LNW - Earnings call 4 2023 | Light & Wonder, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello all, and welcome to the Light & Wonder 2023 Fourth Quarter Earnings Conference Call.[Operator Instructions] I'll now turn the call over to Nick Zangari, Senior Vice President of Investor Relations. Please go ahead.

Nick Zangari

Thank you, operator, and good afternoon, everyone. Welcome to the Fourth Quarter and Full Year 2023 Earnings Conference Call. With me today are Matt Wilson, our President and CEO; and Oliver Chow, our CFO.

forward-looking will and fourth a that operating call contain we year and question-and-answer could call, involve discussed will results may during to XXXX performance, certain from cause today's actual discuss and differ quarter our full session.Today's certain results During risks that materially uncertainties those statements followed call. by the

the Matt. be in recorded. call over is combined the of business our in Gaming, third include archived both and I our filings most relating uncertainties, with comparable section to discuss financial these reconciliation this of we periods.We regarding measure in businesses iGaming. reporting to refer and measure material the reflected continuing earnings information will a website the these also website.With reminder, website.In A please to and to that, replay SEC.We of the operations and found being continuing our non-GAAP Sports risks Partners comparable our of well the in be quarter. the discontinued Brookfield segments; statements and our will turn call prior we the Business to Investors operations can and Endeavor have in and conference will call release the certain this measures. of as earnings for completed our sale referring disclosures are of For Lottery section posted Accordingly, X consolidated A operations.As a on materials to XXXX, to Betting business operations our each this the of business sale results GAAP as now each our non-GAAP discontinued webcast our directly in of description non-GAAP second of measure Amounts as in and quarter the accompanying SciPlay Investors

Matthew Wilson

Thank everyone, you, call. for thanks, today's Nick, and joining

consolidated revenue continue growth to as execution our performance consecutive company's the quarter momentum, achieved again marking business strong of evidenced the throughout with key up continued build X board, year, of we Light now and of XX capped objectives & once growth quarters year Notably, announced upon strong financial quarter on we a X off We we for by banner the delivered businesses. our last quarters delivered performance year-over-year growth. have reflect foundation. over all and the in our across numbers year, XX% fourth double-digit consecutive since double-digit fourth revenue as Our Wonder and consistently results strategy.Our transformation have

a would we As the consolidated to this year year. for & a Wonder XXXX.Looking billion reaching result, record like back, with ended revenue, our what you I defined past Light with XX% a and drove share increase success in $X.X

firmly sustainable financial with long-term enhancing in invest leadership and continue investments and not an do that future playbook, I the transformation.Our able disciplined our accelerating the with before an our we Light position the value, business drive expect entire that in experienced of to to we improved exceptional and investments commitment strategy product We something allocation to we year. & winning quarter commend mentality. of ability our capital a we Wonder, R&D to team proven were support and to talent XXXX, best-in-class have a aspects have offering. team believe and I an Throughout a outstanding for executing made the outstanding strategic our on

franchise our with release notable and hardware pillars, to around a with Train America. execution on have for engagement creating in Australia refreshed our Dragon and growth strategy achieved pending markets.We demonstrated continuing share growth the product differentiated and our gains adjacent drive both markets content operator and core sound impressive popular in We in North key

be machine video deals to and expect in operated we recently amusement lottery Oregon and coin well another Quebec, markets, in as adjacencies notably terminal announced has extension been on the our in progress differentiator active driving market key and we've success. as considerable horse in historical made also franchise where XXXX.Capitalizing markets We racing

shifted our another further social businesses, from ecosystem.In focus across our allocating continued casino We our franchises will the in the on higher our which space, building to coming resources entire have in share market online markets with which new digital revenue leveraged detail. our had SciPlay record to of majority evergreen and game momentum extensions, and now be niche we quarter can discuss

a momentum improved Our game driver markets.These with benefit for & both returns iGaming demonstrate R&D performance continued strong our to results U.S. Light Wonder segment the driving robust reflecting the impressive international with of investments. a in on growth business strategy, quarter our be continued and

We iGaming coming as as see continue market the compelling to opportunities to over continues this years. develop

industry-leading development the is we Light Throughout executed to exciting performance about all For it & Wonder, impressive with uplift. digital pleased games on efficiencies our on our channels drive continued have cross-platform year, driving metrics.In continued content being realized strategy revenue and all that our game. truly across to build with the our product addition, strategy are past we progress expansion

be opportunities are a units & industry.I will Wonder. to highlights. operational to We turn for progress a our pleased very business across on unit with strong Light considerable as resilient we to our the now continue in driver continues capitalize Gaming our business gaming

will in on quarter Our premium display, exceeding are operations, which results quarters. performance quarter on the both our in X% ending games largely revenue strategy, maximizing deploy launch our evergreen unit Drums, units, testament Game the into which year. The company We casino year, Monster ensuring and of we our momentum large-screen and focusing continue such is record, is value top a strategy of over North seamless and investments mainstays, were casino Ultimate for Dragon on floor the floors.We per globally each and the by base shipped in games such performance develop we on fruit line year. to as driven cabinets Fire was XX,XXX continued and continued onto year compared Dancing biggest the Puff, COSMIC of sales, XX% with immersive American up our extend XX was the Company's for build every are as to with new Squid America expected the an year-over-year.These full Australian recently, year. full top-performing and N' fleet are as and bearing for units international full franchise and Horizon XXXX XX% increase increase with extensions, XX% highly licensed North gaming Train, or saw the and and the the to featured in increase Huff growth, heading growth for consecutive on player installed our Link, prior we an strong providing levels of anticipated outstanding This highly history.Our the momentum experiences.In our units an our XXX successful game by to validated delivered XXXX, to a day for the jumbo optimization titles,

evident North segment share XX% Our both market progress over year-over-year. growth markets is the in exceptional both and maintain replacement we continue to in as in with America Australia

notably at and enhanced cabinet, wins access by driven into named new We KASCADA our systems. top player continued and such series on cabinet screen, announced Loto-Quebec.Moving features, the our expect for performing Eilers with Oregon KASCADA of which the to with as contract premium included giving our greater growth dual insight preferences. XXXX key driver recently was capabilities portfolio on Highlights to product more loyalty operators deals

as gaining on Global as that in as including choice and Engage Mohegan cashless, South International deal Airport highlighted every journey responsible systems Reid why to with of traction in-demand our initiatives. operators, for we to the demonstrates intuitive, fully participate software at Wales New Korea services trials INSPIRE platform.Our the an focus We're regardless Expo, gain by excited Harry continues Gaming which is currently preferred announcement curated touch gaming in Australia, in recent are point hardware. product the for addition or traction, providing we vertical Our in we at Resort Entertainment location, customer we in offerings such

in up a of proven still Overall, our where revenue table very hardware this product recurring innings Wonder with on and it revenue expect portfolios up, helped extensive success.To & Light through XX%. its be the to in investment have and best-in-class global product higher I'm drive we for products and to known record growth of in Tables, of in Wonder our expect space early innovation expand performance industry our an gaming. to in to with continue The IP. operator markets we to this customers library leadership maintain to and an We partnership with leader is we market.On track sector. bring comprehensive sales the long-term most pleased the target growth & sum Light innovation position streams through the recovery

positioned strategy to well every in SciPlay. focused are our [ capitalize opportunities important new product with across this a on framing we to segment.Now, offerings turning category and Importantly, ]

and Last year.First, over quarter map.I'm performance objectives the portfolio, both social our investing for daily pleased expectations of harmonized integration development all social now our be both in key has the executing SciPlay consistent X now the SciPlay the on a across for per We we highlighted We market levels. very beyond a with again growth on consecutive year. businesses. and process continue to of XX% objectives, to have and the scaling casino gone share well road and for that like SciPlay; the fully executing space. gained year, the market, XX% cross-platform strategy execution. through we these strong average are consistently reflecting revenue the that part SciPlay our active a in course delivered grew year, product in outpaced share I'd integrated pleased is in our revenue user and breakout I leadership record casino both more our outpacing and have quarters engine

the a on continue $X, in daily launch XX social games, to games our land-based both year-over-year Drums was user portfolio record platform. Hit per increased our user active revenues, Our as Gold quarter. enhance Live as levels Fish and record success we revenue per Fortunes average titles our continue success paying ] Casino Dancing posted and a Slots, Party, to Ops quarterly app our X we the to to our largest engine testament of approximately SciPlay strategy.Our Average expand through XX% [ revenue was monthly Jackpot of Quick recent also $XXX

continue developing invest and will drive sustainably core monetization franchises.Entering our of product to direct-to-consumer and our long platform, we map to focused continues capabilities & particularly be are our margins SciPlay in continuing strategy. responsibly, loyalty, value. enhance a on engagement, grow potential and term year, in while and to we will Clearly, road to which engagement growth a big new We our and Wonder and grow part for over the expand the accelerate valuable player overall Light expect to lifetime player driver relationships the

from Lightning Going forward, our growth to on our China the games Quarterly expansion platform the Top and and differentiate tremendous content portfolio - with we Playzido, with XX operators full Street, a from X table titles, revenue in for casino the we and largest at and iGaming, is in one all map from look our Pirots $XX our record offerings social peers.Now, highlighted the and continue demand growth industry, looking accounts record The content the as across record of quarter. testament cross-platform industry-leading see Of a continue Box and and quarter scale total, content U.S. content.The Lightning players. road our of Ultimate markets. million, to of reflecting launches best-in-class over games the providers us third-party by extend approach. XX% first-party driven be a enables by OGS increased with aggregation development record, was Box.In our demonstrating in further content the to to Elk, and U.S., Fire Cash our we our addition, land-based also GGR those international the further Link growth the year-over-year to revenue Falls continued momentum unmatched to year X/X

announce offering, as the and Nugget casino sides closely DraftKing. positive quarter collaborating Street, are Golden live with working in teams has been on very with live both initial Entertainment we Penn bespoke Michigan we pleased and Rush operators feedback went with product functionality.Importantly, continue with operators agreement partnerships include to have an enhance note which of will network Michigan, collaborative additional other to our I'm for our that and tables. which with in The together our We on signed taken

early still opportunities stages, While we in regions. are we discussions on are with into already in expansion other customers

will Elk U.S. digital growth Over are the we X and on steppers iGaming expand epic our native title to long continue accelerate monthly, already initiatives, we fast-growing and into IP for services titles which features, as to momentum business.The expect game land-based we jackpots game launch and of our market, this the such brought plus to XXXX, through well offerings and scale placement game table be all X to jackpots, Studios execute while multiplayer regionalized content and drive term, focusing marketing is with us to key and to-date our look launches expect as a have and promotion.As road a our driver map our further success extend that expansion as on great markets. and original new we

We Light the as iGaming progress future & of for are growth our legislative optimism encouraged in Wonder. the by confirming for driver Brazil, legislation a

well robust product very initiatives. when us to number on and portfolio of proud of and Our accomplishments drive we arise.We are in footprint legalization XXXX executed positions growth. our as a strategic future execute scale, will impressive opportunities key globally offering well-established our expansion And

Our to markets. opportunity further Australian last our exposure further position continues presence October to May. the or our investor successful Australian This Subsequently, successfully and & the broader inclusion well, feedback we exceed XXX secondary in investors, Light October. capital Australian the from on cross-platform ASX Securities of enables a mentioned, as the Notably, listing in collaboration to expanded completed closed Exchange to-date acquisition our the Index solidifying SciPlay on base our were previously in integration ASX accelerating. Wonder's added with global we we expectations.As community

the strategically of Provider of of named to Gaming strategy, were go testament as the all not Supplier the Awards. to we did conversion report in also garnered the cash I'm that Year and International & the the Platform distinguished shareholders, improving at we power several Full Multi-Channel further year.As Wonder's past pleased and to investment demonstrating North continue were at our this reducing the our a Finally, business portfolio. our our of success also capital cross-platform increase return American fully leverage. unnoticed strong industry Awards, named We EGR Light we as Year performance Service awards the while well-run to

momentum Notably, at all accolades at the in leadership Asia Our the as in recently was SciPlay were was internationally Social the teams of unit and recognized Supplier year.Our of we Global Casino business London named Awards banner and in received Gaming at also named of Year America. the on SBC Operator back Year North Awards most a Casino the ICE as well.

the acknowledged the were named and by and CSR our at Additionally, we Gaming for ESG efforts in Team being Awards. Women Inclusive Diverse Diversity

and gaming key our initiatives have transformation, with industry, Australia. with us our core a that industry will employees us, we responsibly strengthened educate as positive primary on practices. evidenced the also and are on services awareness starts leader our globe, values.Our to organizations on part As and Cashless our can be in the of policies to products commitment regulatory influence with we to focus across create gaming responsible our driving an collaboration of social Responsibility recent responsible as be peers to that and enjoyed continue drives

best-in-class us social our as path attract up, in positions and well as strategy to on of talent, Wonder.To delivered will capabilities continued ability long-range environmental, be our top to corporate XXXX, priority we governance programs in achieve with our The for XXXX. we and along results strong to our social Our and it cross-platform put clear market established targets. a execution efforts Light a continue sum & expect responsibility

brighter Our and Wonder teams Light than done tremendous job ever. shining & have a is

to his will to He benefit that our of that, global year, company.As on to success welcome strategy.And games in played we with last CFO. and the in delighted Oliver. team. know, confident be on to driving from financial of leadership are as has named continue pivotal am We role execute senior transformation, Chow officially the to guidance I'm it we December turn promise cross-platform a and Vice as officially sustainable I over growth was company's we our you leading continue the Oliver deliver Oliver the and the I'll of ready Executive to expertise President already

Oliver Chow

Thanks, industry be Light our foundation, and I for financial as to the times leveraging I'm and are in performance. in & That able continued of the many has steward to to Matt. operational solid and as is our that take to role operating business focus on global forward.Turning to full on build placed opportunities growth, and base We Wonder. us part moving both exciting of in forward It I my investor company, year. CFO my and the top on mission honored the look of working cash-generative These and to confidence I for of of investor our us highly it our a with line the capitalize the bottom appreciate said, all strong quarter seriously. very you with XXXX delivered presented were a capital excellence.

increased consolidated For new quarter, revenue $XXX Light the $X.X to was Wonder. year-over-year for revenue XX% consolidated record to & Full a billion, XX% fourth up million. year

XXX hard the Our driven increase restructuring AEBITDA $XXX year. the our and $XXX quarter quarter $X.X for of over growth, was million XX% top team the billion, across XXXX the upward increase results on XX% efficiencies.Adjusted a basis million the lower over and for a by D&A maintaining year margin in operational top margins units the NPATA quarter, primarily trajectory compared growth with XX% for of point and with driven executing continued the strong businesses.Operating double-digit were, a year.Consolidated continued AEBITDA X line was financial of prior consolidated grew million, costs. businesses. XXX the and a business prior to performance.Consolidated margin all We primarily strong grew $XXX our year. of fourth basis We year, reflecting quarter over was the million income the levels and to compared focus double-digit line an for operating to over million increase and XX% tremendous income saw on prior the talented higher, other to period, points the all our again, by $XXX year of XXXX all across growth our XX% work period, Full in was $XXX year AEBITDA outcome

million, in $XXX to the this profile lower the the strong the reminder, is to as paid continue company, with by XX% due growth Revenue by run.Gaming prior proven operating and prior the In execution the the the per XX% grew in flow prior a comparable by portfolio As exceptional AEBITDA which to American and robust to a revenue in not compared long against year, XX% to line and year, related expect to financial the was was the prior completion primarily million on quarter, solid by XX% XX% taxes in impressive increased we sales driven $XXX product billion year $XXX market year of This in were different grew we included all by metric and compared revenue across interest strategy. for historical profitability Gaming, year margin year our was million tax debt due to quarter to American enhancement year-over-year, divestitures, quarter $XXX continued million our our XX% consolidated sustain North as is payments.Turning quarter. game revenue revenue materially and the and as to to was led to international units. primarily year prior up increased well year day. installed current period.Full driven which to cash prior the divestitures.Consolidated initiatives period increase in of year meaningful to the Full $XXX $X.XX in the operations cash North AEBITDA period related our $XXX Comparability primarily cash business to tax $XX year-over-year the trend the increased as business given the $XXX units. and flow million the and not in XX% we growth in against supported period. million, over year-over-year, delivering million cash in to the which operating performance, the with divestitures. by quarter margin payments levels, revenue execute million, base growth X% AEBITDA growth of KPIs,

and XX% prior to installed with X% sales the continue Our revenues optimize compared X% the base grew American driven XX% our and quarter were sequentially premium America up the in premium by game year-over-year. day international North per and XX% as the games fleet.Global year-over-year. grew Revenue our in we of performance quarter, year, in in North robust to

a units addition In large the also U.K., replacement affected of to market, replacement which in momentum the the continued into price selling American quarter. North we over average the sale had in X,XXX

the as recurring We enter sizable expect continue sale property maintenance note, a higher we on continue a service year, new the in in into the affected Asia there adjacent this we ASP XXXX.On to to in revenue dynamic expand for to prior hardware was which in meaningfully To where revenue comparability. Systems, stream markets more quarter. and and

dynamic was the our over segments quarter execution with to on grow by product the game decision of return launched throughout the portfolio.Turning health leveraging again, in campaign we year ops execution.The against the nascent outpacing to the Joel marketing XX%.Full this points of great develop casino such a XXXX, higher next AEBITDA expansion of year-over-year resulted Every Casino and first content, XXXX the recurring on we over business. history. half, to record costs, Fish on SciPlay quarter was SciPlay's payer performance, on Gold over with $XXX $X margin flat current strategies, and primarily another a daily up year third live to was active in We to and compared is monthly capabilities million, marketing to of up have past once and rate across and higher million share DNA. XX SciPlay carefully expand revenue paying driven we year-over-year, talent users heights SciPlay to increased Fortunes opportunities the broadly, average remain our stronger up increase both $XXX as business the we year.Looking in and the XX%, prior XX% monthly quarter.Our and example the quarters all up year Revenue UA delivering and games. active revenue investment as has $XXX the Based considered margin paying to the marketing core SciPlay. and several effective and to and metrics. product identified be year our timing basis expect reach tables innovation new of in look time, record XX% monetization saw underpinned investment revenue investment Hit, McHale daily double-digit UA users spend ahead market in ROI both several XX%, and prior quarter sales, record margins Light to revenue sales, AEBITDA the and to Wonder's Prudent & gaining continues metrics. expect key new is We, million, per uplift revenue. analysis, and of prior conversion revenue due and market user at gaming we million significant were average and which over to in along the fourth notably per Quick full more new number to and year, we reflective XXX XX% is with saw record years, on robust highest markets social delivered innovation $XXX solid of the quarter, AEBITDA gains monetization, in was significant steady, in $XX XX% diligent a quarterly to user increase expansion Lastly, XX.X%. compared

this casino such and fluctuate opportunities, across gives confidence all of term we're performance portfolio. further SciPlay core will Our value-enhancing well $XX U.S. markets land-based aggregation on performance the growth is in scaling momentum the platform. launches content million seeing as and success year where and to and our year the fuel in $XX AEBITDA Revenue year-over-year the with which near long-term million. up XX% million AEBITDA and direct-to-consumer continued the the expected to social execution these the as greenfield to iGaming, incredible original as sustainable XX% level to increased and our achieved This $XXX in our growth.We grew applaud reflected revenue in to million.Full initiatives international margins of XX% development platform by our strength investments, increased in our was XX% of quarter $XX third-party us of business.Onto

year XX% not year As driven on revenue AEBITDA an improved XXXX. by digital versus This reminder, do to operators which from growth. points growth in period, the in we the quarter. America also our strategy, through in expect in benefited prior iGaming also resulted from numbers certain quarter we portfolio.We record termination from player XXXX reoccur pivoted year-over-year for to we processed platform with in saw fees margin scale increased a while the international our $XX.X of North markets as high. XX% record the they their investing on in AEBITDA overall margin solid in as to to XXX our our benefit continued basis a platform Wagers both billion, and

and GGR continued with the Canada the increasing up content, Europe driven increased year-over-year of first-party with with across third of scaling quarters sequential continues network.Ontario growth land-based sequential of XX% each improvement, ramp and volume region in fact, in by with Lightning content. our saw partner and driven In Elk quarter marking along U.S. of with we to was U.S. also volume market growth. The GGR double-digit first-party OGS year-over-year volumes Box by content. quarterly performance highs, record in reached record XX%

drag to portfolio.Going with Live ability aggregation Contributions and year, We we our with business. time.Over to product in our a a the during I from XXXX. as margins we to robust the best-in-class to and be we've managed further and our businesses benefited termination fees to continue confident we Casino am from and remains into AEBITDA past modest in year continue is are base up platform largely we diligently XXXX, the on as identify efficiencies. our excellence priority well expected growth this in excluding expect positioned iGaming expand our integrate business over offerings in margins expanding a cost expansion, we invest Operational expansion. line market overall ramp top margin as drove scale and be

we and X healthy through that with optimized R&D that Importantly, ensures a year, CapEx assessment a rigorous our will results saw maintain platforms will this we with ROI. into approach to all strategic output pillars.We to business growth back of and the propel continue reinvest

will of our we success phase. into Light our the and throughout this importantly, in to drove More technology, and & people execution backbone Wonder that invest continue transformation the

scales, team As associated shared and through and building our throughout costs other embed functions.We to providing scale. services expect efficiency organization support proportionally, to we business units out are management the increase a methodology drive to corporate also for lean business the this

are across act with training to arming make organization. the and difference owners like them teams We and to challenging tools our a

the improving said, expansion that the and expect elevated continuous will reminder, our approximately X.Xx. interest second process unsecured I our strong other role, transformed approximately notes laser profitability we net million, a we inherited that CFO year improvement in we approximately a and to within the As business a of fees long-term our our million improvement by debt were our staying $XX as through $X sustainable the in a have October we have we profile. ratio and gaming expenses, of a driving stay savings. our completed will rate sourcing turn in legal reducing by range senior with cost prior $XXX efficiency B, of in total, to drive to points healthy for financial with quarters balance targeted refinance debt and Recently approximately closed profile sheet of step across XX repricing XXXX.That annualized million have in in and a prudent we we further on QX, term XXXX, developing our which to SciPlay interest in continue infrastructures.As we an margin able in I'm before expect fortunate committed X.Xx impact January, the we into ended we IT deal value-enhancing a million business X.X expense of basis to leverage and the focused year out interest over savings.With first After initiatives, ensuring X.Xx, driving scale costs called $XX annualized loan X.XXX% to and processes, improve

review $XX going forward, flexibility access further in enhanced and cash gaining payments creation year the we tax $XX cash sustainable million in balances.We million to in by optionality and continue $XX by $XX consolidated value primarily and flow year was supporting to primarily the activities. associated in of the cash our with as year consolidated affected quarter. was SciPlay's cost balance million the period $XXX the generated is affected profile million, strategic related sheet the free prior and million, divestitures. and divestitures reported The in current optimize the taxes Full providing SciPlay $XXX activities the the flow business on strategic growth Our while and related for by to cash by affected free to cash was related review related paid million supporting flow cash cost cash the from merger,

basis XXXX from stayed bottom off. items, costs XX%, restructuring flow as increase the translating cash Our to the dollar ahead, we roll excluding committed transaction-related we year prior to conversion point each expect line.Looking free wind as costs the to aforementioned was rate, a down X,XXX

term, capital continue to cash driving puts quarter I some time opportunities.We enhancing shareholders continue monitor on our during interest a share continue in value. rate before, tax executed based opportunities partially to market continue with But takes commitment of positions growing we we've capital advancing thresholds. base. reduction, allocation through of through lastly, by capabilities $XXX return $XXX at to and sustainable bolster and priority and balanced $XX capital to for have have million We'll savings annual conversion over the shareholder working returned installed exceeds to increases support invest growth increase and is driven will least flow initiation going quarter of be debt in we key total returning largely by our of shareholders of the opportunistic on evidenced is the XX% substantial forward.As growth million long-term which disciplined as gaming, authorization. as repurchases decisions set seasonality our payments, returned flow to to through premium our driver long to items. cash for highly repurchases; capital transformed core people and balance and of returned the businesses, shareholders, by our mentioned offset to capex, ROI, which In approximately leadership Over during a to we in our sheet; million key cash and in will do: to expected what XXXX, invest share which the other cash-generative and focus the our a of capital out capital remains to returns.Free we a investment total our high continued program, and expected Since we XXXX. flow-through and framework; on the generation We'll program we

deploy to team partnering I'm take level. capital and in value-accretive to ways to Light remain evaluating excess and Wonder, always context executive here be options we we'll great shareholders.We That Our at balance and only our healthy to excited will Matt the allocation said, the have all extremely the next us team a be sheet. & most available with capital in priorities of the in flexible a

turn have to confidence will is your strong journey strategy high We of a our core culture resilient dynamic momentum it best and that execute continue all, continuing.With reflects accomplished industry. in to-date our questions. What over to for operator to to the that, and our teams growth we our in

Operator

from [Operator Instructions] Securities. Jonas Barry question first Truist of Our comes

Barry Jonas

us an talk progressing. give Maybe you to about Can update road on how $X.X the it's billion?

Matthew Wilson

Matt anticipated question. We that Wilson. Barry, Yes,

a and year. all, the for of Light & congratulations. the employees quarter What fantastic fantastic a line on Wonder First

XX% we grew targets our growth Day 'XX, We double Investor a put CAGR necessitated was off impressive the XXXX started with there. we at digits. our on vantage rate impressive of this May closed my to journey us get think AEBITDA I XX% when of very the think of which equally It businesses all out for things just was billion. one line, point.I a X from $X.X

validates have focus strategic So, the we the to we made portfolio organization businesses around decisions the really of that content.

$X.X I think the we and can have investments in also doing to think the optimization. get to We've kind pipeline place plan feel this $X.X we recalibrated the to team is our the billion. product this strategic and fantastic very continue of around just confident just billion.I the job a pathway talent, cost

efficient equally think I they're on sustainable focused are growth. as they growth as in

leading had, we get the to to pathways and with there, just quarter had of lots the may year momentum feel that you plan. the strategic of want remaining years and us So, just we great like some we But add detail. into Oliver,

Oliver Chow

achieve us Barry, lot Matt. core on business. tremendous our as Thanks, units, share We fifth And to continue need our in our business to in in gains our know all of momentum to against obviously that's X commitments. the across to Yes. modest mentioned, gives And we quarter the across growth revenue execute what have to core, Class year-over-year posted a growth Gaming, we just to III. Matt ability deliver consecutive confidence double-digit which of continue plans.We do

and the continue growth operations critical We've an to you the us into sales, products here to and just strategic expand past next for for -- XXXX in The State grow gaming demonstrated leverage and over growth. be into in game continue with particularly importantly, North COAM launches first growth continue this mentioned the Oregon stability game effectively in done our we grow will over in both recently have to here long-term lottery, leverage into team we'll while going best-in-class across base, player we've sales and deal to key the we'll premium being space.In strong the America engine more as of our that's couple also continue here and Josh continued expect North SciPlay But investments half.From proliferation the scale so SciPlay growth lastly, market in us our UA for also to be deliver announced years. we able as land-based and marketing and adjacencies, So, a base. markets, and in game to exceptional be we'll made perspective, entering We'll cross-platform, do iGaming, the And that's revenue to of just Matt to across expect installed Australia and markets, ARPDAU Loto-Quebec. we the continue drive the record some the XXXX, couple future.And across job we our portfolio. continue sustainable earlier. also Georgia in for we evidenced share titles seeing in of saw America, to are to proven we us record seen then, expected that drive And global as years.

we XXXX the just we has contributor only in throughout year. see our the to full the in were And margin, for continue of we give in opportunities our us and healthy growth to but a ahead capture as it, the us Our over improve the for but and so billion, quarter opportunities not initiatives margin showed time sustainable to efficiencies expand only long-short key quarter, not and that of enhancement this confidence business.So past to momentum in does to lot our drive really ability performance $X.X a XXXX. deliver see

Barry Jonas

for that's guess point a follow-up. I good my

what the how $X.X billion? we're the bit of the I in you grows, about Any think you that. more investors some color conviction steps sort next beyond billion give as about $X.X a happens ask chance see after can hearing little

Matthew Wilson

Yes.

where targets. XXXX. market of moment, beyond restate number, achievable for which to ago. that an a in on wasn't growing At lot couple we're beyond to be growth haven't a in probably will of together and that to we've a engine come kind XXXX getting continue obviously the we next growth put a engine quarters sentiment We I this investors the target organization We'll out go and of back think frame. of focused there the of that is put time few years But there businesses a kind is yet. the it's conviction set laser of

not reconvene investor guiding enough. the XXXX. beyond kind yes, soon anything We'll with base of So,

Operator

Our next from question of Chad Macquarie. comes Beynon

Chad Beynon

about gaming. Oliver, cetera. just the Oliver, market, opportunities elevated adjacency But to this the some one in of Matt, how and ask industry COAM, general have the think does you Australia. it et to feel compare Quebec, wanted replacement just may like we years around team; your as specifically partners mentioned How where you're had communicating with industry prior U.S. the currently, and orders? does Oregon,

Matthew Wilson

Chad. Yes, thanks

to seems be on industry solid the think I footing.

we're think all seeing I markets. trends across end of our healthy player

isolated softness But see And kind did of we in I think January that over. healthy from was to I I think land-based areas, that's really a event aside that think one-time that, cycled we really U.S. weather. and market some end certain in in attributed the markets.

points QX of allocate of also operators to I to share a I tick the their it looking in in that think data Eilers from Wonder. purchase intentions in does think nice is which purchase like one year-on-year, survey encouraging. look by and North America forward-looking are number, casino sequentially uniquely and interesting up terms that's was Light very to There is at their intentions.So, specifically the us intentions up &

are on We focused build and the deliver looking our service great as a healthy. stay controlling customers, markets controllables, we'll product, consequence to that. I great think of win So the end

Oliver Chow

shifts that, just Yes. behavior. just And purchasing an obviously, to from seen major any Matt, build haven't on operator's we

early in we stages solid QX of QX funnel. here and starting see funnel demand kind pretty a So, do of the

we coin-in titles. high-performing trending also data from solid a WAP see In well perspective, our addition, are points and those with

So, we on some really that move see data well But pull executed the shifts. enhancement positioned don't do, to we as broadly we're operational any we've if in suggest speaking, important critical initiatives. and major levers anything would

GGR if gaming just and nimble consumer, anything resilient shifts. we'll point, healthy Matt's to overall, be So levels,

Chad Beynon

Appreciate very it. much. It's good hear. Thank you to

Operator

The next David Katz comes Jefferies. of question from

David Katz

primarily, Train, I'm to in correct, product Dragon of not U.S., over wanted loaded we've quarters. and of is happening Australia standout, driving about talk if couple the approved from the the I what That's fully far and seen next which So, and right? so some

we we us might from this year just and be drive then I just months what And product have to introductions coming seeing could understand also. color us of that for that, follow-up. of other the might you see rest one through If help quick sort in expect what us in those

Matthew Wilson

X, great. subsequently Yes, back August, We the in David. to is now went product Australian went markets. the It and those really Australia, of X in Victoria, X in very in market. well it's Wales been really and in show South this X, quickly market we're debuted this about. dominating Has excited the was market. the all numbers Queensland very New Yes, at across AG to Thanks, done

excited market-leading launch it in not So to it taking markets, about but built there Gaming, taking SciPlay that's the to really to We're down this kudos all just also taking product. imminent. the it team of to U.S. iGaming.The and our is

we've nicely. from product Pipeline think driving So operators. it's quarter a event. a this set type diverse But of interest I real rollout got building that's is importantly, quarter, next

back with pointing set of again, think, Eilers kind lighting charts. the nice a of up the week really I games last had diverse survey, release to we a

kind the proud So but see that, the not that's organization.You fruits really a the showing across from show product really we're on that the labor the just the start just up who scoreboard really financial gone perspective. the turning strategy of and the the ultimately up scoreboard teams can encouraged Dragon globe, will in of on into results around, team Eilers R&D by train the of, to entire and

that of So, about our imminent in very all U.S. and yes, and it'll launch across excited go product. is we're channels the

David Katz

one remarks. target adjective there you level, could to get follow-up. around normalized of Oliver, for sort put it notional the could day future? a in other I you in prepared we what aspirational or Understood. one your Is And whatever cash conversion just mentioned quick cash conversion know, adjusted

Oliver Chow

from couple Yes. flow of it Yes, and cash annualized to free question. look think we an look listen, going foremost. Thanks I for we're first is, One a basis, the at in ways. different at

noise we there's within lot of quarters. the of So, a know some

over but here, is a flow optimizing there, we haven't great and kind we point and will this In will we're cash is starting puts see us some I of be the that guidance we'll guidance, our there think, But of to here, coming scale really that I drive us higher point continue from forward. but takes provided for this what ultimately, sustainably going updated to terms say and ultimately, years.

Operator

comes Gallagher question next Our of Rohan Jarden. from

Rohan Gallagher

game to sales, talked feature relation Illinois. Obviously, in was leader market you've quarter. question obviously, a adjacencies, sales. this about key Outright A in you're the

and forward, the had for please? in success in particular, talk some & around the Wonder opportunity through Light You've adjacencies, Can market going Matt, early Canada. you the sizing Oregon,

Matthew Wilson

for gaming adjacencies taker and that and would a is next the years. been X% a terms over years, Yes, the Rohan story the few growth in opportunity share Yes. under. Hi last we've few quarters in These are exactly of share markets say, the I big strategy. of delivering everyone it's X here theme down

for every incremental a order is so in now. like said, get OSL has these market adjacencies you opportunity And yes, been great gain.So, naturally that us. a we share We're space in a leader

They've rolled Our off OSL best the orders that back Loto-Quebec exciting. partner years. ours is of which in the coming subsequent region, out should been great product introductory.We is of a for the We opportunity. that that we've performing see announced

expanding VLT the partnership space. is So this that into

a exciting. which opportunity, that's So XXXX is

with I our think partnership we COAM, Betsson. Georgia announced

then, proven were We transact tailwind in world, the We historical command adopter market. that and it's leading COAM that Georgia an a leader to a kind be multi-year space. starting with a in for to us. early of great in share a we're This market.And horse So, position. is journey HHR market a here the We're racing.

So markets. great those in naturally we with to share that market as continues along expand that expand,

which these build significant important.Like the said, opportunities. product, market. I the you So, in as not III for got to yes, replacement driver the with is see markets unique the the think competitive I Class business, capability discrete gaming as it's We've and are

kind is more these the the big of categories. expecting of really share plan Class modest we're a but adjacent gains in So III driver space,

Rohan Gallagher

these include you II days? in Class do And your adjacencies

Matthew Wilson

Yes.

II in in many active So markets. we're Class

adjacencies start that mentioned. So, I I beyond the kind tranche 'XX, yes, of will in think be significant frame as just opportunity for time we us. that And 'XX late expand more to the of

Rohan Gallagher

quarters? probably follow-up, Oliver. normalized obviously down a into maybe may, was cheeky be the directed lumpiness what Oliver, through U.K. the that I a by Matt, could if influenced ASP during significant occurs ASP, just recognizing materially, would the And and order you more talk at

Oliver Chow

remarks, as somewhat Rohan. adjacent in be, Yes, our that we effect know markets. the market. We these into I Yes. it leveled mentioned mix these Yes, was than thanks to expect slightly would prepared 'XX do order that that into replacement typical the had your on Class lower as III proliferate We markets a U.K. I adjacent ASPs say, ASP. have

impacted from be still that it'll that imagine would I So, perspective.

Operator

next Sigdahl from question Hallum. of The Craig Ryan comes

Ryan Sigdahl

Oliver, dealer. Hey on live and Matt curious

see adding how fruit you then enormous think really Penn, with X kind launch and plan this But bespoke across to different priority and get of that, that And nice Penn along effectively try kind to tables opportunity with lean is and Or there? here, is updates scale is the higher more you lower-hanging in and some out product competitor the branded quickly good secondly, operators? with market the to of more with can expand So, curious there. and given active DraftKings states?

Matthew Wilson

for over believe naturally We live will great a question. a see coming We opportunity. in States dealer Yes, multi-year legalize the iGaming. as years. the outlook

into look large be so, And market. active and we say just and will the future a this

of of Master We have assets. the the under portfolio IP terms hood a Shuffle in

end it's of natural extension a market. our So

We're about So term going a and here.So, the to to for position really, in scaling. market it's be going we're the it's in. nailing long near-term, ourselves

there, are moment. it can at at we're out that the we and everything Michigan, move and a point So partners other into the get nail, continue to to naturally expand where optimized, that live we've markets ironed point,

So, is into and scale big. other at and going in that the for to about sure take make be we position success to think shortage in. are the market us to space dealer moment, us we've business years, responsibility to to then coming for vibrant legal markets.But, to extended live have completely a the we we'll this the is that Michigan say, but is best want demand I natural over states would deal participate my be down to way product nailed for no is, the of over live It's perpetuity and going got

Operator

MST we up, Marquee. from Rohan Next Sundram have

Rohan Sundram

Thank Oliver you team. Matt, and

one the business. the relating Australia to Just me from

maintain Given thus sustain that? the momentum, what's seen you've to success far, strategy and the the

Matthew Wilson

Rohan. and Yes. Yes, my exciting Australia the moved career Asia. question Hey started particularly thanks me, for having for to in

really nice delivering exceptional So down there such it's results. team to see the

huge broadly in way, of growth I business which a growth sales, online think in coming material the also international really impressive X terms but things. consequence XX%.This is a share in with up be the to is year-on-year gains Australian XX% delivered to and share number. market, One of gaming XX% X% And X% to then back Asia market the were very honest pretty is at you. irrelevant, year-on-year, we from a player

investments us other deliver lot gives market get and gaming also markets products think it new contributor that appropriate just explore. global, success. there this becoming but I that down going are to a yes, great and the So, driving our to to our to of of make get our returns.So, in confidence the in, just success are is go can we demonstrates into areas a great Obviously, ability

So Dragon strong and and growth to drive gains to for a Yes, share exciting. much to than really time. in able continue and over mean, to train. add the drive breadth be evergreen of franchises, here which part us, our fuel quick have I think just of incredibly it's product Australia, our overall initial depth we'll just broader that, we'll I

Operator

The next Stauff of SIG. is from question Joe

Joseph Stauff

throughout games of improvement kind think in Oliver. about over Thank right we that you. think levels about the way lumpy the in Is X of right 'XX? quarters base of what will increased be the terms year game installed the just I growth meaning of just to about and think a per main of the sort it wanted revenue inputs, there way ask kind ops Hi, quarterly 'XX, see unit. in of to installation premium past American how and of to What's to the terms that? North monetization, about Matt, in

Matthew Wilson

and There's Yes. we of then Obviously, there. RPD doing the what growth, drivers side. are there's kind obviously on X installed major base

XXXX that the driven quarter-over-quarter. by be So, see segment like We've that'll an base.I that our per tailwind I we've base terms RPDs a benefit the better CapEx.So an point on is of with kind and then to more that you'll premiumization drives a uptick really looks the in revenue again, revenue and revenue of think will standing addressed in base see in been sequential installed amount the we're we of fleet and per kind from of the as point, sure installed an lifting in a seen we has with you'll that higher. this up, see we're nice and of to start range appropriate I'm done of the day, the product legacy in complementary games net launching inflection But of of the for think expand be time, you'll of like heavy day, that I installed my make different lot vantage the inflection point cabinets XXXX, terms over start portfolio the nature launching. the to have lined from feel kind where net adds

Joseph Stauff

first with new Train, games, And say, essentially the Squid earlier you segments. the largely before that Matt, into trickle new Is incremental by your down least of that part other at Monster of game most going ops of, fair? games you to Dragon mean affect or launch are in Games, those those, know they the

Matthew Wilson

they won't be -- I specifically ops are markets. Yes. other mentioned so you gaming premium be mean those won't titles, titles those to taken sold they

designed specifically the for the story premium that mentioned those a is So, U.S. is it that. ops in you portfolio gaming really and for titles

us the produce beyond. can for So, and in and yes, lineup what we're encouraged it about XXXX

Operator

Stantial from Stifel. comes question of next The Jeff

Jeffrey Stantial

and Matt Oliver. Hey,

cadence So, another of engine year-on-year harvesting inning in ARPDAU, capabilities? spend quarter on XX% some you're to the here to forward made would And regards outlook? up just comp. into that say SciPlay ad-tech in strong can that, think about the What's DTC specifically, mature user on of returns on offerings? the an pull and out you've here with That's product we rollout? bit you a in DC to And adoption, you what you you from more Matt, a minute how left investments there levers the all expand terms peers development? XX% on should with can centralization the More add to on of encourage adoption? execution more just can What relative to me. maybe

Matthew Wilson

question. Yes. No, great

best-in-class is I team fastest-growing comes result. -- amounts we've think outstanding with the just casino after the way wild to the and got company in back of strategy. quite industry SciPlay I about Clearly, outstanding a becoming metronomic result really taking they focused And think a share. it all deliver social

this nice efficiently.So, games all major games games. drove ARPDAU. that result. in So we've across ago make X us tools made our many the the SciPlay was all each across that to on we gave our right needed of which again, effort the driving strategic Rally were X uptick engine, holding sure the that in It to years really DAU collective just investments we about a

years. kind So this and the us, of I is mean, have for business, enemy. for SciPlay, so we the your trend up friend we're the into few last right your or with in been

anytime soon, to nothing subtract? in a is suggests apparently that a that but what market.Oliver, challenged leading add momentum will or QX. SciPlay Yes, result great for So, into fantastic anything stall

Oliver Chow

Yes.

there. think just a couple adds of I

that expect our we player enhance the relationship are of should accelerate over platform, focused -- player then our and think engagement hopefully and also I potential we our lifetime grow developing will on values. margins DTC which time, expanded

we'll of The identify we and business, continue ROI just number to in is best throughout so and continued over space.And talk about team marketing diligent the this a thing prudent XXXX. the a opportunities these driving high that UA. the Josh lot the across are in really spend other

campaigns Joel As O'Connell. I McHale marketing mentioned Jerry earlier, we're for doing concurrent and

are kind return teams the to So, continue spend time. that we'll looking to high and of evaluate UA here drive over

Matthew Wilson

innings about in we're that question in? kind to I'd specifically are we in inning growth of say the maybe And profile we of early gains Yes. middle have. the your which on terms

to DTC, we're through the they're at anthem putting to if than DTC, look yet. I haven't we X%. even Like, our industry think you XX% relation peers, XX% sung national in less

optionality for front enhancement for over and us that's us, all years. is the us the coming opportunity in of So great a margin

Operator

next comes CLSA. question Justin of The Barratt from

Justin Barratt

Hi, Matt. Hi, Oliver.

comments your Just unit great last made just noticing was Australia. of you've your around you on broadly the U.K. over months, you've most on international wondering could and of XX XX significant to please? growth some sort forward, comment you success sort But see if I had where shipments going and opportunities international

Matthew Wilson

Nice Yes. with be to you.

I think twofold. probably

and way. to a and stable expect in large, decades continue we market. success It's it vibrant resilient Continued for It's Australia. that been

share So, market. continuing in to that take

Dragon the for fantastic in a Chairman solid there, to terms I couple was that PAGCOR multi-quarter, Philippines. years. operator the see over opportunity I way. with has looks on GGR year. Train the there, life early just think coming lived I big of opportunity is September that's see last back exciting back footing.You opportunity on back for life, like we're a a and next of But products, in and the The down mandate I of Australia. the there us multi-year exciting market in Macau think of other in regulators, in side there then cycle the years Asia, very formal the to really churn what grow so for I and to with very a in X And us think in

that of in so investing slot the comes leader back in new in a And and Asia. off are products, IRs we market

for Asia think but I exciting is the So specifically us, a Philippines. opportunity very

yes, looking most forward of years. to the So, over that coming opportunity making the

Operator

comes from Canaccord Franklin Allan The next Genuity. of question

Allan Franklin

quick how one feel does like business, with this buyback Yes, going capital in the forward, just the are around please, will sort course allocation about your over situation time. current plans you thinking of trickle program? the the down But but the a it of of and at answered, acquisition been post in questions leverage my please, SciPlay the just current have just looking few one fair

Matthew Wilson

thank Yes, you the for question.

with previously strategy management largely Our shared. what stays we've capital consistent

We to they our benefit us really continue well to accretive the balance strong positioning value take see on arise. sheet, opportunities as of

leverage, we that's able QX cash-generative are targeted but within X.X and that turn around X.Xx transaction the year was of businesses. completion increase, and back levered, and at the the SciPlay question transaction.We comfortably of capitalize range X.Xx, were Specifically in the our to our on about SciPlay your believed a and we following X.Xx highly ended delever we to

that targeted has our with remains to the continue completed and be the our range, SciPlay program. we within well opportunistic been repurchase will leverage share transaction Now

we've buy million we're see And opportunity this In about shares. of as active a term, significant were in purchased to just full XXXX, a we our in investments looking which on structured implementing.So funds. ahead, worth value now to created in point disciplined We of million execute program, for throughout continue currently and view, we further spent shares.So, long R&D priorities $XX whether uses creation capital a we QX, CapEx year fact, more 'XX continue back us. very of allocation and from to $XXX other that's a manner, we'll or

are that. perspective. just a we in place where from great to But sheet continue given a we'll So evaluate we're balance

Oliver Chow

Yes. Maybe that. the cross-platform now want very stay what heavy of complexity games did is about we the just being global leading focused and additional there. We the true organization up one the with the have strategic to review a a And a build portfolio. in clear to mission lot We very lifting divestitures company. clean to through

all X the it that's making from Like would buying have digits.So, is where efficient of I think our you we is staying that for bar stock. strategy I said we a also allocation, has management on been very back growing related earlier, be focused with capital being our really validated. double but business focused cost, anything leverage on can sure us what around very said a M&A high and team and keeping expect

Operator

from And Deutsche Carlo our Bank of comes question Santarelli final

Carlo Santarelli

may. a if Just I couple,

One comp the you Oliver, quick. fees of of them right the next for going $X to guys number to is year? is million need be within really kind that termination iGaming,

Oliver Chow

yes. correct, That's

Carlo Santarelli

base And little it everything start just and of and Okay. constituents guys this then on, what but moving kind were of of more to -- the and the be a of this and all basis, growth equal year if might bit calculate premium you that in On as provide if a of slot your as as would per the win premium take kind between you installed you terms complicated, else guys the in a kind of that domestic about an day additions, before that obviously? things think scenario of will and GGR whatnot. you kind of of percentage level base

Matthew Wilson

complex a question. But a reaction guess is we my premium I that markets have towards away shift from pretty our installed base seen initial public category. Yes, to is, the that

in there obviously higher RPDs continue, do ads 'XX public. be because relation through will the that our units.So So in of than to premium of in are that That's the a way category that is RPDs about for kind the incremental kind terms premium the terms premium to to base be tailwind time. come to to of the the there of of base We installed think kind of in the into over RPDs gaming construct ops. expect installed

and our perspective we installed to say from mix there's given upside grow an the base some shift, over expect So, I'd time. RPD here then

Carlo Santarelli

then and quantify investments the you and And just helpful. some R&D side try Could and and whatnot. on of that's just CapEx you lastly, Oliver, talked perhaps, like about obviously of Okay, the investments, of kind investments? level magnitude social these

Oliver Chow

move is that investment, our forward. to component organic Yes, we a R&D of growth as call thank listen, and sort know we CapEx No, you. Yes. this critical

between, over R&D and So, the say, and of over level gross we XX% scale just core time. to would about obviously, a And level.So total the do a to and see further revenues R&D that's as CapEx back level. time, our combined at continue the CapEx sustainable a that ammunition X% into reinvest target our to level. And us at drive at that's ultimately, gross I growth XX% will give

continue is for we highest of So, area absolutely organically of highest the this invest an we'll us, us. -- the returns one that's to of believe focus as ROI and for

Carlo Santarelli

Okay.

tethering what you're the up, go to revenue XX% broadly in range, but that's So, numbers stays the that saying?

Matthew Wilson

forward. Yes, those we as that's move evaluate correct. to And continue we'll levels

Operator

turn questions no you, the closing call over to I'll further have We the queue, for Wilson back remarks. so any in Matt

Matthew Wilson

experience. the I to like and content customer us exciting with opportunities new acknowledge great team confidence for your Wonder Thank continue we on about excited to commitment execute employees delivering being for whose operator. past the latest dedication the and an provide our for support. day, closing, to do In would & global our you, We're a games, Thank you dynamic with environment. exceptional this every Light XXXX future.Our industry-leading the strategy ahead made us and continues you creating technologies in utilizing and today, for year as thank inspiring in work success

Operator

This Thank call. you concludes today's joining. for

your disconnect lines. You now may

Light & Wonder (LNW) 27 Feb 242023 Q4 Earnings call transcript