Light & Wonder enjoys ‘pivotal’ 2022 as momentum gathered after lotto and betting sales

caterpillar to butterfly representing tranformation
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2022 proved to be a transformative year for Light & Wonder, which confirmed its restructuring and rebranding efforts during the last 12 months. The global gaming firm’s new CEO Matt Wilson was particularly pleased with the momentum it has gathered as the gaming and igaming units showed signs of recovery from the Covid pandemic. 

Publishing its Q4 and 2022 financial results, Light & Wonder revealed fourth-quarter revenues of $628m, up 18% year-over-year. This pushed full-year turnover up to $2.51bn, up 17% YoY as the SciPlay recorded record revenue and the gaming unit closed in on pre-Covid levels. 

Light & Wonder displaying strong momentum after rebrand

Breaking down the revenues by division, the gaming unit was L&W’s most lucrative division, yielding $1.6bn in annual revenue, up 21% YoY as the firm secured strong sales of gaming machines and gaming operations surpassing 2019 levels. 

Meanwhile, the SciPlay unit enjoyed revenues of $671m, up 11% YoY which included a quarterly record in Q4. Finally, the igaming revenue increased by 6% YoY, reaching $240m. 

Increased revenues across the board helped L&W’s total EBITDA for 2022 reach $913m, representing an increase of 15% as the company shows good signs of growth post-divestiture. 

Matt Wilson, President and CEO, commented on annual performance: “2022 was a pivotal year for Light & Wonder. We delivered on an ambitious and transformative plan while driving operational success and double-digit growth in our business.

“We are excited about our future and see strong momentum continuing in the business in the year to come. Our industry-leading talent, games and technology put us in a strong position to deliver on our product roadmap, capitalize on the enormous opportunities ahead and lead in the convergence of gaming.”

Online Casino big in US

One key highlight of 2022 for Light & Wonder was the strength of its igaming unit which enjoyed 15% increase in revenues and 27% increase in EBITDA. 

The firm explained that this was driven by strong online casino performance in the US market, which is experiencing ‘strong growth momentum’. 

For online casino, L&W noted that its US operations enjoyed 41% growth due to scaling up its aggregation platform. Wagers processed through its online casino platform increased to $19.1bn in the fourth quarter despite the adverse impact of the foreign-currency translation.

A year of transformation

During the year, Light & Wonder completed the divestment of both its lottery and sports betting businesses, in an effort to transform its balance sheet. 

The lottery business was sold to Brookfield Business Partners for around $5bn, whilst the sports betting business – OpenBet – was offloaded to Endeavour for $800m. 

Consequently, the firm paid down approximately $4.8bn of debt during 2022, reducing debt outstanding by 55% to $3.9bn by the end of the year.

Despite a strong balance sheet and increased topline and EBITDA growth, Light & Wonder made an annual net loss of $176m, compared to a net income of $24m in 2021. 

This was attributed to 2021 comparatives which gained financially from an income tax benefit as a result of a reversal of its valuation allowance on deferred taxes. Furthermore, 2022 included a $147m loss on debt financing transactions in the current period.

Connie James, Chief Financial Officer of Light & Wonder, added: “We are proud of the tremendous and rapid progress we have made over the past 18 months. We delivered quality earnings, setting the foundation for sustainable growth going forward as we continue to focus on delivering shareholder value.

“We also returned significant capital to our shareholders, totaling $413m since our share repurchase program was announced a year ago. We now have a strong balance sheet and a clear roadmap to advance with discipline on our balanced and opportunistic capital allocation strategy and elevate Light & Wonder’s value proposition.”