At L&W in Q2, records fall as SciPlay acquisition approaches.

While the corporation said that full purchase of SciPlay is anticipated to completion before the end of the year, Light and Wonder (L&W) enjoyed continued record performances across its igaming and SciPlay businesses in Q2.
Light & Wonder RouletteX: Following record Q1 performance by the segments, revenue achieved all-time highs for both companies. Thanks in part to increased sales in North America and Australia, L&W also observed revenue growth within its core gaming division during Q2.

In relation to Australia, L&W continued with a secondary listing in Q2 on the Australian Securities Exchange (ASX). On the ASX, L&W shares has traded for around AU$1.00bn (£514m/€598m) thus far.

SciPlay deal scheduled for Q4 closure
L&W also developed strategies to leverage SciPlay's expansion by purchasing the outstanding public shares of the company in Q2. Declared in May, the agreement puts SciPlay entirely back into the L&W company and is worth US$422m (£331m/€385m).

Matt Wilson, CEO Light & Wonder
The group presently owns 83% of the economic interest in the social gaming company and 98% of the voting interest, CEO Matt Wilson notes. Other businesses lack the range of assets Light & Wonder offers. According to L&W CEO Matt Wilson, the purchase should close by the end of the year and is almost done.

"We are thrilled about the announcement," Wilson said on L&W's earnings call. We have a firm agreement here. Although this is really the last significant milestone for us in terms of platform optimisation, we anticipate closing in Q4.

"There are not many players in the market with the special set of assets we own, the land-based company, the top igaming position, then the fastest expanding social casino company. So, integrating SciPlay back into the family required releasing that full potential of creating the best items for the planet.

Light and Wonder Q2: Broad-based revenue increase
Up 19.8% year-on-year, group revenue for the three months to 30 June came at $731m. This came from expansion in every one of L&W's three business divisions.

Services activity accounted for around $496 million of overall income, while remaining $235 million from goods sales. 

Frankenstein, Light & Wonder
In Q2 gaming continued to lead the way with revenue increasing 20.8% to $471m. Sales of gaming machines were up 41% year-on-year. Gaming machine sales increased 41% while gaming systems and table items income gained 20.0% and 34.0%, respectively, L&W observed.

Turning now to SciPlay, income increased year-on- year by 18.8%, reaching a record $190m. L&W attributed this to the main social casino business, which it claimed exceeded the market and acquired share while providing good payer data.

Another fresh record for L&W, revenue from the igaming company also rose 16.7% to $70 million. The company claimed this was a result of ongoing US growth, where income increased by 32.0%. This will probably rise once again when L&W gets ready to open a live internet casino in Michigan during H2, awaiting legal clearance.

Lottery sales affect yearly Q2 comparisons.
Examining Q2 spending, running expenses at $618m were 9.6% higher. With exception from reorganisation, L&W spent more in all spheres. At $203 million, selling, general and administrative stayed as the top outgoing. 

Games for Science
Last year, the Scientific Games moniker and the lottery business were sold.
L&W also recorded $93m in other, finance-related expenses, indicating pre-tax earnings from ongoing operations topped €20m. This ran counter to the $140 million loss recorded at the same stage in 2022.

The group paid income tax of $15 million, leaving a net profit from ongoing operations of $5 million against the $150 million deficit of last year. At $281m, adjusted EBITDA also rose by 32.6%.

When included abandoned activities, though, the results produce different readings. April last year saw L&W finish the $5.80 billion lottery business sale to Brookfield Business Partners.

In Q2 last year, net profit from ceased operations came out to be $3.26 billion. As such, the year-on- year comparison shows $1.0m net loss in 2023 against a $3.29 billion profit last year after also deducting $6.0m in net profit from non-controlling interest this quarter.

First half brings revenue of $1.40 billion.
Turning now to the first half and how Q2 affected L&Ws performance in the six months to 30 June, income came to $1.40bn. This exceeded $1.18bn in the year before by 18.3%.

At $890m, gaming income was 19.5% higher; SciPlay income increased 18.2% to $376m; igaming income rose 11.7% to $134m. Regarding general performance, sales of products brought in $427 million while services income came at $973 million.

At $1.19bn, operating expenses were 8.0% higher; finance costs came to $169m. Pre-tax profit from ongoing operations therefore came at $46m, compared to a $213m loss last year.

L&W paid $14 million in taxes, so net profit from ongoing operations came out to be $32 million, a notable increase over the $217 million loss of previous year. Additionally rising 22.8% to $529m was adjusted EBITDA.

Regarding stopped activities, net profit last year came out to be $3.54 billion. The year-on--year comparison was $21m in net profit for 2023 against a $3.32 billion profit last year after removing $11m in net profit from non-controlling interest this quarter.

"Our reported numbers continue to validate the investments we have made in our company and show the notable advancement we are making towards our long-term targets," Wilson added. 

"Year to date, we generated strong cash flows and lowered leverage across all three of our companies, delivering double-digit top and bottom line growth that resulted in an outstanding second quarter."

James gets ready to leave Light & Wonder in CFO capacity.
As L&W's chief financial officer, Q2 represented the last full quarter of Connie James' tenure. It was confirmed last month that she will retire at the end of August.

Leave Chief Financial Officer Connie James is getting ready to leave her post at L&W.
Oliver Chow, L&W's senior vice-president of corporate finance, will fill in as temporary CFO. With a search in progress, he will serve until a permanent replacement is named. 

"I am proud to have been part of such a diverse and capable team and of our many accomplishments during my time here," James stated. "We are now positioned with a good balance sheet and a smart capital allocation plan after reaching many significant benchmarks in changing the business. 

"The deliberate execution ingrained in our DNA is reflected in the second quarter's continuous expansion. Leading cross-platform worldwide games firm L&W is in solid hands moving ahead with a lot of talent, sound financials, and an amazing portfolio of assets.