written and last updated by
Sam Smith at
02 Mar 2023
Journalist, Editorial Department
Light & Wonder Inc., a major supplier of casino equipment, has reported its fourth-quarter sales and operating profits, with actual figures surpassing Wall Street forecasts thanks to a remarkable 41% increase in slot machine sales.
According to the company, revenue from continuing operations rose 18% to $682 million (over 51.4 billion rubles), exceeding analysts' expectations of $654.9 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $265 million (nearly 20 billion rubles), also beating projections.
Over the past two years, L&W, formerly known as Scientific Games, has faced significant challenges. In an effort to reduce its debt, the company has sold off assets in the lottery and sports betting sectors. By the end of 2022, total debt had decreased from $8.69 billion to $3.89 billion.
Matt Wilson, who took over as CEO in October, stated in an interview that he believes the decision to exit the sports betting market was the right one, as the market is consolidating around just three major operators, which could potentially "crush" a B2B supplier in that scenario.
Currently based in Las Vegas, the company operates in three areas: land-based casino games, real-money online gambling, and social gaming. Wilson noted that concepts that succeed in one area can also work in others, requiring significantly less investment than starting from scratch.
CFO Connie James believes that online gambling is not yet as profitable as other segments of Light & Wonder's business, as the company still needs to see legalization in more states. Meanwhile, sales of slot machines for land-based establishments surged by 41% in the fourth quarter, as casinos in the U.S. and abroad replace outdated machines with new models after years of underinvestment during the pandemic. Wilson is optimistic that this trend will continue: "Our order book is overflowing; these venues are eager for a refresh."
It's worth noting that Macau casinos are also on the path to recovery, with revenue in February rising by 33%.
