Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Light & Wonder Inc (LNW, Financial) reported a 12% increase in consolidated revenue year over year, marking the 14th consecutive quarter of revenue growth.
- The company successfully launched a new studio in Reno to support sustained growth aspirations beyond 2025.
- LNW's North American premium install base has grown for 17 consecutive quarters, maintaining approximately 50% of the total North American install base.
- The company achieved record global shipments of over 13,000 units and held the number one ship share in North America in the second quarter.
- LNW's social casino segment, SciPlay, delivered record monetization metrics with continued growth in key games like Quick Hit Slots and 88 Fortunes.
Negative Points
- Net income per share decreased to 71 cents from 81 cents in the prior year due to higher restructuring and legal costs.
- The company faced a preliminary injunction impacting approximately 2,200 Dragon Train units, leading to potential revenue per day impacts in North America.
- Legal expenses and corporate costs are expected to be impacted by ongoing legal developments.
- The gaming operations segment experienced a slight revenue impact due to the timing of revenue recognition, expected to be realized in the fourth quarter.
- The iGaming segment faced a headwind from termination fees in the prior year, impacting year-over-year growth comparisons.
Q & A Highlights
Q: Can you talk more about how the Dragon Train mitigation efforts are going for both the domestic and international markets?
A: Matt Wilson, President and CEO: We've been able to convert 95% of the North American units to new titles, losing less than 100 units. In Australia, we've shifted focus to new games like Shenlong Unleash, maintaining our number one ship share without commercializing Dragon Train. The diverse portfolio supports our growth despite the injunction.
Q: Could you provide an update on the timing of new introductions, particularly in the premium categories like Huff and Puff?
A: Matt Wilson, President and CEO: We showcased a diverse portfolio at G2E, including new versions of Huff and Puff. The Cosmic Upright cabinet will launch late Q4, building momentum into 2025. We're confident in maintaining growth with these new introductions.
Q: Can you provide insights on customer budgets and the sustainability of current levels in North America?
A: Matt Wilson, President and CEO: The macro environment supports a replacement market consistent with 2024 as we move into 2025. We're diversifying our business across geographies and product lines, which is reflected in our ship share improvements.
Q: Could you clarify the Q4 EBITDA guidance and the motivation behind the new NPATA guidance for FY25?
A: Oliver Chow, CFO: We're mitigating near-term impacts from the Dragon Train injunction, expecting modest growth in Q4. The NPATA guidance is a translation of our $1.4 billion EBITDA target, providing flexibility and aligning with investor expectations.
Q: How do you feel about the pipeline going into 2025, particularly regarding Dragon Train?
A: Matt Wilson, President and CEO: We're working on variations of Dragon Train and expect it to be a sustainable contributor. Our diverse portfolio and strong lineup of games position us well for 2025 and beyond.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
