Light & Wonder, Inc. Reports First Quarter 2026 Results

Delivered Growth, Margin Expansion⁽¹⁾, and Quality of Earnings with Net Income of $52 Million and Consolidated AEBITDA⁽²⁾ of $327 Million

Gaming Operations North American Premium Units Base Grew for 23^rd Consecutive Quarter, Adding over 2,550 Premium Units⁽³⁾ Year-over-Year, and 660 Grover Units Added Sequentially

Generated Cash Flows from Operating Activities of $139 Million and Adjusted Free Cash Flow⁽²⁾ of $207 Million

LAS VEGAS–(BUSINESS WIRE)–Light & Wonder, Inc. (ASX: LNW) (“Light & Wonder,” “L&W,” “we” or the “Company”) today reported results for the first quarter ended March 31, 2026.

Light & Wonder delivered a solid start to 2026 underpinned by its highly diversified business model, continued disciplined execution across all three businesses and strong cash flow generation, while demonstrating resilience against a backdrop of macroeconomic and geopolitical uncertainty, including tariff-related pressures. Consolidated revenue grew 2% year-over-year to $790 million, against a strong prior year period. We continue to execute against our commitment to deliver enhanced quality of earnings through recurring revenue⁽⁴⁾, with Gaming operations and iGaming as the primary growth drivers during the quarter, each delivering double-digit year-over-year revenue increases. This was further underpinned by continued operational momentum and content strength. Net income was $52 million or $0.66 per share⁽⁵⁾, down 37% and 30% year-over-year, respectively, reflecting approximately $50 million in legal reserve contingencies associated with certain legacy legal matters, which impacted year-over-year net income and net income per share⁽⁵⁾ growth by approximately 61% and 67%, respectively. Net cash provided by operating activities was $139 million, a 25% decrease compared to the same period in 2025, primarily reflecting the payment of legal matter settlements in the quarter.

The first quarter demonstrated broad-based strength, with all three businesses delivering another quarter of segment AEBITDA growth and AEBITDA margin (“margins” or “margin”) expansion. Consolidated AEBITDA⁽²⁾ grew 5% to $327 million, and Adjusted NPATA⁽²⁾ was $115 million, resulting in 7% growth on a per share basis⁽²⁾⁽⁵⁾ to $1.45 as compared to the prior year period. Adjusted Free cash flow⁽²⁾ was $207 million, an 86% increase year-over-year, reflecting strong underlying cash generation across the business.

Gaming revenue increased 3% year-over-year to $512 million, driven by Gaming operations revenue, which increased 38% to $239 million and Table Products, which increased 24% to $63 million. Gaming machine sales revenue decreased 25%, primarily reflecting the timing of international and North America Video Lottery Terminal (“VLT”) shipments in the prior year period, while average selling price per unit remained resilient at around $19,700.

North American Gaming operations premium installed base grew for the 23^rd consecutive quarter adding 650 units sequentially (over 2,550 on a year-over-year basis), and Grover charitable gaming (“Grover”) expanded its footprint by 660 units on a sequential basis, boosted by entry into the recently legalized Indiana market. In North America, we also shipped over 5,000 North American units this quarter.

iGaming once again delivered quarterly double-digit growth in revenue of 18% and AEBITDA of 22% on continuing U.S. momentum underpinned by first-party content proliferation and partner network growth. While SciPlay revenues remain challenged amid a mature social casino market, the business continued to grow both its direct-to-consumer (“DTC”) revenue and active users on a sequential basis.

Matt Wilson, President and Chief Executive Officer of Light & Wonder, said, “The first quarter of 2026 marks the beginning of the next phase of the Company’s growth trajectory: one defined by our content-centric operating model, deepening customer relationships, disciplined execution, expanding margins and enhanced capital structure. We are seeing the benefits of our continued investment in studios and content, as our franchises drive strong game performance across the portfolio. Gaming momentum remained robust, with our North American premium installed base growing for the 23^rd consecutive quarter, and Grover continued its expansion into the recently legalized Indiana market. iGaming delivered another double-digit growth quarter in both revenue and AEBITDA, while SciPlay continued to expand its DTC revenue. Looking ahead, we remain focused on investing in product innovation and talent to further strengthen our recurring revenue model⁽¹⁾ and enhance our global competitive position as we progress toward our 2028 financial targets⁽²⁾.”

Oliver Chow, Chief Financial Officer of Light & Wonder, said, “Our first quarter results reflect continued margin expansion across the businesses and scaling cash flow, driving the improving cash conversion profile of our business, while we make deliberate investments in AI and infrastructure that we believe will compound meaningfully over time to support both growth and efficiency. Our capital allocation priorities remain disciplined and unchanged: investing in high-return growth opportunities, managing our net debt leverage ratio⁽³⁾ toward the lower end of our targeted range⁽²⁾ and returning capital to shareholders meaningfully, having now repurchased 25% of total shares outstanding since the program’s inception⁽⁴⁾. We maintained our net debt leverage ratio⁽³⁾ within our targeted range⁽²⁾ and expect to deleverage throughout 2026, supported by strong underlying business performance. Importantly, we remain committed to reducing our net debt leverage ratio⁽²⁾ to below 3.0x during the first half of 2027, with the intention to accelerate share repurchases in the second quarter, creating sustainable long-term shareholder value.”

LEVERAGE, CAPITAL ALLOCATION AND BUSINESS UPDATE

• Principal face value of debt outstanding⁽⁵⁾ was $5.2 billion, translating to a net debt leverage ratio⁽³⁾ of 3.5x as of March 31, 2026 or combined net debt leverage ratio⁽³⁾ of 3.4x, remaining within our targeted net debt leverage ratio⁽²⁾ range of 2.5x to 3.5x. Period end net debt leverage includes $137 million in litigation settlement payments.
• Repriced our Term Loan B in January 2026, reducing the applicable margin and resulting in a decrease in annualized interest costs of approximately $5 million.
• Returned $22 million of capital to shareholders through the repurchase of approximately 0.2 million CHESS Depositary Interests (“CDIs”) during the quarter. Since initiation of the prior share repurchase program in March of 2022, the Company has returned $1.9 billion to shareholders through the repurchase of 24.6 million shares or CDIs. This represents 25% of total outstanding shares prior to the commencement of the programs⁽⁴⁾.
  
  With approximately 79% of the authorized share repurchase program now utilized, we have remaining capacity of $314 million. We retain a flexible capital structure, which enables us to deploy balance sheet capacity when appropriate. Subject to the continuation of share repurchases⁽⁴⁾, we are committed to deleveraging our balance sheet towards the mid-point of our targeted net debt leverage ratio range⁽²⁾ over the course of FY 2026 and below 3.0x during the first half of 2027.

LEVERAGE, CAPITAL ALLOCATION AND BUSINESS UPDATE (Continued)

• FY 2026 Financial outlook update: We expect a similar shape of earnings momentum to FY 2025, weighted towards the second half of the year and reflective of our growing recurring revenue base⁽¹⁾, the timing of investments and the timing of capital expenditures of our customer base. Full-year Consolidated AEBITDA⁽²⁾ growth is expected to be in the mid- to high-single digits⁽³⁾, as we continue to execute against our long-term strategy and 2028 financial targets⁽³⁾. This outlook incorporates the impact of ongoing macroeconomic and geopolitical uncertainty, including tariff-related cost pressures and the pending increase in U.K. iGaming gambling duties.

SUMMARY RESULTS

First Quarter 2026 Financial Highlights

• First quarter consolidated revenue increased to $790 million as compared to $774 million, a 2% increase versus the prior year period. Gaming revenue grew 3%, benefiting from increases in Gaming operations and a $43 million contribution from Grover, while Table Products revenue grew 24% to $63 million. Gaming machine sales decreased 25% to $156 million, as the prior year period benefited from the timing of international and North America VLT shipments, while Gaming Systems revenue declined by 14% to $54 million, primarily due to lower hardware sales.
  
  iGaming once again delivered double digit quarterly revenue growth, increasing 18% compared to the prior year period. SciPlay revenues decreased 7%, reflecting continued JACKPOT PARTY^® Casino softness, despite resilient player monetization. DTC revenues expanded to 27% of total SciPlay revenue.
• Net income was $52 million as compared to $82 million, a 37% decrease from the prior year period, primarily reflecting approximately $50 million in legal reserve contingencies associated with certain legacy legal matters. Underlying operational performance remained strong, with consolidated revenue growth and AEBITDA margin expansion across all three businesses. These gains were more than offset by the legal reserve contingencies noted above and higher interest expense, reflecting incremental borrowings associated with the Grover acquisition. Net income per share⁽¹⁾ was $0.66, compared to $0.94 in the prior year period, a 30% decrease year-over-year. The legal reserve contingencies charge of $50 million impacted net income and net income per share⁽¹⁾ year-over-year growth by approximately 61% and 67%, respectively.
• Consolidated AEBITDA⁽²⁾ was $327 million, compared to $311 million in the prior year period, a 5% increase driven by growth across all businesses, inclusive of strong segment AEBITDA margin expansion and contributions from Grover.
• Adjusted NPATA⁽²⁾ was $115 million, as compared to $117 million in the prior year period, benefiting from revenue growth and expanded margins across all businesses, offset by higher interest expense, depreciation and amortization. Adjusted NPATA per share (EPSa)⁽¹⁾⁽²⁾ increased 7% to $1.45, compared to $1.35 in the prior year period.
• Net cash provided by operating activities was $139 million, compared to $185 million in the prior year period, primarily impacted by litigation settlement payments of $137 million⁽³⁾.
• Adjusted Free cash flow⁽²⁾ was $207 million, compared to $111 million in the prior year period, an 86% increase reflecting strong underlying earnings generation, the timing of receivable collections and lower income tax payments. Acknowledging some timing of working capital benefits, the strength of Adjusted Free cash flow⁽²⁾ underscores the Company’s scaling cash conversion profile over time.

First Quarter 2026 Business Segments Key Highlights

• Gaming revenue was $512 million, up 3% compared to the prior year period. Gaming operations grew $66 million, or 38%, benefiting from an increase in our North American installed base of 1,805 units⁽¹⁾, up 5% year-over-year to 36,306 units⁽¹⁾. Our North American premium installed base grew for the 23^rd consecutive quarter, and now represents 56% of our total North American installed base mix⁽¹⁾, with a unit increase of over 2,550 units on a year-over-year basis or 650 units on a sequential basis. Our diversified portfolio of successful game franchises and the continued proliferation of our COSMIC^®, COSMIC UPRIGHT, LIGHTWAVE^® and HORIZON^® cabinets continued to drive growth and strong performance. The increase in Gaming revenue also benefited from Table Products revenue increasing 24%, while Gaming machine sales revenue decreased by 25%, reflecting the timing of international and North America VLT shipments in the prior year period, and Gaming Systems revenue decreased by 14%, primarily due to lower hardware sales.
  
  Grover contributed $43 million to Gaming operations revenue, driven by a sequential increase of 660 units. At period end, Grover had over 12,200 installed base units.
  
  Gaming AEBITDA was $271 million, up 7% compared to the prior year period due to revenue growth and favorable revenue mix, leading to margin expansion of 200 basis points, inclusive of Grover contributions.
• SciPlay revenue was $187 million, a 7% decrease compared to the prior year period. This was driven by a decline in average monthly JACKPOT PARTY^® Casino payers, partially offset by an increase in average monthly revenue per paying user. Daily Active Users, or DAU, remained relatively flat sequentially, while monetization remains a key focus, as AMRPPU⁽²⁾ grew 8% year-over-year to $126.30.
  
  AEBITDA increased 3% to $66 million, and AEBITDA margin increased by 300 basis points, primarily driven by our growing DTC platform, a key building block in SciPlay’s margin enhancement initiatives. DTC contributed $50 million, or 27%, of the total SciPlay revenue for the quarter.
• iGaming revenue increased 18% to $91 million, and AEBITDA increased 22% to $33 million, with AEBITDA margin expanding around 100 basis points to 36%. This marks another consecutive quarter of double-digit growth in both revenue and AEBITDA driven by continued momentum in North America underpinned by first-party content proliferation and the expansion of our partner network. Wagers processed through our iGaming platform reached a quarterly record of $29.9 billion.
• Capital expenditures were $74 million in the first quarter of 2026, compared to $61 million in the prior year period, primarily due to investments made to support Gaming operations growth, including Grover.

Earnings Conference Call

As previously announced, Light & Wonder executive leadership will host a conference call on Wednesday, May 6, 2026 at 7:00 p.m. EDT (Thursday, May 7, 2026 at 9:00 a.m. AEST) to review the Company’s first quarter results.

To access the call live via a listen-only webcast and presentation, please visit explore.investors.lnw.com and click on the webcast link under the Events and Presentations section.

To access the call by telephone, please register for a unique PIN at Light & Wonder earnings call and dial: +1 (844) 543-0451 for U.S., +61 1800 491 687 for Australia or +1 (864) 991-4103 for International. A replay of the webcast will be archived in the Investors section on www.lnw.com.

About Light & Wonder

Light & Wonder, Inc. is a leading cross-platform global games company. Through our three unique, yet highly complementary business segments, we deliver unforgettable experiences by combining the exceptional talents of our 6,500+ member team, with a deep understanding of our customers and players. We create immersive content that forges lasting connections with players, wherever they choose to engage. At Light & Wonder, it’s all about the games. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices. To learn more visit www.lnw.com.

You can access our filings with the Securities Exchange Commission (“SEC”) through the SEC website at www.sec.gov, with the Australian Securities Exchange (“ASX”) through the ASX website at www.asx.com.au or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at explore.investors.lnw.com, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure. We also release material information to the ASX in compliance with the ASX Listing Rules.

The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document, and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.

All ® notices signify marks registered in the United States. © 2026 Light & Wonder, Inc. All Rights Reserved.

Forward-Looking Statements

In this press release, Light & Wonder makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. These statements are based upon current Company management (“Management”) expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things:

• our inability to successfully execute our strategy;
• slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
• risks relating to foreign operations, including anti-corruption laws, fluctuations in currency rates, restrictions on the payment of dividends from earnings, restrictions on the import of products and financial instability;
• difficulty predicting what impact new or increased tariffs imposed by and other trade actions taken by the U.S. and foreign jurisdictions could have on our business;
• U.S. and international economic and industry conditions, including changes in consumer sentiment and discretionary spending, increases in benchmark interest rates and the effects of inflation;
• public perception of our response to environmental, social and governance (or “ESG”) issues;
• the effects of health epidemics, contagious disease outbreaks and public perception thereof;
• changes in, progress under, or the elimination of our share repurchase program;
• level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
• inability to further reduce or refinance our indebtedness;
• restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
• competition;
• inability to win, retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
• risks and uncertainties of ongoing changes in U.K. gaming legislation, including any new or revised licensing and taxation regimes, responsible gambling requirements and/or sanctions on unlicensed providers;
• inability to adapt to, and offer products that keep pace with, evolving technology, including any failure of our investment of significant resources in our R&D efforts;
• failure of our investments in artificial intelligence and infrastructure to achieve some or all of their intended

Contacts

Investor Relations
Rohan Gallagher

EVP, Global Chief Corporate Affairs Officer

[email protected]

Media Relations
Andy Fouché

VP, Corporate Affairs and Communications

[email protected]

Read full story here