Gaming products and services provider Light & Wonder has shared its results for the third quarter of the year. For the period ended September 30, the company delivered revenue growth of 20% year-over-year, amounting to $648 million. Growth was driven “by all lines of business,” with a double-digit revenue jump in Gaming and a year-over-year increase in social gaming with SciPlay, which reached a quarterly record, and “strong momentum” across iGaming.
However, income from operations saw a sharp decrease, standing at $20 million, compared to $100 million in the prior year period. The company noted net income dropped as Q3 2021 benefited from a $181 million income tax benefit as a result of the partial reversal of Light & Wonder’s valuation allowance on deferred taxes.
Matt Wilson, President and CEO of Light & Wonder, said: “With the sale of the Sports Betting business, we have rapidly delivered on our promise to transform our business and streamline our organization. We have a unique collection of assets that are powered by games, technology, and our amazing teams. Our strengthened balance sheet puts us in a great position to build on our momentum and capture the incredible opportunities in front of us.”
Wilson, who assumed the roles on a full-time basis in October – having previously served as interim CEO since August after the departure of Barry Cottle –, said the quarter’s results reflect “the tangible progress” the company is making, as it delivered double-digit topline growth and saw “clear momentum” across all businesses.
Former CEO Barry Cottle, who left the company in August
Wilson is taking charge at a transformative time for the company, which sold its Lottery business to Brookfield Business Partners in April; and sold its OpenBet sports betting platform to Endeavor in October. “With our strategy in place and with operational momentum building, we have an unrivaled ability to leverage our leading industry positions, evergreen franchises, and unmatched platforms to drive sustainable growth,” the executive said of the new streamlined approach.
Connie James, CFO of Light & Wonder, added that over the last 18 months the company has been able to redefine its portfolio of businesses and strengthen its balance sheet and credit profile, “all while executing on our strategy to drive sustainable differentiation and growth.” James added Light & Wonder has made “tangible progress” each quarter against its priorities.
With the proceeds from the Lottery and Sports Betting divestitures, the firm has “significantly bolstered” its balance sheet, enabling it to achieve a net debt leverage ratio of 3.1x, now squarely in its targeted range. “With this significant milestone, we are now advancing our capital allocation priorities of returning capital to shareholders and investing in growth,” noted James.
In addition to being part of the company’s strategic roadmap, the sale of the Sports Betting business generated approximately $800 million in gross proceeds for Light & Wonder. As for continuing segments, Gaming revenue increased 24% to $419 million, driven by 47% growth in machine sales, and Gaming Operations revenue benefitted from year-over-year growth in the company’s North American installed base and average daily revenue per unit.
SciPlay saw a revenue increase of 17% to a record quarterly revenue record of $171 million, with growth primarily driven by the core social casino business, “which delivered strong payer metrics and once again outpaced the market and gained share.” Meanwhile, the iGaming segment’s revenue increase was at a single digit, at 9%, amounting to $58 million. Revenue here was primarily driven by growth in the US, “partially offset by approximately $5 million in unfavorable impact of foreign currency translation due to the strengthening US Dollar.”
