“We continue to see stability and resilience,” said Light & Wonder CEO Matt Wilson, applauding his company’s third-quarter earnings. He cited the showcasing of 80 games at Light & Wonder’s Global Gaming Expo booth and the opening of an R&D lab in Reno.
Wilson hailed 14 straight quarters of revenue growth and 17 consecutive increases in Light & Wonder’s North American installed base. “Game sales continue to fire on all cylinders,” he said, adding that the company had just entered the Manitoba video-lottery-terminal market.
Regarding the high-profile withdrawal of Dragon Train, Wilson said that 95 percent of 2,200 installed units had been replaced with other titles from the company’s repertory of 130 games. “This is a testament to the depth of our cabinets and games offer. We’re still in the very early innings and are just starting to see the first fruits of our investment,” Wilson cautioned. He did, however, look forward to the launch of the company’s Huff ’n Puff Hard Hat edition, the newest iteration of the decade-old Huff ’n Puff game franchise.
In the electronic-table-game field, Wilson looked forward to the rollout of Automatic Roulette, while saying the company was ramping up its shuffler and table-game businesses.
“Each quarter proves to be the same,” the CEO said of his company’s SciPlay division, which he said is experiencing growth across its top four games. “We continue to see healthy year-over-year growth,” he added of daily average-user revenues. “Overall, the confidence is high in our ability to optimize the SciPlay engine.”
In igaming, Wilson said Light & Wonder is leading the United States market in slot gross gaming revenue (GGR) share, as well as leveraging content from other divisions. He cited the Thundering Blaze and Rich Little Hen games as examples.
While asserting that subsidiary Lightning Box had seen a 33 percent jump in GGR, Wilson said, “We aspire to be more than the leading provider in the igaming slot-game space.”
The CEO wrapped up his formal presentation by saying Light & Wonder’s fiscal outlook “remains promising. We have the right people to execute on our vision to grow the company sustainably. We will continue to invest in talent for further growth.”
Taking up the baton, CFO Oliver Chow said the company had “sustained double-digit top-line growth.” He pegged global machine-sales increases at 38 percent.
Chow allowed that there would be some adverse revenue impact coming from Dragon Train-related conversions. But he said, North American unit sales are up 31 percent, “a record high.” He added, “The quality of our hardware is driving further upgrades.”
Of SciPlay, Chow said “We continue to achieve strong monetization measures across the board. We will continue to reinvest to expand our player-monetization base.” Chow saw continued U.S. and European growth in igaming, and especially in Canada.
“As you look around the success stories in the gaming industry, you will see that this is a culture- and R&D-centric business, where sustainable growth is not achieved by subtraction,” the CFO continued. “Staying nimble and adaptive is a hallmark of our organization,” one that Chow said is still looking for ways to enhance margins, in part by eliminating redundancies, among other several cost-saving measures.
Regarding possible mergers or acquisitions, Chow would only say, “We will continue to look at options that are complimentary to our core business with a disciplined approach.”
As for guidance, the CFO stated that he expected 10 percent cash-flow growth. He said Light & Wonder remains on track for its $1.4 billion cash-flow target, with no material changes expected in corporate costs.
Dragon Train remained, however, at the forefront of assembled Wall Street analysts’ concerns. Without elaborating on previous remarks, Wilson said, “The team pulled together and delivered another set of outstanding results,” losing fewer than 100 machine placements.
A promised second iteration of Dragon Train would be available “in short order,” Wilson said, downplaying its importance. He declined to go into specifics of a Dragon Train reboot, out of concern that competitors might be eavesdropping on the earnings call.
He reiterated that Light & Wonder was the number-one slot provider in Australia, where Dragon Train is presently being litigated and where Wilson intends to use new products to fill any possible gap. “We don’t see a scenario where those [Dragon Train] games that are owned by our customers are impacted.”
Wilson also said the company is diversifying away from the Class III slot-replacement business and “laddering up” other opportunities and jurisdictions. He continued that the expansion of the installed-slot base — as opposed to replacements – is driven by the best players seeking the best available games. Not purchasing those to save on casino budgets is, he concluded, “false economics.”
Chow and Wilson also stressed new overseas markets. The latter called the Philippines “a near-term opportunity. There are some big ambitious plans as far as GGR.” Macau is “also a good opportunity for us … a two-horse race” among slot makers.
The CEO termed the United Arab Emirates market, one in which Light & Wonder is pursuing licensure, “very interesting.” Likening international regulatory challenges to working a Rubik’s Cube, Wilson said global markets bode well for a multinational operator such as his company.
Further down the road, Wilson cited Thailand and Japan as “a really unique set of opportunities coming on line, meaningful catalysts on the horizon for the gaming business.”
Wilson also promised a post-2025 growth story for investors. “There’s no doubt about that,” he said, without elaboration.
