Light & Wonder, Inc. Reports Third Quarter 2024 Results

Continued Double-Digit Consolidated Revenue Growth, an Increase of 12% Year-Over-Year

Maintained Healthy Balance Sheet and Committed to $1.4 Billion FY 2025 Consolidated AEBITDA Target⁽¹⁾

Demonstrated Diversity and Strength of Game Portfolio across Our Business at G2E and AGE

Added to the S&P/ASX 100 Index on September 25, 2024

 LAS VEGAS — November 12, 2024 — 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, 2024.

We maintained strong momentum in the third quarter and delivered our 9^th consecutive quarter of double-digit consolidated revenue growth year-over-year, sustainable cash flow generation and returned $44 million to shareholders through share repurchases, while continuing our advancement toward our long-term financial targets. Consolidated revenue increased 12%, driven by strong performance across all our businesses, maintaining healthy earnings growth:

• Gaming revenue increased to $537 million, up 15% compared to the prior year period, primarily driven by global Gaming machine sales growth, which increased 38%, coupled with strong performance in North American Gaming operations.
• SciPlay revenue grew to $206 million, a 5% increase from the prior year period, driven by the social casino business, which continues to outpace the market and gain share on strong payer metrics, while our direct-to-consumer platform remained strong, representing 12% of total revenue.
• iGaming revenue grew to $74 million, a 6% increase from the prior year period, primarily reflecting continued momentum in North America, while the prior year benefited from $3 million in license termination fees, which impacted revenue growth by 4%.

Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “Our results once again reflect the relentless collective efforts of the talent across our organization underpinned by our robust and scalable R&D platform. At G2E and AGE, we showcased a wide array of products that demonstrated the diversity and strength of our portfolio and franchises. We will continue to execute on our cross-platform strategy focused on innovative content and products as a leading global end-to-end gaming technology solutions provider. Our team is committed and engaged as we stay on course through the execution chapter of our journey to reach our target.”

Oliver Chow, Chief Financial Officer of Light & Wonder, added, “The highly cash generative nature of our business, combined with a healthy balance sheet and strategic capital allocation program, has proven to be a strong framework to create shareholder value. We plan to further accelerate this value creation flywheel through continued R&D and capex investments, as well as through financial means such as our share repurchase program. We stay highly convicted to our strategy and roadmap as we reaffirm our 2025 $1.4 billion Consolidated AEBITDA target⁽¹⁾ and look to remain a compounder of growth for years to come.”

LEVERAGE, CAPITAL RETURN AND LEGAL UPDATE

• Principal face value of debt outstanding⁽¹⁾ was $3.9 billion, translating to a net debt leverage ratio⁽²⁾ of 9x as of September 30, 2024, a 0.2x decrease from December 31, 2023, and remaining within our targeted net debt leverage ratio⁽²⁾ range of 2.5x to 3.5x.
• Returned $44 million of capital to shareholders through the repurchase of approximately 4 million shares of L&W common stock during the third quarter of 2024.
• Dragon Train litigation — On September 23, 2024, L&W received an order from the U.S. District Court for the District of Nevada granting Aristocrat a preliminary injunction relating to future sales and distribution of our DRAGON TRAIN^TM On October 3, 2024, the Company released a statement on the litigation and highlighted a number of key initiatives to mitigate the immediate impact and any continuing business disruption from this order, including but not limited to, leveraging our diversified portfolio of successful game franchises, as well as the development of new iterations of the Dragon Train franchise consistent with the terms of the Court’s ruling. Our North American Gaming operations installed base consisted of approximately 2,200 units of Dragon Train-themed games, of which, to date, approximately 95% have been successfully replaced and / or converted with another game from our portfolio of game franchises. Our pre-ruling estimate of 2025 Consolidated AEBITDA⁽³⁾ for Dragon Train was less than 5%⁽⁴⁾ of the $1.4 billion target. We expect growth in Consolidated AEBITDA⁽³⁾ to be above 10% for the full year 2024. We will continue to execute on our long-term sustainable growth strategy progressing towards our 2025 financial targets.

(1) Principal face value of debt outstanding represents outstanding principal value of debt balances that conform to the presentation found in Note 10 to the Condensed Consolidated Financial Statements in our September 30, 2024 Form 10-Q.

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

(3) Consolidated AEBITDA Target is a forward-looking non-GAAP financial measure presented on a supplemental basis and does not reflect Company guidance. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

(4) This estimate was based on revenue key performance indicators (“KPIs”) and historical contribution margins.