Light & Wonder hails strategic investments as revenue hits record $2.90bn in 2023

Revenue was higher across all segments at Light & Wonder in 2023: Gaming, SciPlay and iGaming. Incidentally, the group has now achieved five consecutive quarters of double-digit revenue growth in all three businesses.

This growth was supported by strategic investments throughout the year. The stand-out development was acquiring the remaining shares in SciPlay, the social gaming division it span off in 2019. The 17% holding was acquired for more than $420.0m.

SciPlay is now a fully integrated part of the Light & Wonder portfolio. According to president and CEO Matthew Wilson, SciPlay is executing “beyond expectations” in what he described as a “breakout” year.

“I’d like to share that the integration has gone well,” Wilson said. “We are executing on our cross-platform strategy through a more harmonised development process across all businesses.

“I think SciPlay is becoming quite metronomic about the way they just deliver outstanding results after outstanding results. Clearly, it is the fastest-growing social casino company in the industry and taking a wild amount of share. I think it all comes back to we got a best-in-class team with a really focused strategy.”

No looking back after lottery sale

New investments follow the decision to offload its lottery business in 2022. Light & Wonder completed the sale to private equity company Brookfield Business Partners in a deal worth $5.80bn. 

Aside from this, the group also sold its OpenBet sports betting platform to Endeavor. With these sales, Light & Wonder has been able to switch its focus to its now-core business areas.

Add in a successful secondary listing on the Australian Securities Exchange in May 2023 and Wilson said the future looks bright for Light & Wonder.

“Throughout 2023, we made strategic investments in the aspects of our business that we expect to drive long-term sustainable value, something we were not able to do before the transformation,” Wilson said.

“Our improved financial position and disciplined capital allocation strategy support our ability to continue to invest in the future of Light & Wonder, with a commitment to accelerating R&D investments and enhancing our product offerings.”

Double-digit growth in all areas for Light & Wonder

Taking a closer look at the full year, services revenue at Light & Wonder jumped 10.9% to $1.99bn. Products revenue also increased by 27.1% to $991m.

In terms of segmental performance, gaming led the way with $1.85bn in revenue, a rise of 15.6%. This was driven by an increase in gaming machine sales, while gaming operations revenue was also higher on the back of an enlarged North American installed base.

The newly acquired SciPlay business posted $777m in revenue, up 15.8% year-on-year. This increase was put down to growth within the core social casino business, helped by higher player engagement.

Meanwhile, Light & Wonder also reported a 14.6% increase in igaming revenue to $275m for 2023. Growth here was helped by continued growth momentum in both the US and international markets.

Lottery sale skews net profit year-on-year comparison

In terms of costs, operating expenses increased 6.5% to $2.38bn. The main outgoing was selling, general and administrative costs, with the $808m spent here up 12.7%.

Other finance-related expenses, primarily interest costs, amounted to $313m. As such, this resulted in a $205m pre-tax profit, compared to the $163m loss posted at the same point in 2022.

Light & Wonder paid $25m in tax, leaving a $180m net profit from continuing operations, in contrast to the previous year’s $176m loss.

However, when it comes to bottom line, this is where the figures become skewed. In 2022, Light & Wonder noted $3.87bn in net income from discontinued operations, including the lottery business.

Accounting for this, as well as $17m in discounted net income from non-controlling interest, impacted bottom line. Comprehensive net profit in 2023 reached $163m whereas, in 2022, the inclusion of discontinued operations income meant net profit was $3.68bn. 

As for adjusted EBITDA, this amounted to $1.12bn, an increase of 22.5% year-on-year.

Ending 2023 on a high

Looking at the final quarter of 2023, group revenue in Q4 amounted to $770m, up 12.9%. This includes $515m in services revenue, a rise of 10.5%, and $225m in products revenue, up 18.1%.

Segment-wise, gaming led the way with $496m in revenue, an increase of 13.2%. SciPlay revenue also increased 12.1% to $204m and igaming revenue 12.9% to $70m.

Total operating costs climbed 5.5% to $615m, with selling, general and administrative the main expense at $209m. Light & Wonder also noted $90m in net other expenses for Q4.

This left a pre-tax profit of $65m, up 150.0% year-on-year. The group paid $2m in tax, resulting in a net profit of $67m, compared to $21m in Q4 of 2022.

As the asset sales were largely complete by Q4 of 2022, discontinued operations only had minimal impact on the comparative period. Discontinued operations net profit in the previous year stood at $18m. 

However, even after taking this and non-controlling interest income into account, bottom line net profit was still higher. For Q4 2023, net profit reached $66m, an increase of 120.0% from $66m in 2022.

In addition, adjusted EBITDA for the quarter climbed 14.0% to $302m.

“Banner year” for Light & Wonder

“2023 was a banner year for Light & Wonder,” Wilson said. “Our businesses delivered double-digit growth across the board throughout the year, enabled by strategic investments and strong execution. 

“We consistently leverage a differentiated product strategy and plan to capitalise on the significant growth opportunities ahead of us. 

“I am thrilled with the momentum we continue to see in the business and, with our winning mentality, experience and talent in place, we are well-positioned to continue our growth trajectory. I want to congratulate our team on a successful year and know the best is yet to come.”