LNW - Earnings call transcript Q2 2022

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Operator

Welcome to the Light & Wonder 2022 Second Quarter Investor Conference Call. [Operator Instructions].

Now let me turn the call over to Jim Bombassei, Senior Vice President of Investor Relations for Light & Wonder. Mr. Bombassei, you may begin.

James Bombassei

operator. you, Thank everyone. Good afternoon,

Connie call, results we period. second today's and discuss me will operating performance XXXX CFO Cottle; and Barry question-and-answer are quarter followed today During CEO our James. by With a

Our call. statements under Reform Private statements include materially the results risks certain those will and call during XXXX. could Securities from These to cause contain actual today of that forward-looking statements Act involve Litigation the uncertainties discussed that differ

please uncertainties, to refer our information on regarding and For afternoon, with relating risks issued release materials our filings this the to earlier SEC. our these earnings posted the website, the and call

entered We measure most agreement the be can in comparable financial non-GAAP business website. September and year, section we GAAP agreement. XX, our XXXX, directly each found we of to XX as well earnings a Investors into And will reconciliation Sports non-GAAP the we Betting discuss non-GAAP that the as purchase announced our of of this certain on to entered definitive in an measures. measure A into also had to on June release sell amendment each our description definitive measure a subsequently, Endeavor. On to

of all as sale these balance consolidated periods and During reflected of Partners. statement sale business Accordingly, in reflected for second these operations liabilities of we the for and businesses businesses we the operations presented. completed to in quarter, consolidated sheets the our have Lottery assets our Brookfield Business held as our discontinued

discontinued referring our and continuing Gaming, to iGaming. disclosures operations and We in operations. are and X SciPlay of both reporting combined continuing include segments: our Amounts results business

and presentation. now Supplemental help of of Barry. will is A turn slides an replay to earnings accompanying results, archived lnw.com. the are the call the at on I on to our facilitate conference And being this in Relations reference your call Investor website company's this reminder, section including a Investors materials available our As will over website be recorded. webcast review

Barry Cottle

certainty end enhance the shareholder in our debt we at in proactively to cash bringing million $X.X net and sale amended share proceeds, a quarter. Thank QX that proceeds. pivotal investing sheet. We look growth. end, creating have in Together, our promise discuss Lottery Wonder, we further a you our our When the of what you the performance this execute organization. the road priorities: as poised and I'm are and delivered at of of million $XXX allocation business, disciplined ability it net made we is excited the To And we map transaction path we speed of by Betting progress for value & the process as accomplished, and approach to significant well as paydown, agreement, valuation, X value seeing in Light reconstitute for completed increasing success clear This to our after-tax to final the company company, generate step and by year joining Sports of sale are on to us approximately strong billion you our in evidence the to streamlining to the operating and balance a the dispositions represents delever transforming through on our today. enabling we've our shareholders. drive will and capital strong a gross closing transforming for and our simplified $XXX these deliver approximately see significant us repurchases

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Constance James

Barry. Thanks,

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Operator

Instructions]. [Operator

Jonas line first today Truist. Our comes Barry from of the question from

Barry Jonas

kind hesitancy the other for X next visibility speak you and Can for say, Gaming you're business? any And as that you you I on, of the so going seeing everything months maybe parts the with and or customers? over, with guess about seeing of are talk

Barry Cottle

Barry, thanks I news your question. think great here. Look, for there's

seeing with and industries continued been all resilient, momentum and First, reinforced conversations the numerous game historically elevated that had have We're gaming operators. actually great today. very mobile seeing of by levels and that GGR we've with we're our

And ability -- so product have stronger strong market frankly, of in an that road to games we're map our and have. share, given confidence and a a confidence take in seeing the robust we even the quite we the success and momentum the

kind it each into So I break of if down go and of the groups.

we in titles have into gaming as U.S., market. a in ever bringing launches. look strong we to the we then chart-topping great Gaming, the today second company. X in lineup which share highest funnel the typical. all of that the a We year, actually saw strong QX, continued all the again, which can cabinets breadth we a strong growth driven even and which SciPlay, lines, me in is, we and original market gains, continue strong And is saw if we and with which drive success had where and Gaming, More And game highest So portfolio. not major start. half, across each have to we we land-based to ever of confidence payers and are and have for during categories. month summer revenue growth. than QX in number the had games by we're a second in you in including broadly, off recovery the month, business which look testament beyond slot depth at July in with all scheduled we -- really second which the half SciPlay, now X a pipeline major And history growth the that's gives in iGaming our the also great was And we're of that more was of speaks quarter, of the to to X our a segments,

very again, if the we confident the what see. businesses you into So and feeling look across market, about

Constance James

to the get Yes. And one on that our real-time Barry said, is data. build business we I'd of just about what beauties

In environment they a elevated Coin which fact, and from to I just that Barry's well be the across think strong To to all to this daily the which great elevated in as business markets, strong continue sign iGaming. SciPlay, we have point, moment. looked have in morning operating as at Gaming, I is significant in backdrop and at macro we're trends momentum visibility And the in a get metrics. of continue continues just both

where we business to our a the is feel half. and about confident really ability So headed deliver second strong

Barry Jonas

from X That's changed underlying be to great. composition, your but ask And or about it's targets? the I could the assumptions anything's you to some follow-up, get a look, color. months That I'm targets to be appreciate then may think so if maybe just been timing all it sort for that those early your outlined, your of Day. just perspective? about this, or you since as Analyst shape and curious of

Barry Cottle

momentum next we in set ability the and are Day. months, also mentioned as share the have -- position. great today. to we for people strategy folks Investor our sector was the and Thanks, Absolutely. about the talked can't we momentum to I an introduce progress the a of actually confident predict these our is organization that And we in highly showing But that And obviously And is targets our performance to during made achieve we're resilient the strategic Barry. in know game we the last business as today this the driving environment. that macro on initiatives, off X just Investor industry quarter based our the we've Day great unmatched Look, our and us initiatives. the

markets: iGaming product only an in in confidence that X portfolio with have evidenced gotten as day, and the gaming, and amazing stronger this assets all positions We that frankly, social. people, playbook our quarter. shared it's And our across quite of map leading road we

Constance James

us the relation Investor outlined. have we with the which share we paying refinancing, just of thing the that might debt on in to significant leverage one our proceeds the And and it really you reduction, made debt our and executing I In resulted outlined growth. priorities we debt management reduction, additional pleased for quarter, significant ratio. investing that received at would that debt in to here, X.Xx which we down our achieving range we've April billion $X.X with way capital this were And add Day, we're swift the puts seen X.Xx progress on to X.Xx progress net made that well repurchasing in

Additionally, our pillar $XXX management. is And we've already that capital a of mentioned repurchase in which, on million months. continue just we short have which made opportunity a generate move will drive divestiture, significant shareholder we've remarks XX% as we significant the opportunity tremendous the in just progress cash executed to program of program, to again, share prepared that Barry the see past our key flow, forward to X value. we as

targets. momentum ability momentum capital the about competitive So the in the we we've feel all our achieve to of and advantage already driven those plus we in management, business that good of the operational see terms really

Operator

David today question from next from comes the line Jefferies. The Katz of

David Katz

I right? grew look little say, about about time. was talk accelerate if qualitative build just I to a over wanted you talk those growth, the as in like, what bit. next small. it helpful, going for to and mean, us, I targets, I towards please. moment and a terms, just SciPlay assume But that's this And more there months, is could it one, Number mean, discuss -- little a just but months relatively XX what be detail might would just for XX you

Barry Cottle

your for thank And David. question. absolutely, you Yes,

So portfolio, if has over the the XXXX, a we cohorts time. And the as you -- cohorts, last our because it grown XX% incredibly -- you there's post by players. And see Remember, an if COVID high -- a at of stepping outpace largest -- the And the over Project grown games of was we to last to TAM But ARPDAU look pick that call some is value over and that of $XX roughly program upside can back, peers. these upside ARPDAU to with is games. while adapting it's to, SciPlay entire implemented you SciPlay, some to billion as games and upside. it evergreen monetization, over healthy, the in broaden SciPlay that a monetize a I I'm environment. level obviously can a since in note XXXX. important we to that we have top still is further little demonstrate X in has if is actually casino tremendous look piece continue going one the our out that portfolio in just the the years. we We grown tremendous today. social space, evergreen -- across drive monetization natural that alluded down, sticky confidence has in just in market subset there that there's half and of things at All-Star driven where we've kind that a we to breaking And since of its -- And SciPlay's normalization grow business XX%

tremendous growth there's that. market SciPlay with and in share upside in drive this improve So consistent monetization improve to space and

to payoffs again, monetization this investments we the continue from of from is and the continue these leveraging base. Project its to evergreen All-Star, the engagement SciPlay growth going drive initiatives, see to centralizing engine, learnings which in So just,

We're And so that our ability SciPlay. when in that business. continued launching with casual, for to the very games there's that tremendous layer grow diversification you in in on we're confident new upside

David Katz

people the to your more follow-up you all of of have out human the prepared Understood. do my you remarks. what place added, feel thinking you around to And you in you additions we whom capital you called Do of number hiring sort need should do? some as go? in of more and is like about really be Or

Barry Cottle

I I'll from perspective Great strategy, are a today. question. sheet we've been never and think saying balance than start by in Absolutely. better a we position is talent

roof has is and that #X think pieces a that few Investor under that this at capital place. do least progress. I I've just to strategy the we're company. mentioned, high-performance have I priority culture a times create do making things. here great best global talent lot our the the since a the all around in capital you role, I been whatever -- think and think perspective, introduced to those took the my great before, we to, We of referred at people recruit leading game And cross-platform in folks industry win. And Day. I regardless of great to major of And to place a an -- From amazing as goal I become kind So

we've of this. being We addition just we've key space along announced Blanco. team figure XX folks think recently the of in Lukas and the in amazing social just and world's the gaming, of casino the designers. game gaming But alone. Victor with I gathered Roxane done iGaming We've mentioned over greatest talent an brought

I second you say But business. in part can in we I answer your can been that question, this place successful extremely being in so will we've #X our of also And great -- tell people to the putting stop this priority. never

have have never never enough great can enough great designers. people, You

so always that's And that, we will because on us great. makes what in lean

Operator

question next the Capital from comes line of The Ryan from today Craig-Hallum Group. Sigdahl

Ryan Sigdahl

Connie. want in start Barry, gaming. I to

less. peers, is start how a we the like see we and at to lot from market I the numbers a So good growing more when content. team, reported relative have look of share everything with share it of the kind through this with building acceleration guys can the internally industry market When cabinets, kind kind the maybe product, or on to guess some standpoint? you of of building you are talk things seems

Barry Cottle

question. Great Ryan. Absolutely,

would describe I it. how Here's

progress made yes, I we've I the think in years. fact, So significant past over X think,

grew and bringing past our focus first was and on And If to XX% and pools quarters our And top the we our building out strategy meaningful X of playbook that drove profit team North consecutive in quarter. portfolio you this of our year-over-year largest map growing in on you list we at remember, while map growth road terms of the playbook this setting premium just remember, prioritization. was road priority. or biggest that, been if the the our But business. which or X years segment, We've ago. America

look on. XXXX And last last X Kascada have Landmark And so and X if we just started and cabinet, cabinets recently, that titles all at the the Mural think out, them. Dual years, were hits I Kascada and you we with launched early that #X you -- have introduced now the we chart-topping with

so a chart-topping time, portfolio we backed X And all now segments by in hits. the for critical have complete first

proud we've we that had. extremely got while to ever over amazing market a full design months, the we building game such the best out team had. portfolio best have in footprint And map, road the progress made an while so are we And the we the growth feel we've drive of ability the now have road ops the team, X We've to great our about look forward. in map XX as going next we we meaningful ever

Constance James

a replacement like launch success And the great Stepper just here, a is lot of Barry's just might Mural. market the start. is I that, point, into we're that cabinet to which on seeing as off you Yes. to build, we in -- think with again, Ryan be to phenomenal which, -- I But products with

which over penetrate And dual just the some I is performance we're average, house screen know performing we we to that's that that, phenomenal. think we've catalyst seen segment, another continue growth. Xx as for

of to forward, opportunity that to to the yet. we haven't do expand going look we're ancillary say I'd some these markets, start which as just had Additionally, we into

replacement to expansion. really was the openings which beginning, of Barry that But new win we mentioned, in we're expand the portfolio. important in kind was in core it As largest that the and continuing opportunities,

feel we we're about where really headed. good So

straight number confidence Eilers which a If take of us would you chart, to a looked at to to the of gives of have ability the top in seen recent our you lot the continue popping report, our share. games

Ryan Sigdahl

one Great. for one Connie. more quick you, Maybe

you on in you at or lot as confidence million, a to can I kind fast is can? quarter QX look as you deceleration from what But of, there. Just be the guess, it the stock buyback, a $XXX implies is it where have in aware in quarter, blackout of like clarify anything of last stock I $XXX if reported to sounds anything a given you here buying period be million, the

Constance James

Yes. Great. Thanks.

First, making outlined say pleased share incredibly We've terms about million repurchasing our of XX% a that we're executed the program. program. we've been already of in I'd $XXX progress We with that.

to our today, is that share continue that Where will by we You're and value can tremendous execute be absolutely repurchase our right. see to create on. shares, we price that continuing we something

into to see move to going complete cash tremendous as much we And element the required again, opportunity program -- of some forward, share a metric. there to flow in that see, significant already originally quarter free in in which general, sports because tell our going in which will ability we generate we In pace the quicker drive we the shareholder terms a value. than And We is an is material you for that us moment that been proceeded, cash we've pause had change as information. business we're I what was given pace say, we key But X-year we and deal I'd be the that in were and that can nonpublic moving, outlined. market. the back at likely just the our we've know to per

And see again combination now of just we so coupled tremendous with business that program, create we've the shareholder the our created, to opportunity repurchase share value.

Operator

the The from Stantial question from today of final comes Jeff line Stifel.

Jeffrey Stantial

core to start I land-based wanted Great. on business. the

hearing Just half back regarding year. capital and of from table the curious what budgets to back your into you're for pick systems accelerate up, customers games starting the

we've an approaching you so, see those X and the been Slots? Tables? that businesses been for in relative or just the seeing how momentum lag think starting for XXXX should recovery accelerating replacement to Systems the levels of signs Or has are given the of couple past in cycle about in slot Just quarters to we

Barry Cottle

in increase experienced and that to, And game growth strong Yes, and great in is it as way, we've as and entire X CapEx. in seen operators, with we And great conversations been COVID. you fact, businesses, to the the recover with you segments were By again, sales, question. with momentum I saw we've XX% the having slowest the portfolio. here you said, quarter-on-quarter. post in those news both And think we've alluded too, that sequential saw now the the realized,

And increase the XX% increase the subscription table iVIEW X. with a in see business You we've VALT. Shufflers the over seeing the side had on of -- with in demand it here in on business on -- now over you're XX% system the increase real our

momentum the in the And and then so it confidence demand going the the market in confidence in to speaks, forward. the the I operators' think, player GGR,

across And of sales, it's so that game where our it and lines to ops came business early that now -- we're gaming. in X in seeing game all in confidence then

both So we leadership in have know, you position of a those. as

in so category. we more benefit so this And even

happy And so it. we with have -- we're very

continue. this amazing from have position they'll We to and momentum strength excited in and conversations have, segments. we believe the see we're both And we

Constance James

Yes.

Jeffrey Stantial

Great. That's Oh, it, for helpful. very Connie. Go sorry.

Constance James

kind been we've as I seeing news, say, a just to I No, what said, by of that in this on the momentum XXXX. tables, go going we've as you're perhaps camp recovery. recovery I of exciting and in a systems the full just just about terms what thinking overall bullish gaming lot was market into broader And business. building And on you're think hearing thread Barry of an think got is, a really those

fully of are kind rebound XXXX. to So again, optimistic continues that we market recovery by

Jeffrey Stantial

side Great. then for of moving the And equation. That's color. very margin to the follow-up, my helpful

call XXXX? logistics And you're is Just more that front. recently relative spot this in on more kind trending how your lead QX? to improving given supply how rates? any relative in it seeing costs, Are relief your chain you the of recently tracking on just earlier are year, seeing average to times curious what we're And freight

Constance James

that environment start I'd navigating we are incredibly well. think supply chain with I the Absolutely. Sure. first

It's the we've to again and fulfill the chain. see great been the market both had really just performance I think particular half evidenced ability recovery demand. year, We've just supply the fulfill our in first in of through by that. that's to the to growing ability our proactive

competitiveness Tier ever that's of a that You've in do allowed X couple first the was better visibility us operational a of couple we actually we've of it's business strategy sourcing One, X in that's as to those which, to suppliers, spot offset allowed some suppliers. us things. supply which well of put given of various One buys. also chain suppliers. that price is to terms in has I'd drive dual a increasing of benefits. provided into level got of stood say savings, we've us one the us significant helped the a times obviously diversification associated point, in X But it's had allowed freight terms chain. up some And really Tier creating we your as probably a And efficiencies of into terms global those depth to than leaned heard to with supply of and us me costs say

very, we given So those steps all proactive from took. in all, perspective we're a that healthy, product very seeing margins

but call gaming, business bit that X. anything really terms softness out hardware little well in You from sales more else of margin driven would in of the the issue was coming as games through in the a the mix than would iVIEW seen, I have as by a

benefits of remain those to bottom Over in line. as start should normalize, very product efficiency say So overall, of we operational some I'd healthy. chains margins terms the really supply to see time dropping

James Bombassei

Appreciate it.

Now it turn I'll over some final for to comments. Barry

Barry Cottle

be and in a tremendous company, games is of market there's $XX Thanks, better Jim. opportunity. to and success our to nobody positioned no This had quarter. we has take billion this year been TAM pivotal advantage industry, for the believe better that time We this

We drive shareholders. a unparalleled vision future significant significant the generate are the excited to generate map and the competitive road and positioned market capitalize opportunities leadership, and advantages take to our returns clear couldn't be market more ultimately and flow share, about unmatched cash are long-term we to assets and on you. path ahead uniquely on value. We with for Thank

James Bombassei

it turn joining want earnings over everyone to the for thank We call. operator. I'll And to our back now

Operator

today's you. concludes Thank for Thank all conference you call. participation. your That

now lines. your may You disconnect

Light & Wonder (LNW) 10 Aug 222022 Q2 Earnings call transcript