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Light & Wonder reveals revenue growth in “pivotal” year

| By Robert Fletcher
Light & Wonder posted a year-on-year increase in revenue during its 2022 financial year, in what chief executive Matt Wilson described as a “pivotal” 12 months for the business.
Light & Wonder

The group sold its lottery business to private equity company Brookfield Business Partners in April in a deal worth $5.8bn, while it also offloaded its OpenBet sports betting platform to Endeavor and acquired the assets of loyalty and marketing software and technology provider House Advantage.

This means Light & Wonder is now operating across three core business segments: gaming, igaming and social gaming with SciPlay. 

Wilson, who took over as CEO and president on a full-time basis in October, having served as interim CEO since August after the departure of Barry Cottle, said the new-look business is now in a “strong position” to pursue growth opportunities in 2023 and beyond.

“2022 was a pivotal year for Light & Wonder,” Wilson said. “We delivered on an ambitious and transformative plan while driving operational success and double-digit growth in our business.

“We are excited about our future and see strong momentum continuing in the business in the year to come. Our industry leading talent, games and technology put us in a strong position to deliver on our product roadmap, capitalise on the enormous opportunities ahead and lead in the convergence of gaming.”

Fourth quarter

Analysing Light & Wonder’s performance and beginning with the fourth quarter, revenue in the three months to 31 December amounted to $682m (£569m/€641m), up 18% on the previous year, driven by double-digit growth across all business segments. This included $466m in services revenue and $216m from product sales.

Gaming was the primary source of revenue in Q4, with revenue in this area climbing 18% to $438m, helped by a 41% rise in gaming machine sales. Gaming operations revenue also benefited from year-over-year growth in the North American installed base and higher average daily revenue per unit.

SciPlay revenue also increased 18% to $182m, a new quarterly record for the business that was driven by the core social casino business as well as the Alictus acquisition.

Revenue from igaming climbed 15% to $62m in Q4, with an improved performance in the US partially offset by $4m in unfavourable impact of foreign-currency translation due to the strengthening US dollar, impacting revenue growth by seven percentage points. 

Turning to costs, operating expenses were 1.0% higher at $583m, but financial expenses fell 23.2% to $73m, meaning pre-tax profit from continuing operations was $26m, compared to a $92m loss in 2021.

Light & Wonder paid $5m in income tax and after accounting for a $18m net profit from discontinued operations, but removing $9m in profit from non-controlling interest, this left a net profit attributable to Light & Wonder of $30m, down 68.4% year-on-year. However, adjusted EBITDA was 23% higher at $265m.

Full year

Looking at the full year and revenue for the 12 months to 31 December was 17% higher at $2.51bn, with $1.80bn coming from services and $717m product sales.

Gaming revenue increased by 21% to $1.60bn, while revenue from SciPlay climbed 11% to $671m and igaming revenue was up 6% to $240m for the year.

Operating costs jumped 9.6% to $2.24bn while net finance expenses increased by 7.9% to $436m. This meant a pre-tax loss from continuing operations of $163m, although this was shorter than the $294m loss posted in 2021.

Light & Wonder paid $13m in tax, leaving a net loss from continuing operations of $176m, in contrast to a $24m profit at the end of the previous year.

However, the group also reported $3.70bn in net profit from discontinued operations, with this including a total pre-tax gain of $4.93bn from the sales of the lottery and sports betting businesses.

When accounting for this, minus a $22m profit from non-controlling interest, it resulted in a net profit attributable to Light & Wonder of $3.68bn, compared to $371m in the 2021 financial year. In addition, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year was 15% higher at $913m.

“We are proud of the tremendous and rapid progress we have made over the past 18 months,” Light & Wonder chief financial officer Connie James said. “We delivered quality earnings, setting the foundation for sustainable growth going forward as we continue to focus on delivering shareholder value.

“We also returned significant capital to our shareholders, totalling $413m since our share repurchase programme was announced a year ago. We now have a strong balance sheet and clear roadmap to advance with discipline on our balanced and opportunistic capital allocation strategy and elevate Light & Wonder’s value proposition.”

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