Light & Wonder, Inc.

thank you for your patience the light and wonder 2022 third quarter investor conference call will be starting shortly Welcome to the Light and Wonder 2022 Third Quarter Investor Conference Call. At this time, participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, please press star 1 on your touch phone keypad. And if you change your mind at any time, please press star 2. And for operator assistance at any point, please press star 0. Thank you. Now, let me turn the call over to Jim Bombassi. Senior Vice President of Investor Relations for Light and Wonder. So, Mr. Bombasi, you may begin.

Thank you, Operator. Good afternoon, everyone. During today's call, we will discuss our third quarter 2022 results and operating performance, followed by a question and answer period. With me today are CEO Matt Wilson and CFO Connie James. Our call today will contain statements that include forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call. For information regarding these risks and uncertainties, please refer to our earnings release issued earlier this afternoon, the materials relating to this call posted on our website, and our filings with the SEC. We will also discuss certain non-GAAP financial measures. A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings release as well as in the investor section on our website. On September 27th of 2021, we announced that we had entered into a definitive agreement to sell our sports betting business to Endeavor and subsequently closed the transaction on September 30th of this year. During the second quarter, we completed the sale of the lottery business to Brookfield Business Partners. Accordingly, we reflected these businesses as discontinued operations in our consolidated statement of operations for all periods presented. We are reporting our results of continuing operations in three business segments, gaming, side play, and iGame. Amounts and disclosures referring to combined include both our continuing and discontinued operations. As a reminder, this conference call is being recorded. A replay of this webcast and accompanying materials will be archived in the investor section of our website at www.lnw.com. And now I'll turn the call over to Matt.

Thanks, Jim. Good afternoon, everyone, and thank you for joining us today. It's great to be here with you on my first earnings call. I'm excited to have taken over the reins at Light & Wonder. and honoured that the board has placed its trust in me to lead the company on its journey to becoming the leading cross-platform global games company. We have a unique collection of assets that is at the core, powered by game technology and our amazing team. I'm focused on continuing to build on our great momentum and capture the incredible opportunity in front of us. We have undertaken an extraordinary transformation to evolve our portfolio that clearly positions Light & Wonder to lead the cross-platform future for our customers, and our players. This quarter demonstrated the clear progress we are making strategically, operationally and financially. I want to congratulate our teams for their passion, continued focus and dedication. It is this commitment that enabled us to achieve a number of key milestones and provides us with a strong foundation for our future. I'm very pleased with our performance this quarter and this year. We are successfully executing on our key initiatives and robust roadmap to unlock our full potential. Turning to the quarter, we closed the sale of the sports betting business, which marked the final step to streamline our organization and further strengthen our balance sheet, enabling us to achieve a net debt leverage ratio at 3.1 times at the end of the third quarter, squarely within our target range. This financial strength and flexibility enables us to further advance our capital allocation priorities, returning capital to shareholders through our share buyback program and investing in our core growth areas. To that end, Through November 4th, we repurchased a total of $241 million or $4.4 million of our shares under our $750 million three-year share repurchase program, or over 30% of the total authorization since we implemented the program in March of this year. With the heavy lifting done around the transactions and the balance sheet, we are now a rebranded company with three complementary business units and our R&D engine at the center of our universe. With a sharpened focus and a clear roadmap to win, we are executing on our growth strategy to take share. Key to this is our deep understanding of players and customers and what makes great games. That's why we've bolstered our R&D engine over the past couple of years and enhanced our world-class game design talent. The launch of Studio X is a great example of this, and we received overwhelmingly positive feedback on their first game showcase for G2E, Dragon, and Frankenstein. It is the scale and scope of our R&D engine that provides us with a key competitive advantage. And now our firmly established financial strength enables us to invest in our future through various economic cycles. With games and platforms at our centre, we are harnessing one of our key competitive advantages, robust data, analytics and play insights from across the organisation to enhance our game product roadmap and our success. Importantly, we continue to look at ways to advance our business as we invest in our future. With the announcement of our most recent asset acquisition, House Advantage, we are reinforcing our commitment to our systems business, and with John Wolfe now heading the group, cementing our leadership position in systems and our ability to chart the future in the increasingly converged gaming industry. Now let's turn to quarterly results. Overall, we delivered strong double-digit top and bottom line results year over year with consolidated revenue growth of 20%, and consolidated Aebitda growth of 16%. We made great strides investing in our product roadmap as we scaled our original content launches across our businesses. We achieved strong performance from a number of our new games and saw continued share gain. Importantly, despite macroeconomic uncertainty, we continue to see strong GGR levels as we benefited from a resilient LAN-based gaming industry, successful product roadmap, and continued strong performance in our iGaming and Sideplay businesses. And now let's go into the performance of each business unit. In gaming, we continue to build on our momentum, making great progress and delivering gains in each business line. And with competitive cabinets in each critical segment, enhanced systems and table offerings, we are well positioned to benefit as operators continue to invest in their floors. Our North American premium install-based brew for the ninth consecutive quarter and now stands at a record 45% of our North American install-based mix. Revenue per day increased approximately 7% year over year and remained on par with second quarter levels, reflecting the resiliency of the gaming industry. Looking at the most recent iOS research, we continue to hold the number one spot in premium leaf segment with our game Ultimate Firelink Explosion. Moving to game sales, growth was driven by increased unit sales in both North America and internationally, as we shipped over 7,200 units globally, up 45% year over year. demonstrating our ability to continue to meet the increasing demand from operators while successfully navigating the global supply chain. From a content perspective, in North America, we took two of the top five spots in the new core game rankings in Islas with Huff & More Puffs and Goldfish Feeding Time Castle. Moving to Australia, we have seen a remarkable three-fold increase in our ship share over the last 18 months, which now stands at approximately 20%. We hold the top four games in Queensland, which is a company first, led by our leading title, Dragon Unleashed. In our systems business, North America machines connected to our network have grown sequentially since the first quarter this year, and with our acquisition of the Halo Loyalty Solutions platform and other assets from House Advantage, we continue to advance our systems capabilities, enabling the player journey. Cashless was again a topic of interest this year at G2E, and our leading IB4 hardware continues to drive growth in our systems business and cashless enablement. Demand for the IV4 product remains strong, with unit sales nearly doubling year over year, and is now deployed across approximately two-thirds of the slot machines connected to our systems platform. And in tables, we're seeing a broad recovery as we continue to add to our Vault subscription program and saw continued growth in our shufflers and store base. We received great customer feedback on new table solutions displayed at G2E, including the Car Recycler, our RouletteX cross-platform content, and our Shuffler Connect Tables data solution. We occupy leading positions in every category, and that's unique to Light and Wonder, and provides clear competitive advantage. In addition, our gaming business is highly cash-generative, providing the capital to fund investments across our organization. And we couldn't be more thrilled for Siobhan Lane to be named permanent CEO of gaming to continue to grow this business going forward. Moving to iGaming, we have an unrivaled offering for our partners and players. Our LAN-based and digital native content unmatched iGaming platform and leading PAM enables us to participate in every part of the value chain. In the quarter, US growth remains strong with revenue up approximately 39% year over year, driven by overall market GGR growth. We have been ramping up our original content offering in the US with record launches of land-based titles, including Coin Combo, Carnival Cow, Dancing Drums Prosperity and Goldfish. as well as great content from our Lightning Box studio, which continues to post record GGR. In fact, among the top 20 games on our iGaming platform in the US in the quarter, our original content generated approximately 80% of the GGR in this quarter. We will be launching even more digital native content soon as we bring Elk Studios' great games to the US. This combination of both a strong land-based and digital native content offering gives us an unrivaled position in the market as we continue to gain share. We saw year-on-year sequential growth in GGI internationally in all regions. Performance benefited from our regional content roadmap and increased original content launches with strong results from games including Rainbow Riches Piles of Cash, Action Bank Cash Shot, and Stash and Grab, as well as record performance in September from Elk Studios. We continue to be excited about PlayZito, which has completed over 30 operator integrations since we closed on the acquisition, and most recently added partner studio, Avatar UX, where we'll co-develop games and provide expanded content offering to our customers. With Live Dealer, we took a capital efficient approach to enter this important segment of the market, combining the targeted acquisition of Authentic with our proprietary table games IT and expertise. We are actively preparing to go live in Michigan shortly with three major product offerings, Blackjack, Baccarat, and Roulette. Going forward, we are well set up for growth with a number of key initiatives globally, including the continued scaling of our original game launches globally, the ramping of exclusive content for operators, and plans to launch LiveDealer in the US. Turning to SidePlay, we delivered another strong quarter with record revenue performance as we outpaced the market. Our investments in our core capabilities continue to drive enhanced engagement and monetization, helping fuel record quarters at Jackpot Party and Quick Hits. Underlying these results was the quality of earnings, with record up-down, record monthly paying users, and record payer conversion. SidePlay continues to make great progress with their investment to centralize their best-in-class features and capabilities in the SidePlay engine and in their direct-to-consumer platform that they expect to launch this quarter. This all adds up to a stronger position as they gain deeper insights into their players, drive greater engagement and monetization, all pointing to enhancing long-term growth and margin expansion. Adding to this, we are leveraging Ellictus' strong in-app advertising technology across our platform. Ellictus provides us with a head start on our ad monetization capabilities, accelerating Sideplay's ability to further enhance player lifetime value. Sideplay has made great progress this year on a number of key initiatives. It is a highly cash-generated business, and while we have delivered outsized performance, we believe there's considerable opportunity to continue to grow and scale after, fueled by our talented team, evergreen franchises, sticky cohorts, and a disciplined approach to investing. All of this gives me great confidence that our future has never been brighter. Our strategy is in place, and we are taking share with our robust R&D engine, investing class talent. Our strong balance sheet and operational momentum gives us the ability to leverage our leading industry positions, evergreen franchises, and unmatched platforms to drive sustainable growth and significant value. Fostering a high-performance culture and making disciplined investments in our future while maintaining a laser focus on operations and execution will underpin our success. And that will enable us to unlock our full potential and drive greater value for all of our stakeholders. With that, I'll turn it now to Connie to discuss our financial progress for the quarter.