Light & Wonder, Inc. Reports Second Quarter 2023 Results

Delivered Consolidated Revenue Growth of 20% Year-Over-Year with Double Digit Growth Across all Businesses

Nine Consecutive Quarters of Consolidated Revenue Growth

Healthy Balance Sheet Position, Strong Cashflow Generation and Continued Deleveraging Profile

Commenced Trading on Australian Securities Exchange

LAS VEGAS — August 8, 2023 — Light & Wonder, Inc. (NASDAQ and ASX: LNW) (“Light & Wonder,” “L&W,” or the “Company”) today reported results for the second quarter ended June 30, 2023.

We continued with strong momentum and delivered a ninth consecutive quarter of consolidated revenue growth year-over-year. Consolidated revenue in the quarter grew 20%, resulting in strong margins and cash flows as we continued our advancement toward our long-term financial targets. The growth was driven by double-digit growth across all of our businesses, including another quarter of record revenues for SciPlay and iGaming:

• Gaming revenue increased 21% compared to the prior year period to $471 million, primarily due to continued momentum in Gaming machine sales, which increased 41% driven by increases in North American and Australian machine sales, coupled with strong performance in North American Gaming operations, Gaming systems and Table products.
• SciPlay achieved record revenue of $190 million, a 19% increase compared to the prior year period, driven by the core social casino business, which once again delivered strong payer metrics and outpaced the market and gained share.
• iGaming revenue reached another record quarterly revenue of $70 million, a 17% increase from the prior year period, primarily driven by continued growth in the U.S. market.

Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “Our reported numbers continue to validate the investments that we’ve made in our business and demonstrate the significant progress we are making towards our long-term targets. Year to date, we delivered double-digit top and bottom line growth across all three of our businesses, generated strong cash flows and reduced leverage, resulting in an exceptional second quarter. I am also pleased to share that Light & Wonder is expanding its global presence, with a successful ASX listing during the quarter that is gaining momentum with the investment community. We will continue to execute on our core strategy and product roadmap, and look forward to sharing more with you at Australasian Gaming Expo in August and Global Gaming Expo in October.”

Connie James, Chief Financial Officer of Light & Wonder, added, “I am proud to have been part of such a diverse and capable team, and of our many accomplishments during my time here as my tenure comes to an end at Light & Wonder. We accomplished a number of meaningful milestones in transforming the Company and are now well-positioned with a healthy balance sheet and a strategic capital allocation plan. The continued growth we saw in the second quarter reflects the focused execution that is in our DNA. With a wealth of talent, sound financials, and an outstanding portfolio of assets, Light & Wonder continues to be in good hands moving forward as the leading cross-platform global games company.”

LEVERAGE, CAPITAL RETURN, AND STRATEGY UPDATE

• Principal face value of debt outstanding⁽¹⁾ of $3.9 billion, translating to net debt leverage ratio⁽²⁾ of 9x, within our targeted net debt leverage ratio⁽²⁾ range of 2.5x to 3.5x, as of June 30, 2023, a decrease of 0.4x from December 31, 2022, and the lowest level in the Company’s recent history.
• Secondary listing on the Australian Securities Exchange (ASX) — the Company’s common stock is listed as CHESS Depositary Interests (CDIs) on the ASX and commenced active trading on May 22, 2023 (AEST) under the ticker symbol “LNW.” The Company believes this secondary listing will create substantial benefits for L&W and its shareholders, including enhancing the Company’s profile in Australia, one of the leading markets for L&W’s Gaming business, and providing the Company access to new long-term Australian institutional investors that complement our strong existing base of shareholders.
• Agreement to acquire the remaining 17% equity interest in SciPlay — On August 8, 2023, the Company entered into a definitive agreement to acquire the remaining equity interest in SciPlay not already owned by the Company (approximately 17%) pursuant to a merger in which SciPlay’s shareholders will receive $22.95 for each share of SciPlay Class A common stock they own (subject to certain exceptions set forth in the Merger Agreement, dated as of August 8, 2023, by and among Light & Wonder, Bern Merger Sub, Inc. and SciPlay (the “Merger Agreement”)) in an all-cash transaction (valued at approximately $500 million subject to the total count of outstanding SciPlay Class A shares at closing) (the “SciPlay Acquisition”). The Company believes that this transaction will enable seamless collaboration with SciPlay that will add further momentum to the Company’s already robust cross-platform strategy, provide flexibility for use of SciPlay cash flows for investments across the enterprise, and facilitate long-term margin enhancement opportunities via synergies, all of which are expected to increase shareholder value.

(1) Principal face value of debt outstanding represents outstanding principal value of debt balances that conforms to the presentation found in Note 11 to the Condensed Consolidated Financial Statements in our June 30, 2023 Form 10-Q.

(2) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

SUMMARY RESULTS

Unless otherwise noted, amounts, percentages and discussion included below reflect the results of operations and financial condition of the Company’s continuing operations, which includes its Gaming, SciPlay and iGaming businesses. We have reflected our former Lottery business (disposed during the second quarter of 2022) and Sports Betting business (disposed during the third quarter of 2022) (collectively referred to as the “Divestitures”) as discontinued operations.