Light & Wonder, Inc.

Welcome to the Light and Wonder 2025 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 during the Q&A session, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star then two. And should you need operator assistance at any point during the call today, you can press star then zero. Thank you. I will now turn the call over to Nick Zingari, Senior Vice President, Investor Relations and Treasury. Please go ahead.

Thank you, operator, and welcome everyone to our first quarter 2025 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 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. With that, I will now turn the call over to Matt.

Thanks, Nick, and thank you all for joining us today to discuss our first quarter results. Our focus on a comprehensive product roadmap, operational excellence, and cross-platform strategy has enabled us to return to double digit consolidated EBITDA growth, pacing us towards our year end target. I would like to recognise our team for their performance and relentless efforts to execute toward our financial and operational goals. As we outlined in the previous earnings call, growth in 2025 is expected to progress and way towards the second half of the year, based on our visibility into the game sales funnel. We are focused on what we can control and the teams are working diligently to adapt to the rapid shifts in the broader economic environment. Importantly, our game performance is reflected in industry charts and supported by our customers, showing we are on the right path. With uncertainty in the current markets, we will stay the course to reinvest into R&D for sustainable growth in the future. While this industry has proven to be resilient time after time, we are not immune to ripple effects from operators and the end consumers should we see a long-term structural shift in policies resulting in a softer macroeconomic environment. However, I remain optimistic about the future of the gaming industry and our position to capitalize on the opportunities with our product portfolio, which continues to be a key driver of our performance. Let's turn now to the operational highlights. Our gaming team continues to leverage our product portfolio and content roadmap, driving yet another quarter of growth across all lines of business. During the quarter, we added approximately 500 units sequentially to our North American install base, bringing the number of added machines to over 2,900 units year over year. Our North American gaming operations footprint is now over 34,000 units, with 51% of the fleet as premium. The diversity of our franchise is paying dividends, and the most recent ILS charts reflect this, with Light & Wonder holding 40% of the top 25 new premium and WAP games in the first quarter of 2025. Game sales continues to be a highlight, with over 9,700 global units shipped in the quarter, driven by share gains that we've made since we started on this journey. We exited 2024 as the number one ship share supplier globally and carried that momentum into the first quarter, regaining the number one position in Australia, underpinned by the variety of game franchises we have to offer, such as Shenlong Unleashed and Lightning Gong, as well as Huff and Even More Puff, which debuted as number one in Queensland clubs. In North America, games from proven evergreen franchises such as Superhot, Flaming Pot, Mr. Lee and Mrs. Wong, both ranked in the top five of new core games. and the Cosmic Upright Cabinet, the top performing portrait upright cabinet, are prime examples of great performance during the quarter. This improved game and hardware performance is evidenced through a 400 basis points share gain for North American game sales in 2024, year over year to 24%. Our systems and table business continue to deliver healthy results as a result of a strong portfolio. We expect to drive further innovation through our experience and leadership positions into sustainable growth across these product lines. Since the beginning of the year, our Chief Product Officer, Nathan Drane, has also turbocharged our game launches with a robust roadmap of games coming across cabinets on both the gaming operations and game sales categories globally. We anticipate the pipeline to continue to build upon itself and propel us forward as we execute our strategy for further upside in the gaming business. Onto SidePlay, where we continue the trend of outperformance relative to the broader social casino market year over year for three years and counting. Mobile gaming is a large market and we will continue to find avenues to grow our portfolio sustainably. This quarter was impacted by a late quarter re-acceleration from the Jackpot Party updated game economy highlighted in our previous earnings call. We have seen continued positive signs of player engagement with the new economy in March and feel confident in its growth trajectory as it returns to growth in the second half of the year. Importantly, the significant insight into the performance and information we gathered enables further opportunity to drive efficiency and leverage these learnings across other games. Importantly, we saw growth in other games, as Quick Hits slots was able to achieve its 13th consecutive record revenue with 15 consecutive quarters of growth, while 88 Fortunes also reached three consecutive quarters of record revenues. More broadly, we are focused on the key side-play initiatives, which include user acquisition, monetization, and direct-to-consumer. Regarding UA, our team is committed to staying fluid and maximizing the opportunity when it counts. We continue to scale monetization by leveraging dynamic live ops through the SidePlay engine, with year-over-year growth reflected in average revenue per daily active user and average monthly revenue per paying user metric. We also have exciting updates to share on our DTC platform and how we plan to grow, which we'll further unpack in our upcoming Investor Days. More than a year ago, we introduced DTC to our players and have received very positive feedback since then. We've been cultivating the platform to ensure seamless and optimized customer experience, and we'll continue rolling out this offering in phases and eventually onto our other games in the SidePlay portfolio. Looking forward, our team is committed to the fundamentals of the business and to the long-term sustainable growth. We will continue to focus on high-return, prudent UA spend while improving monetization in the core portfolio title. This growth will be compounded by the methodical scaling of our DTC platform, supporting margin expansion in the business for years to come. Turning to iGaming, where we see continued success in both first-party and third-party content launches, as well as added service capabilities, which further enhance the value proposition of our offering. Additionally, growth was accentuated and evidenced in all markets, led by market GGR increases of 30% and 11% in the US and Canada markets, respectively, year over year. Content creation and cross-platform deployment is core to our strategy. We are building on the momentum in the US, supported by strong new first-party game launches, including Huff & More Puffs and Wizard of Oz Over the Rainbow in the quarter. These are exclusive launches with FanDuel and BetMGM, respectively, and they've set new single-game GGR records for both operators since their release. We expect these games to be more widely distributed as they come off exclusivity shortly. Additionally, Land-based fan favorite Huff & Morpuff achieved record North American GGR volumes across the OGS on its initial 60-day release, a testament to the power of our game portfolio and brand exposure of a tested, proven franchise. We expect the runway for our first-party content to continue to broaden as the overall iGaming market grows and as we expand our presence with the introduction of Elk Games in the fast-growing Ontario market. In terms of our service offerings, we continue to see a proliferation of that business as operators. Recently, we launched marketing jackpots in New Jersey with additional rollout plans. Furthermore, we see validation that our product provides substantial value to customers through securing the player account management and aggregation platform tender for the Finnish lottery. Overall, I'm pleased with the vision, strategy, execution, and leadership Simon Johnson has brought to the business. We've made some important strategic decisions under his leadership that will ultimately bear fruit in the long term. The renewed focus on high return initiatives such as cultivating first party content and leveraging our deep pool of diversified game franchises is expected to drive share gains moving forward. Back in February, we announced the strategic acquisition of Grover Gaming's charitable gaming asset, which is expected to enhance our role as a leading cross-platform global games company by adding another growing regulated market to our portfolio. Licensing approvals are on track and the transaction is anticipated to close by the end of the second quarter. Preliminary integration and planning efforts are proceeding as planned, and we are preparing to bring the team on board. We view this as a strategic growth driver for Light and Wonder. Just recently, the state of Indiana legalized ePool tabs, effective July 1 of this year. This is a welcome tailwind and incremental to our base case assumptions. We're excited about the sizable opportunity and intend to be competitive in the state with our R&D supported games and hardware. You will hear more from us on our integration and growth plans for Grover with the upcoming capital markets update. As it relates to an update on our ongoing litigation, back in early April, we engaged a third-party expert who conducted an audit of hold and spin games released after mid-2021 to determine whether any of those games presented similar issues to those identified with Dragon Train and Jewel of the Dragon. He found no evidence of risk trap math values being used in any of those games. We expanded our review to include hold and spin games released before mid-2021. We have now completed searches of math models for hold and spin games released between 2015 and mid-2021 and found no evidence that aristocrat math values were used in any of those games. In closing, I'm very excited to be hosting our Investor Day in less than two weeks' time, where we use the event as an opportunity to dig into the fundamentals of our business and strategy to help propel our growth in the coming years. We look forward to seeing many of you in New York on the 20th. With that, I'll now turn it over to Oliver for a discussion on our financials.