Matthew Ryan

Matthew Ryan asked about Light & Wonder's structural moat in the context of artificial intelligence (AI) and how it mitigates competitive risks, referencing the company's slide 5.

Answer

Matt Wilson, President and CEO, explained that AI is a significant growth enabler, viewed through both defensive and offensive lenses. He highlighted strong structural moats including established market positions, extensive regulatory licenses, scale, substantial R&D and CapEx investment, valuable IP/brands like Huffn' Puff, and unique proprietary datasets not accessible by LLMs. Victor Blanco, CTO, detailed the AI transformation program, including the AI-led Carbon game development kit, which has improved game portability and accelerated development. He emphasized that player experience and creative breakthroughs remain human-led processes.

Matthew Ryan asked about Light & Wonder's structural moats and competitive risks in the context of artificial intelligence, specifically referencing the company's presentation on page five.

Answer

President and CEO Matt Wilson explained AI as a growth enabler, detailing Light & Wonder's defensive moats including strong market positions, regulatory scale, valuable IP, unique proprietary datasets, and the intersection of hardware and content. CTO Victor Blanco elaborated on the AI-led Carbon game development kit, highlighting its role in accelerating platform development and achieving 100% game portability, while also noting AI's limitations in replicating human creativity for player experience and novel game mechanics.

Matt Ryan of Barrenjoey inquired about the Grover acquisition, specifically asking about the source of the 600 additional units installed since February and the current pace and depth of the integration process.

Answer

President & CEO Matt Wilson described the integration as off to a 'fantastic start,' highlighting strong cultural alignment and financial performance ahead of expectations. He clarified that the 600 net unit additions represent organic growth in existing markets, driven by industry tailwinds. Wilson also noted significant progress on entering the Indiana market and confirmed that the first Light & Wonder content is already operating on the Grover platform.

Matthew Ryan of Barrenjoey asked for clarification on the U.S. gaming operations yield in Q1, seeking to understand the relative impacts from macroeconomic factors versus portfolio mix.

Answer

CEO Matt Wilson attributed the Q1 yield performance primarily to adverse weather in the Northeast affecting WAP products, rather than macro weakness. He stated this was a "onetime isolated event" and confirmed that promotional discounting from Q4 had been reversed, returning the business to a normalized base.

Matthew Ryan inquired about the outlook for the Gaming operations installed base in Q1, considering new game releases and cabinet conversions.

Answer

CEO Matt Wilson stated he expects the fee per day degradation seen in Q4, related to the Dragon Train impact, to reverse in Q1 and continue improving throughout the year. He highlighted a 'completely stacked' 2025 product lineup and strong brand extensions that will drive sequential momentum. CFO Oliver Chow added that scaling R&D will support sustained growth beyond 2025.