Widespread segment growth pushes revenue up 12.8% at Light & Wonder in Q1

Revenue during the three months to 31 March was higher across the Gaming, SciPlay and iGaming businesses. As a result, Light & Wonder also reported higher group net profit for Q1.

The first quarter also represented the 12th consecutive quarter of year-on-year revenue growth for Light & Wonder. In addition, Q1 was the sixth straight quarter of double-digit revenue growth across all lines of business.

Gaming again generated the most revenue for the group at $476m, up 13.6% from last year. SciPlay revenue was up 10.8% at $206m, while the highest percentage growth was noted in the iGaming business, with revenue climbing 13.9% to $74m.

“With our unmatched market position and cross-platform capabilities, Light & Wonder has created a compelling value proposition,” president and CEO Matt Wilson said. “Our results clearly demonstrate that we are delivering the iconic content the players want with the ability to choose where and when they want to play their favourite Light & Wonder game.

“The performance in the quarter validates our execution plan. We expect growth to be further enhanced by key hardware and content launches in both our land-based and digital markets throughout the year.”

Could Light & Wonder consider M&A to drive further growth?

Light & Wonder in Q1 also made a strategic investment in no-code automation platform Flows. This, the group says, will help accelerate growth and scale up operations in markets worldwide. 

Flows uses automation software to support businesses with development and integrations. Light & Wonder said its investment will accelerate Flows’ own development and allow for faster product roll-out in new markets.

On the back of this, the question for Light & Wonder is that could it consider further M&A activity to grow its business? Wilson says while the group continues to monitor the market for opportunities, nothing is immediately in the offing. 

He adds that the group is committed to its focused content strategy, whereas the existing Scientific Games operation was a diverse portfolio of assets across lottery and sports and content and land-based and digital.

“We want to be the leading cross-platform global games company,” Wilson said. “We’ll look and evaluate every M&A target that supports that mission and vision. But we’re not in a hurry to go and put a huge amount of complexity back into the portfolio.

“We’ve done a lot of work to clean up. It’s kind of the operating businesses and get this squarely focused at our vision. So, we’ll look at assets that help us project that further on, but are not in a huge hurry to do a flashy piece of M&A.”

Breaking down Q1 success

Going into further detail on Q1, Light & Wonder says that $517m of all revenue came from services activity, up 8.4%. Product revenue was also 23.8% higher at $239.

Breaking down performance by segment, in Gaming, the group said it continued to deliver both strong financial and key performance metrics. This, it says, is testament to executing its robust product roadmap and commercial strategy.

A 13.6% rise in Gaming revenue, Light & Wonder said, was driven by a 30.0% rise in machine sales and 9.0% jump in systems. In addition, Gaming operations revenue increased 3.0% on the back of growth in its North American installed base and average daily revenue per unit.

Meanwhile, revenue within the SciPlay social casino business hit a new quarterly high. This, the group says, was driven by record player engagement in the core social casino business.

However, it did note that revenue growth was partially offset by higher targeted and planned marketing spend. SciPlay maintained its number of payers at around 600,000 and posted its highest-ever average monthly revenue per paying user of $113.93.

Finally, the iGaming segment not only posted the highest percentage growth in Q1 but also saw revenue reach a new quarterly high. Light & Wonder notes continued momentum in the US and international markets, helped by strong first-party content launches.

In addition, the group revealed that wagers processed through its iGaming platform were up to $22.40bn in Q1.

Net profit rises to $82m at Light & Wonder

Looking at costs, expenses were higher across several operating areas. This led to a 4.1% rise in total operating spend to $591m in Q1, with selling, general and administrative the main outgoing at $218m.

Light & Wonder noted $65m in net other costs, leaving a pre-tax profit of $100m, up 284.6% year-on-year. The group paid $18m in tax, meaning it ended Q1 with a net profit of $82m, a rise of 272.7%.

In addition, adjusted EBITDA climbed 12.9% to $281m, driven by strong revenue growth and sustained margin strength across all segments.

“Importantly, we will support our creative talent and strategic initiatives with disciplined R&D investments that drive long-term sustainable value,” Wilson said. “Above all, we have a focus on operational excellence as we continue to extend our market reach.

“I’m very excited about the momentum we are creating. I look forward to the opportunities ahead for Light & Wonder through 2024. The best is yet to come.”