Justin Barratt

Justin Barratt questioned the SciPlay top-line result, specifically the impact of Jackpot Party issues and customer retention, and the rapid DTC penetration (25% in Q4 vs. 30% 2028 target), asking about the ability to exceed the long-term DTC target.

Answer

Matt Wilson, President and CEO, acknowledged a tough year for Jackpot Party in 2025, which impacted SciPlay's top line due to its scale. He noted stronger engagement levels in early 2026, allowing for renewed UA investment and recalibration of the game's economy. He highlighted the fantastic job the team did in increasing DTC mix from 19% to 25% in Q4, pacing well ahead of the 30% target by 2028, suggesting potential upside to that guidance. He emphasized SciPlay as a portfolio with fast-growing games like Quick Hits and 88 Fortunes, alongside Jackpot Party in turnaround mode.

Justin Barratt questioned the SciPlay top-line results, specifically how they reflect past issues with Jackpot Party and the ability to regain customers, while also asking about the impressive ramp-up in Direct-to-Consumer (DTC) penetration and the potential to exceed the 2028 target.

Answer

President and CEO Matt Wilson acknowledged a challenging 2025 for Jackpot Party, which impacted SciPlay's top-line, but noted recent stabilization in engagement levels allowing for future UA investment. He highlighted strong growth from other games like Quick Hits and 88 Fortunes, and the significant increase in DTC mix from 19% to 25% in Q4, suggesting potential to exceed the 30% target by 2028.

Justin Barratt from CLSA Limited noted another relatively weak quarter for free cash flow and asked if there were any near-term catalysts that would lead to a material improvement in the company's cash flow conversion.

Answer

CFO Oliver Chow explained that the quarter's free cash flow was significantly impacted by a one-time $73 million legacy legal settlement payment. He stated that when normalized for this payment, free cash flow saw a considerable year-over-year increase to over $100 million, representing a 77% conversion rate from adjusted NPATA. Chow expressed confidence that the highly cash-generative nature of the base business, now augmented by Grover, will provide healthy, sustainable cash flow going forward.

Justin Barratt of CLSA followed up on guidance, asking if the path to the $1.4 billion EBITDA target would be driven by even contributions from revenue growth and margin expansion for the rest of the year.

Answer

CEO Matt Wilson declined to give specific mix guidance but did state to expect a "tick up in terms of the revenue growth" in the coming quarters. He then highlighted the pending Grover Gaming acquisition as a key factor, noting it's a fast-growing, recurring revenue business that will provide a tailwind, especially with the unexpected legalization of e-gaming in Indiana.

Justin Barratt inquired about the company's considerations regarding a potential dual primary or sole listing on the ASX and the timeline for a decision.

Answer

CEO Matt Wilson explained the exploration was prompted by investor inquiries, particularly as U.S. peers are being taken private. The goal is to find ways to accelerate the adoption of its ASX listing. He clarified that no decision has been made and it is an exploratory process to optimize shareholder value. A decision is expected after engaging with investors over the 'next few months.'

Justin Barrett asked about the importance of margin expansion in achieving the fiscal year 2025 target and questioned the risk of having to remove already sold Dragon Train units in Australia due to ongoing litigation.

Answer

President and CEO Matthew Wilson explained that margin stability and scaling are key to value creation, with gaming margins expected to remain steady and SciPlay margins benefiting from DTC growth. Regarding litigation, he stated that while the company doesn't comment on legal matters, the injunction is against Light & Wonder, not its customers, and they do not foresee an impact on customer-owned games.