management emphasized that OGS offers significant value by providing access to a wide range of games and insights into market performance, enhancing acquisition opportunities [122][125]