Significant Growth Reported in Q4 by Light & Wonder
Light & Wonder Roars Ahead in Q4 2024, Eyeing Future Growth
In a blockbuster financial report, Light & Wonder revealed a bang-up Q4 2024, with CEO Matt Wilson boasting double-digit growth in revenues and earnings for the year. "We've wrapped up a sensationally strong 2024, and our tantalizing Q4 numbers confirm it," Wilson declared.
According to Wilson, the company's impressive gains in gaming-machine sales in North America and Australia have been a testament to Light & Wonder's smart R&D, strategic moves, and well-thought-out product roadmap. The exec highlighted the company's recent purchase of Grover Gaming as a major catalyst, synergies and new market acquisitions be damned!
Chief Financier Oliver Chow added his two cents, estimating that the pickup of Grover Gaming's charitable business would significantly contribute to Light & Wonder's hefty recurring-revenue base. The purchase, Chow pointed out, would complement the company's high-margin and cash-generative business, turbocharging their growth profile and multi-platform strategy.
After gobbling up a cool $462 million of LNW shares in 2024, $243 million in the final quarter alone, Light & Wonder's debt load clocked in at a respectable $3.9 billion, or about three times cash flow. The company reckoned this put it in the sweet spot, sandwiched snugly between their desired range of 2.5-to-3.5 times cash flow.
But fear not, the split with TCS John Huxley over automatic shufflers is done and dusted. The two parties will see peace again after Light & Wonder pony up a tasty $72.5 million to bury the hatchet, again, without any toes being stepped on regarding then-Scientific Games liability.
Feeling confident, Light & Wonder executives forecast a first-quarter earnings growth of low-double-digits in 2025, attributing this to the timing games of game sales and high-yield investment opportunities expected to fuel both organic growth and a fabulous future.
Q4 revenue soared to $797 million, compared to $770 million in the final quarter of the previous year. Profits also burgeoned, climbing from $67 million to $107 million, thanks in no small part to a $28 million asset sale.
Capital expenditures upped the stakes from $60 million to $70 million, but the cash cushion took a hit, dropping from $425 million to $196 million, while debt remained steady.
SciPlay social-casino revenue flattened at $204 million, but iGaming winnings marvelously surged 11 percent to $78 million. Traditional gaming revenue, featuring systems sales, swelled a modest 4 percent, reaching $515 million.
Light & Wonder boasted a staggering 34,004 slot machine population in North America alone, with each day's average winnings totalling a mouth-watering $47.25. Bouncing back, the company's installed base enjoyed its 18th consecutive quarter of expansion in late 2024.
To fully dip its toes in the Australian Stock Exchange (ASX), Light & Wonder has tapped Goldman Sachs as a strategic ally. With the ASX's historical support of global gaming firms, a diverse market of smart investors, and plenty of swashbuckling industry participants, it's a no-brainer for Light & Wonder to set its sights on a primary or even solo listing.
In the words of Livin' Chair Jamie Odell, "The ASX—much like a fine vino—boasts a rich history and is as mighty as the mighty herself. We're stoked to engage with the market, our homies, and future shareholders to elevate the supremeness of our ASX listing."
As for Light & Wonder's long-term goals, the company has set its sights on a consolidated adjusted EBITDA of $2 billion and more than doubling its adjusted net profit after tax per share to over $10.55 by 2028. With its strategy focusing on core gaming, digital, and iGaming, Light & Wonder aims for a nearly 400 basis point increase in premium market share in North America and a similar hike in global game sales by 2028. The goal is an omnichannel content kingdom!
Light & Wonder plans to invest heavily in technology to further boost its business, with the goal of increasing its consolidated adjusted EBITDA to $2 billion by 2028. In addition, the company aims for a nearly 400 basis point increase in premium market share in North America and a similar hike in global game sales through strategic moves and product innovation.
The recent purchase of Grover Gaming is expected to contribute significantly to Light & Wonder's growth profile, complementing the company's high-margin and cash-generative business, thereby turbocharging their future investment opportunities and multi-platform strategy.
