Light & Wonder, Inc. Reports Third Quarter 2023 Results

Ten Consecutive Quarters of Consolidated Revenue Growth Delivering Increase of 13% Year-Over-Year

Double-Digit Growth Across all Businesses Driving Strong Cash Flow Generation

Maintained Healthy Balance Sheet, Strong Financial Profile and Extended 2025 Debt Maturity to 2031

Returned $112 Million of Capital to Shareholders Through Share Repurchases During the Quarter

Added to the S&P/ASX 200 Index and Closed Merger with SciPlay During the Fourth Quarter of 2023

LAS VEGAS — November 9, 2023 — Light & Wonder, Inc. (NASDAQ and ASX: LNW) (“Light & Wonder,” “L&W,” “we,” or the “Company”) today reported results for the third quarter ended September 30, 2023.

We maintained strong momentum in the third quarter and delivered a tenth consecutive quarter of consolidated revenue growth and fifth consecutive quarter of double-digit growth year-over-year. Consolidated revenue in the quarter grew 13%, maintaining strong margins and cash flow generation as we continued advancing toward our long-term financial targets. The growth was driven by double-digit growth across all of our businesses, including a fifth consecutive quarter of record revenues for SciPlay, and iGaming revenue held at record level:

• Gaming revenue increased 11% compared to the prior year period to $465 million, primarily due to continued momentum in Gaming machine sales, which increased 23% driven by growth in North American and Australian
  machine sales, coupled with strong performance in North American Gaming operations and Table products.
• SciPlay achieved another quarter of record revenue of $196 million, a 15% increase compared to the prior year period, driven by the core social casino business, maintaining strong payer metrics and once again outpacing the market and gaining share.
• iGaming revenue held at record quarterly level of $70 million, a 21% increase from the prior year period, driven by growth both in the U.S. and international markets.

During the quarter, we returned $112 million of capital to shareholders through share repurchases, and we successfully refinanced $550 million of senior unsecured notes, extending their maturity from 2025 to 2031. On October 23, 2023, we closed the SciPlay merger transaction and acquired the remaining 17% equity interest in SciPlay not already owned by L&W, completing another critical strategic milestone.

Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “Our tremendous team at Light & Wonder continues to deliver exceptional results with double-digit growth across all three of our businesses for the fourth consecutive quarter. Additionally, we also reached two significant milestones, which included closing the SciPlay transaction and inclusion into the ASX 200 index in Australia. We had successful showings at both the Australasian and Global Gaming Expos with the strength of our product portfolio on full display. The positive feedback we received on our wide range of cabinets and games further validates our focused investment in R&D and vision for the future of the Company. We will continue to capitalize on this momentum, as evidenced by the talent acquisition efforts we’ve recently accomplished. Coming out of G2E, our conviction has never been higher that we will reach our full potential as we approach the end of 2023.”

Oliver Chow, Interim Chief Financial Officer of Light & Wonder, added, “This quarter demonstrated our commitment to growing the business and maintaining healthy margins. Our business segments’ AEBITDA are at their highest levels in 2023 as we continue to stay intensely focused on executing on our strategy while driving margin enhancement initiatives. Our commitment to operational efficiencies coupled with strong top line growth enabled us to generate significant cash flow. We have a strong financial profile and capital structure, which positions us well in our current growth stage, providing us with flexibility to invest as we advance toward our strategic and financial goals.”

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 2.8x, within our targeted net debt leverage ratio⁽²⁾ range of 2.5x to 3.5x, as of September 30, 2023, a decrease of 0.5x from December 31, 2022, and the lowest level in the Company’s recent history.
•  Extended 2025 debt maturity to 2031 — During the quarter, we issued $550 million of 7.500% senior unsecured notes due 2031 and redeemed all $550 million of our outstanding 8.625% senior unsecured notes due in 2025, resulting in an approximately $6 million reduction in annualized cash interest costs.
• Returned $112 million of capital to shareholders through the repurchase of approximately 1.5 million shares of L&W common stock during the quarter. Since the initiation of the program, we have returned $550 million of capital to shareholders through the repurchase of approximately 9.1 million shares of L&W common stock, representing 73% of total program authorization.
• Added to the S&P/ASX 200 Index as of October 18, 2023 — The Company’s common stock, which is listed as CHESS Depositary Interests (CDIs) on the ASX, was added to the S&P/ASX 200 Index, continuing to enhance the Company’s profile with Australian investors.
• Closed SciPlay merger transaction on October 23, 2023, acquiring the remaining approximately 17% equity interest not already owned by L&W for $496 million (excluding transaction and advisory fees), resulting in SciPlay becoming a wholly owned subsidiary of L&W (the “SciPlay Merger”). 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 long-term 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 September 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.