Light & Wonder, Inc.

hello and welcome to the light and wonder 2024 third 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 fill it by one on your telephone keypad i will now turn the call over to nick zangari senior vice president of investor relations and treasury

Thank you, operator, and welcome everyone to our third 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 third 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 investor 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 investors section of our website. With that, I will now turn the call over to Matt.

Thank you, Nick, and hello, everyone. Thanks for joining us today. Before diving into the third quarter results, I'd like to congratulate the team for another strong showing at G2E, where we showcased Light and Wonder's strongest ever content roadmap earlier last month with over 80 unique game titles across our high-performing cabinets. We've gotten great feedback from our customers and across the industry that we've certainly come a long way since the transformation with games and offerings that are market tested with staying power. Importantly, the success you are seeing is attributed to the diligent recalibration of our R&D engine, identifying and aligning resources to the most impactful initiatives that drive game performance. Just recently, we launched our newest studio in Reno, which will support our sustained growth aspirations well past 2025. and I'll be on my way to Light and Wonder's annual Best Games workshop shortly, an event where we all gather our game designers in a collaborative environment to experiment and innovate new ideas for the future. This is the culture we are fostering, and the teams are excited to have the opportunity to engage with other game developers across the organisation to support the next chapter of our growth. Now turning to the quarter, we continue to see stability and resilience both industry-wide and within our operations. our results for the third quarter can confirm our success as evidenced by our 12% increase in consolidated revenue year over year, representing our 14th consecutive quarter of consolidated revenue growth and 9th consecutive quarter of double-digit consolidated revenue growth. Our global scale and the breadth and depth of our diverse portfolio positions us as a true end-to-end casino solutions provider, allowing us to capitalise on growth opportunities across land-based, social and iGaming channels. To that end, I'm also pleased to highlight that our growth has propelled us into the ASX 100 in Australia, as we continue to be one of the fastest growing companies with further prospects to growth on the horizon. And now I'm on to our operational highlights. In gaming, we continue to see strong momentum in our flocks business, executing to our commercial strategies. Our operator partners recognised the value in our diverse cabinet and franchise lineups, along with our robust roadmap, and that translated into results we have posted throughout this year. Our North American premium install base has grown for 17 consecutive quarters and holding steady at approximately 50% of our total North American install base as of the end of the quarter. We were able to convert approximately 25% of the footprint associated with approximately 2,200 Dragon Train units were impacted by the preliminary injunction on the floor with gains from our deep portfolio of evergreen franchises additionally we added 600 incremental units to the install base compared to the prior quarter this is a testament to the value proposition our cabinets and games offer and we will continue to work diligently to ensure the longevity and sustainability of our products revenue per day in north america remains strong at over 49 maintaining the step up you've seen as our game performance trended positively over the last two years through continued investment and optimisation of our R&D engine. Game sales continues to fire on all cylinders, both domestically and internationally, on record global shipments of over 13,000 units. I would also like to note that Light & Wonder held the number one ship share in North America in the second quarter, a segment that Dragon Train is not commercialised in in any way. This performance is reflective of the power of our brand and portfolio. as well as our effective commercialisation strategy. As we continue to expand our presence in adjacent markets, we recently announced our entry into the Manitoba VLT market. We expect our momentum to continue as we further proliferate in the adjacent and international markets with the strong for sale product line-up that we have on offer. Our strategy is simple, and that is to build and extend our suite of brands and franchises with engaging game mechanics that players enjoy. Many of the legacy plans you see, such as Dancing Drums, Ultimate Firelink, Invaders from Planet Moolah, Blazing 777, and Quick Hits, are just some of the staples you see on slot floors, and they continue to rank atop the performance chart. Most recently, you saw us bring the number one core title, Huff and Even More Puff, over to a leased model under the Money Mansion extension, and initial performance is phenomenal, debuting as the number one top-indexing new premium leased WAP games. With that, we're also introducing a Huff & Puff hard hat edition, which we plan to offer on the highly successful Gillspring cabinet. Additionally, the in-demand Cosmic cabinet is also recognised as one of the most sought after in the industry, and we've followed up with a Cosmic Upright, which will be supported by our array of player favourite franchises. Importantly, our continued improvement in R&D strategy has enhanced the hit rate of our games dramatically, and the robust product roadmap we have laid out ensures sustainability and optimal value with light and wonders offerings. We are still in the very early inning and just starting to see the fruits of our investment over the past couple of years, and I'm excited for what's to come in the future. Our customer-centric focus is also bringing significant commitments and reinvestment back into the systems business. Year-to-date, we've secured 10 deals with our most recent announcement highlighted by a suite of enhanced capabilities adopted by our operator partners to complement their existing CMS. These wins show an increased level of confidence in Light and Wonder as a provider and our ability to deliver products that play a meaningful role for customers. As a matter of fact, you are seeing us bring the same approach to electronic table games with continued innovation on our Obsidian products as we roll out Auto Roulette and the Hybrid Stadium format. We are also reinforcing our leadership positions in both shufflers and tables with a focus on building our recurring revenue vault programs. where customers can enjoy our portfolio of engaging table games IP. My personal favourite is the Double Down Madness Blackjack, an exciting twist on the traditional game which was recently launched. To sum it up, I'm very excited with the progress and outlook in our gaming business, and the consistent execution on our diverse portfolio gives me confidence it will drive sustainable growth in the gaming business over the long term. Turning to SidePlay, where we continue to be a growth leader in social casino underpinned by our array of land-based franchises and cross-platform strategies. This quarter proves to be the same with our continued execution on our strategy, as we delivered record monetisation metrics. Growth was evident again across our four largest games, with quick-hit slots and 88 fortunes both once again achieving record revenues. Last quarter we highlighted opportunities for incremental marketing spend, and that's reflected in what we've seen with engagement from new players as we build out new cohorts. Our team is one of the best in the industry in deploying the right amount of user acquisition resources to optimise returns, with a focus on engagement and monetisation to extend player lifetime value. In fact, you continue to see healthy year-over-year growth across average revenue per daily active user and average monthly revenue per paying user, both key metrics driving the outsized growth you have seen over the last two years. Prudent game feature and player management is essential, and we've managed these aspects well, staying nimble to changes and trends. We are adaptable to user preferences with real-time updates focused on delivering the best gaming experience to players. Data analytics is our strength, and we will continue to cross-pollinate across Sideplay's portfolio of games through our proprietary algorithm. With regards to direct-to-consumer platform, I'm pleased to say that we continue to progress steadily in the direction we had planned for, As previously mentioned, this is a phase release, which will continuously assess the repeat player engagement with broader rollout expected over the long term. Overall, the confidence is high in our ability to optimise the SidePlay engine. In addition to executing to our core competencies, we will also look to introduce and scale new games that are accretive and complementary to the portfolio for sustainable growth. On to iGaming, a segment we continue to cultivate with the expansion of our game content and services portfolios. and where we took the number one US slot GGR share in the quarter on the back of our franchises. While we expect future market opportunities, we understand that execution on our product roadmap is key, and that is done by leveraging our vast library of land-based and digital native content, as well as by scaling our aggregation platform to our advantage. I would note that comparisons were impacted by certain termination fees that benefited prior year quarter. Overall, industry growth was strong in North America on record GGR levels, and we capitalised on the opportunity with several key game launches, including Thundering Blade and Rips Little Hands. We also launched World of Wonka Pure Imagination, the second game in the series with FanDuel by the PlayZero platform, following outstanding performance from the initial Wonka release in the first quarter. Looking at the content spectrum broadly, our digital-native studios continue to benefit from new game launches and the scale of our platform with Lightning Box GGR up 38% year-over-year. Elk Studio once again capitalised on the successful Pirates franchise with its best-ever release, Pirates 3, which led to 30% GGR growth compared to the prior year period. With the expansion of our portfolio in game services capabilities, we aspire to be more than just a leading slot content provider in the R gaming space. Additionally, we also introduced our first cross-platform marketing Jackbox product, super carnitite with Lotto Quebec. We are well positioned with our leading products and services to capitalise on this rapidly growing sector, and we will continue to innovate to position ourselves for future success and growth. As we close out the year, I would like to express my sincerest gratitude to our commercial team and operator partners for their unwavering support over the past few months. We are very fortunate to have a dedicated team focused on solving problems at hand and long-lasting meaningful partnerships we have built with our customers over the past several years. I'm confident that we will grow together moving forward, stronger than ever as a team. Looking forward, the outlook remains promising. Our global presence and suite of products gives us confidence in our ability to navigate challenges while continuing to grow and innovate. Most importantly, we have the right group of people to execute on the collective vision to grow the business sustainably, one step at a time through our strategy and product roadmap. Above all, we will continue to invest in talent to drive future growth. We are truly just scratching the surface of our potential, and I'm excited for what's to come. With that, I'll hand it over to Oliver to review the quarterly financials.