Light & Wonder’s Q4 Earnings Beat Forecasts, Stock Climbs

Whether you know them as Shuffle Master or Scientific Games, the frequently renamed giant in gambling products and services released its Q4 and full-year earnings. Results generally topped investors' and analysts' expectations, with top-line revenue of $3.19 billion for the year. This represents a 10% improvement over the figures from 2023.

Net income was $336 million, while profit margins rose to 11%, largely driven by revenue growth. The company is signaling near 7% growth going forward for the next three years. Net cash was a healthy $633 million, and EBITDA for the full year was $1.24 billion.

Their Sciplay unit, which concentrates on social casinos, had revenue of $821 million for the year, up 6% year over year, and iGaming revenue was $299 million for the year, up 9% year over year. The company repurchased $462 million worth of shares, more than half of them in Q4. There is about $3.9 billion in outstanding debt, which leads to a debt/leverage ratio of 3x.

The company says it will continue to look for M&A activity that is accretive to earnings and at the right price, pointing to their announcement last week to buy Grover Charitable Gaming for $800 million. 

Grover has placed more than 10,000 electronic pull-tab machines across Kentucky, New Hampshire, Virginia, North Dakota, and Kentucky, producing about $111 million in EBITDA every year. This works out to a multiple of about 7.7x, almost certainly a fair price in what has been a frothy market.

It also positions them well in the charitable gaming sector going forward while not exceeding their target leverage ratio of around 3x. With added synergies and cost savings that Light and Wonder will wring from the deal, most analysts applauded the move. 

Oliver Chow, Light & Wonder's CFO, highlighted a strong performance in North America, where the company now has 34,000 installed units, 2,800 of which were added just last year. Unit shipments grew 25% YoY in Q4. He also noted promising growth in the social casino segment, where average daily revenue per user surpassed $1 for the first time, reaching $1.06.Monthly revenue per paying user also rose to a healthy $117.

Leading into next year, L&W notes a "healthy replacement trend" in North America as many casino operators turn to newer, higher-revenue slot machines. They also note continued iGaming market growth in legal states and provinces. Their rollout of Huff and Even More Puff in February, exclusively with FanDuel in five US states and Ontario, has been the most successful launch of a new online game in the company's history. 

They also teased a new Wizard of Oz game, a new Invaders from the Planet Moolah offering, and even more Dancing Drums and Huff and Puff titles rolling out throughout 2025. Matt Wilson, Light and Wonder CEO, stated in his comments that his crystal ball at least didn't seem to indicate any new states passing iGaming legislation this year. 

Since the earnings announcement, L&W's stock has risen 9%, reflecting confidence in a strong Q4 and a solid 2024 performance. The accretive earnings from the Grover Charitable Gaming acquisition should contribute directly to the bottom line once the deal closes this spring or summer. With continued momentum in iGaming and social casinos, the company appears well-positioned for further growth.