Light & Wonder, Inc. (LNW)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered 4% revenue growth to $797M, consolidated AEBITDA of $315M (40% margin), and diluted EPS of $1.20; sequentially, revenue declined vs Q3 on lower Game Sales timing, but EPS and margins improved YoY with continued strength across Gaming, SciPlay, and iGaming .
• Management signaled Q1 2025 consolidated AEBITDA growth in the low double-digits YoY, and reaffirmed pursuit of the FY2025 $1.4B consolidated AEBITDA target; ASX listing enhancements under review (dual primary or sole listing) .
• Strategic actions were notable: $243M buybacks in Q4 (2024 total $462M), amended revolver to $1.0B, settled a legacy antitrust matter for $72.5M, and agreed to acquire Grover Gaming’s charitable gaming business for $850M to expand recurring revenue and cross‑platform content distribution .
• Segment highlights: Gaming revenue +4% YoY to $515M with AEBITDA margin up 100 bps to 50%; iGaming revenue +11% to $78M; SciPlay flat revenue at $204M but AEBITDA +7% with DTC at 13% of revenue and stronger payer monetization .
• Near-term stock narrative catalysts: progress on Grover acquisition/recurring revenue, Q1 2025 AEBITDA growth setup, ASX listing strategy, live casino exit (resource reallocation), and continued installed base expansion and franchise momentum despite Dragon Train impacts .

What Went Well and What Went Wrong

• What Went Well

  • Gaming AEBITDA margin expanded to 50% (+100 bps YoY) on systems (+24%) and table products (+10%) growth and healthy gaming ops performance; North American installed base rose 9% YoY to 34,004 units .
  • SciPlay improved profitability (AEBITDA +7% YoY to $74M), with DTC rising to $27M (13% of revenue) and monetization metrics at record levels (ARPDAU $1.06, AMRPPU $117.15, payer conversion 10.9%) .
  • Management quote: “We ended a strong 2024 with continued double-digit revenue and earnings growth… the Grover Gaming acquisition enhances our cross-platform strategy” — Matt Wilson (CEO) .

• What Went Wrong

  • Sequential softness vs Q3 in Game Sales (Q4 Gaming revenue $515M vs Q3 $537M) reflecting timing, while gaming ops RPD faced Q4 impact from Dragon Train injunction (management expects normalization in 2025) .
  • iGaming AEBITDA margin dipped YoY (32% vs 33%) and Live Casino is being discontinued/divested due to pricing dynamics and ROI prioritization, implying reduced addressable market in that subcategory .
  • Free cash flow was $74M (slightly above $70M YoY) but offset by higher capex ($70M) and working capital uses tied to large orders; ongoing tariff risks flagged as single-digit million headwind in supply chain Q&A .

Financial Results

Consolidated sequential comparison (oldest → newest)

YoY comparison

Segment breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The Gaming machine sales share gains in North America and Australia this year are a testament to our R&D investment, commercial strategy and robust product roadmap… [Grover] enhances our cross-platform strategy and presence in regulated land-based markets” — Matt Wilson, CEO .
• “We expect the acquisition of Grover Gaming’s charitable business will contribute to our expansive recurring revenue base… we continue to see tremendous value in our shares and executed $462M in share repurchases in 2024” — Oliver Chow, CFO .
• “We expect first quarter 2025 year-over-year Consolidated AEBITDA growth to be in the low double-digits” — Company business update .
• “We’ve made the decision to discontinue and divest our live casino business… focusing resources on higher-ROI initiatives” — Matt Wilson .
• “Our liquidity profile was enhanced with the recent expansion of the revolver from $750M to $1B” — Oliver Chow .

Q&A Highlights

• Gaming ops trajectory: Management expects the Q4 RPD impact to reverse in Q1 and throughout 2025, with strong cabinet and franchise lineup supporting sequential momentum .
• Margin drivers: Gaming margins benefited from manufacturing/optimization; iGaming margins to get modest uplift from Live Casino exit; SciPlay DTC tailwind offsets UA spend .
• iGaming pipeline & legalization: Accelerating cadence of omnichannel releases led by unified content leadership; no U.S. legalization assumed for 2025; pipeline strong across franchises .
• Supply chain/tariffs: Diversified sourcing; single-digit million tariff headwind expected; margin enhancement provides mitigation optionality .
• Brazil: Early traction with tailored content; marketing jackpots deployed with operators; expanding technology overlays for engagement .

Estimates Context

• Wall Street consensus estimates via S&P Global for Q4 2024 EPS, revenue, and EBITDA were unavailable due to access limits; as a result, beat/miss versus Street cannot be assessed in this recap. If provided, we would anchor comparisons to S&P Global consensus means and counts of estimates.
• Company did note Q4 consolidated AEBITDA came in above the low single-digit YoY growth previewed last quarter, implying internal guidance outperformance even as Game Sales timing weighed sequentially .

Key Takeaways for Investors

• Gaming margin resilience and installed base expansion continue to underpin earnings quality; YoY margins up and systems/table products grew strongly in Q4 despite Dragon Train conversion headwinds .
• SciPlay’s DTC scaling and monetization metrics are structural positives; expect continued ARPDAU/AMRPPU strength with prudent UA spend, supporting margin tailwinds .
• Strategic portfolio focus (Live Casino exit) and Grover acquisition should increase recurring revenue exposure and cross‑platform leverage; near-term accretion expected post close, subject to approvals .
• Liquidity and capital deployment remain supportive: revolver expanded to $1.0B; Q4 buybacks $243M ($462M in 2024) indicate confidence in intrinsic value; leverage at 3.0x within target range .
• Near-term setup: management guides Q1 2025 AEBITDA growth to low double-digits YoY; watch sequential recovery in gaming ops RPD, Game Sales cadence, and content launches (e.g., Huff N’ Puff omnichannel) .
• Potential catalysts: ASX listing strategy decision, Grover closing and integration updates, Investor Day (May 20) disclosures on growth initiatives, and continued cabinet/franchise momentum .
• Risk checks: tariff/supply chain headwinds, pricing dynamics in certain iGaming verticals, and litigation/settlement cash uses; management highlights mitigation via margin enhancement and portfolio focus .

Additional Relevant Press Releases (Q4 period)

• Grover Gaming charitable gaming acquisition: $850M upfront; expected to close Q2 2025; strategic adjacency with recurring revenue model .
• Settlement of automatic shuffler antitrust claims: $72.5M; company did not admit liability .
• Credit agreement amendment: revolver commitments increased to $1.0B, extended maturity and reduced margin up to 50 bps .

Notes and Sources

• Primary 8‑K (Item 2.02) and Exhibit 99.1 press release with full financials and segment/KPI details .
• Q4 2024 earnings call transcript (prepared remarks and Q&A) –.
• Prior quarters’ press releases for trend analysis (Q3 2024, Q2 2024) – –.
• Strategic press release: Grover Gaming acquisition –.

S&P Global consensus was unavailable due to access limitations; therefore, estimate comparisons are not included.