Light & Wonder, Inc.

Welcome to the Light and Wonder 2024 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. And I would now turn the call over to Nick Zangari, Senior Vice President of Investor Relations.

Thank you, Operator, and welcome everyone to our First Quarter 2024 Earnings Conference Call. With me today are Matt Wilson, our President and CEO, and Oliver Chow, our CFO. During today's call, we will discuss our first quarter results in operating performance, followed by a question and answer session. Today's call will contain forward-looking statements that may 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 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 located in the Investors section of our website. 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. With that, I will now turn the call over to Matt.

Thank you, Nick, and thanks to everyone for joining us today. Our first quarter performance marked a great start to 2024 for Light and Wonder, building on the momentum that we've created since we began our transformation journey and affirming our position as the leading cross-platform global games companies. During the first quarter, our team did an outstanding job executing our strategy and meeting our financial and operating objectives. Oliver will provide more details in his financial comments, but we are extremely proud to deliver our 12th consecutive quarter of year-over-year growth and our 6th consecutive quarter of double-digit revenue growth across all lines of business. The gaming industry has proven to be resilient in today's macroeconomic environment. with healthy consumer demand fueling our impressive growth. These strong results confirm that we are investing in all the right places and in the right talent, providing innovative content and cutting-edge technology that enhances the player's experience and builds a loyal customer base. We will continue to execute diligently with a focus on driving sustainable long-term growth. For Light & Wonder, it's all about the game. Our aspirations go beyond just one brand or franchise. We are fortunate to have a robust and diversified roadmap, both in engaging and dynamic game content for players to enjoy across all of their favourite channels. With that, let's turn to our operational highlights for each business. In gaming, we continue to make significant progress on our journey. And given the quality of products, this year as an inflection point, we'll start scaling our game ops fleet in a meaningful way. As many of you have heard, our Australian-born hit franchise, Dragon Train, has arrived in the US and is expected to contribute to gaming operations growth this year. In fact, Dragon Train debuted as the top new franchise with four of its titles in the top 10 indexing new premium lease games on the Irish report. Our commercial team is collaborating with our operator partners and being strategic with placement as we continue to optimise the flaws for performance while preserving the longevity of our existing units. That said, our North American premium install base has grown for 15 consecutive quarters and now represents 49% of the North American install base. Just recently, we also launched our new large screen jumbo cabinet, Horizon, with Dancing Drum's ultimate explosion and it's off to a strong start. Our execution on license titles is second to none as Monsters Frankenstein continues to perform well on the charts with more placements on the floor. We are prudent with life and spend with a disciplined focus on ROI and this gives me the confidence that we will capitalise on the upcoming launches such as Squid Game in the near future. On to game sales. During the quarter, we shipped close to 9,700 units globally with broad-race strength across the board and achieved number one ship share in Australia for the first time ever in the company's history. We see opportunities outside of the traditional North American and Australian replacement markets as we further deliver units into international opportunities and adjacencies, such as shipments to Asia, specifically Macau, Philippines, and South Korea in the quarter. In the adjacent markets, we are progressing well with the Oregon and Canadian VLT shipments, with rolling sales into the Georgia coin-operated amusement machine market, as well as various other video lottery, class 2, and historical horse racing markets. We will continue working towards gaining share in the North American markets, on the backs of our wide array of successful franchises, such as Blazing 777, Huff & More Puffs, Big Hop Flaming Pops, Lion Link and Goldfish. Onto systems and tables, our rebound strategy of enhanced collaboration driven by innovation is expected to provide sustainable momentum, further solidifying our leadership position with a focus on increasing recurring revenue streams by expanding system software and maintenance services and table product subscriptions as we continue to be the innovative thought leader in the space. Overall, we have strong conviction in gaming's growth trajectory, as we continue to build on our hardware, brands and franchise extensions. With recent data showing our hit game, Huff and even more tough, indexing as the number one overall new core game. Enlightened Wonder occupying 12 out of the top 25 games on the new premium lease and wide area progressive chart. We are well positioned to capture the opportunities ahead of us. Turning to Sideplay, where our steady outperformance continues as we delivered another record revenue quarter up 11% year over year, driven by continued growth in our largest four games. Jackpot Party, Quick Hit Slots, Goldfish Casino and 88 Fortune Slots. We continue to gain share in a stabilising social casino market as we have for the last nine quarters and are now at over 11% market share. The investments we've made in our Sideplay engine and user acquisition are bearing fruit, and the results are reflected in the strength of our portfolio of gains. Meanwhile, average monthly revenue per paying user and average revenue per daily active user once again reach new heights as we continue to execute on our prudent and sustainable monetisation strategies, one that has proven to work very well as we navigate seasonality in the business with favourable results. The marketing campaigns launched in the quarter solidify our conviction of investing in opportunities which are expected to generate attractive payback periods to fuel sustainable long-term engagement and monetisation. SidePay is the best in the industry in terms of user acquisition execution, which we've demonstrated consistently in our performance. In addition to executing to our marketing blueprint, some of our other growth initiatives include testing and scaling of new games, and taking learning to drive success for next phase progression into ad tech. Most importantly, we've made meaningful progress on our direct-to-consumer platform in the last six months, with approximately 6% of revenues generated from this channel in the first quarter. Our focus here is to proceed deliberately, ensuring a high-quality user experience to encourage player engagement. Overall, we see this as a great long-term opportunity as we continue to refine the platform and scale it across our games. With Sightplay's clear strategy and focus on roadmap execution, we are differentiating ourselves as one of the clear leaders in the space. On to iGaming, where the robust industry growth we saw in North America propelled us to another record revenue quarter. Our OGS platform delivered record gross gaming revenue volumes in the US and Canada, as we saw year-over-year increases of 23% and 29% respectively. This impressive growth was further accentuated with our content strategy and roadmap. In fact, we continue to see stellar performance from our first-party content with ultimate filing, cashfalls, reflecting solid performance, continuing the success we've seen with our proven land-based franchise. Elk Studios and Lightning Box continue to perform above expectations, a testament to our OGS platform providing valuable insights to their game data prior to Light and Wonder's acquisition of these high-performing studios. Elk Studios' GGR is up 34% compared to prior years, driven by strong performance across Pilots 2 and Cygnus 4. Lightning Box had a record GGR quarter, with sequential growth of 12%, supported by strong launches from the Thundering series. PlayZero has also begun to scale, with nine studios now live, connected to 72 operators across 10 markets, as we continue to build on the accessibility and scalability of our iGaming network. LiveCasino continues to be an important part of our overall iGaming portfolio, as we continue to invest and optimize our offerings. We continue to see progress and believe that our collaboration with operator customers will ultimately solidify long-term partnerships as we scale and expand into other regions in the future. iGaming is one of the fastest growing segments in the gaming space. as we continue to see within the US market in the quarter. We will continue to expand our content portfolio and cross-launch our proven land-based and digital native games, along with enhanced capabilities and new features added to our existing offerings, rounding out our robust iGaming portfolio to capitalise on legalisation opportunities in the future. With our unmatched market position and cross-platform capabilities, Light & Wonder has created a compelling value proposition, Our results clearly demonstrate that we are delivering the iconic content that players want, with the ability to choose where and when they want to play their favourite light and wonder game. Across our business units, our industry-leading talent and high-performance culture are the key to our past success and provide confidence for our future. We will continue to enhance our talent and invest in our culture to drive innovation and promote the lasting impact of our product offerings. Importantly, we will support our creative talent and strategic initiatives with disciplined R&D investments that drive long-term sustainable value. Above all, we're going to focus on operational excellence as we continue to extend our market reach. And I want to thank the team for their dedication to this journey. I'm very excited about the momentum we are creating and look forward to the opportunities ahead for Light and Wonder in 2024. The best is yet to come. With that, I'll turn to Oliver to review our first quarter financial results.