Light & Wonder, Inc.

mode, a brief question and answer session will follow the formal presentation. If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. I'll now turn the call over to Nick Zangari, Senior Vice President of Investor Relations and Treasury.

Thank you, Operator, and welcome everyone to our fourth quarter and full year 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 fourth quarter and full year results and 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 and earnings presentation located in the investor section of our website. We will also discuss certain combined financial information calculated as the historical results of the company plus the preliminary unaudited historical results of Grover Charitable Gaming for the period stated, as well as run rate financial information. This information is for informational purposes only and does not purport to represent what the company's financial position and results of operations would have been if the transactions had occurred at specified dates or maybe in the future after giving effect to the acquisition. 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.

Thanks, Nick, and hello, everyone. Happy to have you on the call today. 2024 was another year of significant progress here at Light & Wonder, as we once again achieved double-digit consolidated revenue and EBITDA growth year over year, with record revenues and profitability across all three businesses, cementing our commitment to deliver sustainable growth underpinned by our differentiated strategy and product roadmap. In fact, our team and product are stronger and better than ever, as evidenced by our consistent execution and focus on operational excellence, highlighted by growth and share gains across the key segments of our business throughout the year. We will continue to focus on top and bottom line growth without compromising investments for future growth. As we shared last week, we have reached a definitive agreement to acquire Grover Gaming's charitable gaming business for an upfront purchase price of 850 million, equating to a multiple of 7.7 times Grover adjusted EBITDA for 2024 and a 7.1 times multiple based on Grover run rate adjusted EBITDA with the purchase multiple expected to only further be reduced if we achieve the up to $200 million earn out provision in the agreement. Charitable gaming is a form of regulated gaming where a portion of the proceeds are given to charity. This is a compelling market with high barriers to entry providing a formidable competitive advantage while benefiting worthy calls. Grover is one of the leading suppliers in charitable gaming with an attractive financial profile, strong customer relationship, and an appealing growth outlook. We value the enviable economics of our installed-based business and will continue to invest organically and inorganically to further expand the fleet. Grover has an attractive recurring revenue model with a loyal and sticky customer base that is core to our strategies. This will be the newest adjacency where we intend to deploy our robust R&D engine and more broadly distribute our variety of hit franchises and games, along with creating further expected synergy. Grover has over 10,000 store-based units deployed over 1,500 locations in five states. This presents a compelling opportunity to further enhance our cross-platform offering and more broadly diversify our operations with a quality complementary business that will allow us to distribute our proven content across wider customer and player segments, where we are currently not represented in North America. With that, I'd like to turn our attention back to the operational highlights, noting that we executed and delivered on the year-on-year consolidated EBITDA growth guidance we provided last quarter. Gaming continues to deliver exceptional results, demonstrating strong growth from our broad array of franchises and well-rounded gaming portfolios. Throughout the year, we've made significant progress in expanding our install-based footprints. During the quarter, we added more than 850 units in North America on a sequential basis, marking the 18th consecutive quarter of premium installed base growth, which continues to be north of 50% of the total North American installed base. Importantly, we demonstrated the ability to not only preserve the impacted Dragon Train fleet, but also put up strong numbers more broadly and in other segments outside of premium, such as Class 2, among others. In fact, we indexed 11 of the top 25 new premium leased and WAP games in Isla's most recent game performance report. As mentioned in our prior earnings call, North American revenue per day would be impacted in the fourth quarter. However, we are seeing strong performance out of the gate from Huff and even more hard hat, which was deployed on the Cascada deal spring cabinet and is now indexing well above the game it largely replaced on a same store basis in many key markets. This reflects the team's dedication to build great franchise extensions, and we expect to do the same across all of our brands. I'm encouraged and expect gaming operations to return to normalised growth in 2025, underpinned by the robust roadmap we have in place. Another key highlight for the year is the leaps and bounds progress we've made in game sales, with expansion into new adjacencies, including Oregon State and Canadian Video Lottery Terminal, and continued momentum internationally. In North America, we held number one ship share in both the second and third quarters, continuing the momentum in the fourth quarter with year-over-year growth in North American replacement units. In fact, we continue to hold number one position in the fourth quarter, according to ILA's newly released US and Canada Cabinet Sales and Lease Report. Similarly, we continue to maintain the traction we gained in Australia as the number one ship share supplier in 2024, our first here for Light and Wonder, as we continue to broaden our international presence for the wide range of upcoming opportunities. As one of the leading end-to-end gaming solutions provider, we have an equally attractive systems and table products portfolio, which further enhance our offerings to operator partners to serve and optimize casino floors. In addition to our industry-leading casino management systems and hardware, we've also bolstered our software capabilities through innovation and partnerships, which led to over $300 million in systems revenue for the year, a 13% increase year over year. The ability to execute our gaming strategy continues to be a key driver of our success in share games. In fact... The power of our franchises and global scale gives me confidence that we can continue to grow the business sustainably in the near future, given the many opportunities on the horizon. Onto SidePlay, where it was another record-breaking year on several fronts, as the business surpassed $820 million in revenue, underpinned by healthy engagement and monetization. The investment we made in SidePlay is bearing fruit, and the teams are collaborating cohesively on game development and data analytics, leading to several successful game launches across the organization. Our four largest games all delivered record revenues for the year, with Quick Hit and 88 Fortunes continuing that trend in the fourth quarter. Since Light and Wonder's buyout of Syplay in late 2023, our social consent of business has outpaced the broader market, extending its runabout performance over the past two years. During this stretch, we refined the Syplay engine, enhanced the monetization blueprint diligently to align with our growth trajectories. Throughout the course of the year, we've also crafted a viable path to prudently grow our direct-to-consumer platform sustainably. I'm happy to share that we grew DTC to over 13% of revenue in the quarter as we continue to roll out this offering in phases and eventually to the games that don't currently offer the DTC platform. Monetization continues to be a key focus, driving record levels of average revenue per daily active user and average monthly revenue per paying user for the quarter and the year. ArpDAO is trending steadily over $1 as projected, reflecting our shift towards engaging high-quality payers. Importantly, we are committed to maintain the momentum of our flywheel and continue to give the team the opportunity to engage in prudent incremental user acquisition spend, as you will likely see sequentially in the first quarter, where we typically see better returns versus higher acquisition costs around the holidays. SidePlay continues to be a vital piece of our cross-platform strategy as we focus on the pollination of key learning across the businesses. We are constantly evolving the engaging features our platform has to offer. Our team has done a great job of staying nimble and adapted to changing player dynamics. One of our biggest strengths lies with the real-time feedback that we get from our various live ops and metagame deployment to test the viability of these features, which has been a major contributor to our outperformance over the past two years. On rare occasions, the end result of these trials do not meet our internal expectations, as we experienced with Jackpot Party in the quarter. However, the valuable insight that we gained during the process enables us to share these findings across our games to optimize the portfolio. Overall, I'm pleased with the execution of the team and expect to see healthy growth in 2025 as we execute on the different phases of our strategic initiatives. Turning to iGaming, where Light and Wonder's proven OGS content aggregator and the North American market continue to expand and grow to record GGR volumes in the quarter and 2024. Our strategy is simple yet effective, and that is to leverage our experience and aggregation platform to offer content studios and operator partners on our network the ability to scale meaningfully alongside our best-in-class first-party content. In fact, we executed a plan with several key launches and released over 1,000 games on the OGS, surpassing this milestone for the first time in 2024. Most recently, we launched our chart-topping Huff & Morepuff game with FanDuel across North America, our best-ever game release, expanding the omnichannel releases of our prudent franchises as the brand continues to gain momentum and exposure in both the land-based and digital markets. We plan on the continued proliferation of our R&D engine across the digital domain on our content-first strategy, with accelerating releases of first-party content in the future. Lightning Box continues its run with strong launches from the Thundering series and Egg Link, with 35% year-over-year GGR growth in the quarter. We also launched Rainbow Riches Dream Pots, a wide area progressive jackpot game into the UK market as we continue to focus on driving further success of market attuned game content development. Additionally, we expanded our adjacent offering of the first cross platform marketing jackpot product, Super Kenya, which launched in Quebec with Wonder Drops, another new marketing jackpot offering which spans across 21st party content games with Penn in Michigan. Separately, Following a thorough strategic review, we've made the decision to discontinue and divest our live casino business. This reflects our commitment to allocating resources to the most impactful parts of the business, where we have good line of sight to meaningful returns on our investment. While we're still in the relatively early days of investing in the business, we strive to stay nimble as an organisation and are thus focusing on the risk-reward profile of our other businesses, which have better visibility to superior returns relative to live casinos. You may have seen our recent announcement that we've appointed Simon Johnson to lead the iGaming business. His extensive experience as a seasoned gaming executive and most recently as the managing director of our international gaming business offers us a fresh perspective on our iGaming operations and strategies. Simon's familiarity with the fragmented yet growing global gaming market provides us with insights to help devise regionalised plans for both mature and emerging markets. This includes Brazil, where iGaming was recently legalised. As I reflect upon 2024, the R&D investments that we've made were vital to the success and share gains of our business. Importantly, we continue to build our talent pool, adding more designers and expanding our studios as we onboarded key hires in North America and Australia. Our bench strength is a key differentiator as we're able to fill key executive roles from within the company. To that extent, I'd also like to congratulate Nathan Drain on his promotion to Chief Product Officer of Light & Wonder. Nathan is a tremendous asset to the company and a great leader for our critical R&D function. He has a clear and robust content roadmap and will ensure our continued success, positioning us for growth in the near and long term. Additionally, Rich Schneider will move into the role of senior advisor to the business. Rich was instrumental in orchestrating the product roadmap and R&D structure at Light & Wonder during the transformational years, and I'm very excited for us to continue on this growth journey together. Importantly, Nathan's appointment to manage the global product portfolio across all segments will further enhance our cross-platform strategy, enabling continuous integration of our content to drive efficiency and enhancement to the quality of our offerings. Our R&D engine will be further amplified, driving sustainable growth through our businesses, including charitable gaming, generating outsized returns on our investments. In summary, our execution and performance last year gives me great confidence in achieving our targets. I want to thank our team, the board and our shareholders for their unwavering support as we kick off 2025. We are fortunate to have a very supportive shareholder base that embraces our vision as a global games company. As we approach the second anniversary of our successful secondary listing on the ASX, with ongoing collaboration with our global shareholders, we are continuing to explore ways to refine our US and Australian capital structure. The company remains focused on enhancing the liquidity and market capitalisation of its ASX listings. And as part of this, we'll be considering a dual primary or a sole listing on the ASX. Accordingly, we've engaged advisors to evaluate potential strategies to achieve this objective, and we'll be seeking feedback from key stakeholders to ensure an optimum outcome for light and wonder shareholders. With that, I'll turn it over to Oliver to go through the financials.