Light & Wonder(US:LNW)2025-02-26 03:40Financial Data and Key Metrics Changes - Consolidated revenue for 2024 was $3.2 billion, a 10% increase from the prior year, with fourth quarter revenue at $797 million, up 4% year-over-year [37] - Full year operating income was $668 million, a 29% increase year-over-year, with fourth quarter operating income growing 8% to $168 million [38] - Diluted net income per share more than doubled from $1.75 in 2023 to $3.68 in 2024, with fourth quarter diluted net income per share at $1.20, up from $0.73 [39] - Consolidated AEBITDA for 2024 was $1.24 billion, an 11% increase from 2023, with fourth quarter AEBITDA at $315 million, a 4% increase [40] Business Line Data and Key Metrics Changes - In Gaming, revenue for the quarter was $515 million, a 4% year-over-year increase, with systems growth of 24% [42] - SciPlay's full year revenue grew 6% to $821 million, with fourth quarter revenue at $204 million and AEBITDA increasing 7% year-over-year to a record $74 million [47] - iGaming revenue grew 11% year-over-year to $78 million in the quarter, with full year revenue up 9% to $299 million [52] Market Data and Key Metrics Changes - North America revenue per day grew 2% for the year, with global gaming machine sales at $195 million in the quarter, up 25% year-over-year [44] - The company maintained the number one ship share position in North America for the second, third, and fourth quarters [72] - The iGaming business processed over $24 billion in wagers through the OGS platform, reflecting a 30% year-over-year growth in US GGR [53] Company Strategy and Development Direction - The company plans to focus on top and bottom line growth while continuing investments for future growth, including the acquisition of Grover Gaming's charitable gaming business for $850 million [9][10] - The strategy includes leveraging R&D investments to enhance product offerings and expand into new markets, particularly in charitable gaming and iGaming [29][62] - The decision to divest the live casino business reflects a commitment to allocate resources to higher ROI opportunities [26][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $1.4 billion AEBITDA target for 2025, supported by strong product lineups and market momentum [68][75] - The company anticipates normalized growth in gaming operations in 2025, driven by a robust roadmap and strong performance from new game releases [15][17] - Management highlighted the importance of maintaining operational excellence and optimizing processes to navigate dynamic market conditions [57][58] Other Important Information - The company reported free cash flow of $74 million in the fourth quarter and $318 million for the year, reflecting strong earnings [61] - The acquisition of Grover is expected to be accretive to adjusted NPATA in the first full calendar year of ownership in 2026 [62] - The company has engaged advisors to evaluate potential strategies for enhancing its ASX listing and capital structure [34] Q&A Session Summary Question: Can you talk through how you see the cadence in getting to $1.4 billion in AEBITDA this year? - Management expressed confidence in achieving the target, citing strong product lineups and momentum leading into 2025 [68][75] Question: How might the installed base change in Q1 in light of new product strength? - Management noted that fee degradation seen in Q4 would reverse in Q1, with a strong lineup of new games expected to drive growth [79][82] Question: Can you discuss the margin growth in Q4 for the gaming segment? - Management indicated that margin growth was driven by mix and controllable factors, with expectations for continued margin expansion in 2025 [86][88] Question: What are the drivers of iGaming growth and outlook? - Management highlighted the successful launch of Huff N' Puff in iGaming and the focus on quality content and cadence of releases across channels [95][98] Question: How do you think about growth in cash flow moving forward? - Management emphasized the importance of free cash flow and the expected contribution from the Grover acquisition to drive incremental cash flow [104]