Light & Wonder(US:LNW)2024-05-09 03:26Financial Data and Key Metrics Changes - Consolidated revenue increased 13% year-over-year to $756 million, with operating income rising 62% to $165 million, primarily due to higher revenue and healthy margins [45][46] - Adjusted NPATA increased 22% year-over-year to $105 million, reflecting strong revenue growth across all businesses [46] - Consolidated AEBITDA grew 13% to $281 million, resulting in a consolidated AEBITDA margin of 37% for the quarter [63][64] Business Line Data and Key Metrics Changes - Gaming revenue grew 14% year-over-year to $476 million, driven by strong global gaming machine sales and gains across gaming operations and systems [65] - SciPlay delivered record revenue, up 11% year-over-year to $206 million, supported by robust player engagement and monetization [69] - iGaming revenue increased 14% year-over-year to a record $74 million, driven by strong content launches and market expansion [85] Market Data and Key Metrics Changes - North American premium installed base grew for 15 consecutive quarters, now representing 49% of the North American in-store base [32] - Average monthly revenue per paying user in SciPlay reached nearly $114, an increase of 17% compared to the prior year [73] - Wagers processed through the iGaming OGS platform increased 10% year-over-year to a record $22.4 billion [86] Company Strategy and Development Direction - The company aims to continue executing its capital allocation strategy, focusing on share buybacks and organic investments [8][19] - The strategy emphasizes building great franchises across three channels, with a focus on cross-platform opportunities [11][12] - The company is committed to enhancing its direct-to-consumer platform, which generated approximately 6% of revenues in the first quarter [60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $1.4 billion revenue target, citing strong operating momentum and a solid pipeline of opportunities [151][152] - The company remains focused on maintaining strong margins while investing in growth initiatives and R&D [162] - Management noted that the gaming industry is resilient, with healthy consumer demand fueling impressive growth [51] Other Important Information - The company repurchased $25 million of shares during the quarter, totaling approximately $600 million or 80% of the $750 million authorized program [89] - The company had approximately $1.2 billion of available liquidity at the end of the quarter, including $450 million in cash [87] Q&A Session Summary Question: What is the growth trajectory for SciPlay and the DTC platform? - Management highlighted SciPlay's consistent market share gains and expects the DTC platform to ramp up significantly, aiming for higher revenue contributions over time [91][105] Question: Can you elaborate on unit sales and adjacent market opportunities? - Management discussed strong year-over-year growth in unit sales and the potential for significant contributions from adjacent markets in 2024 [95][111] Question: How is slot demand globally and what is the forward order visibility? - Management indicated improving game quality and a solid order book, with discrete opportunities in adjacent markets providing stability [134] Question: What are the expectations for free cash flow conversion? - Management expects annual conversion rates to trend favorably, despite some seasonality in cash flow levels [139] Question: What is the company's approach to M&A? - Management stated that while they are open to M&A opportunities that align with their core business, they are not in a hurry to complicate the portfolio [142]