Light & Wonder, Inc.

What they do

The company operates in three reportable segments: Gaming, SciPlay, and iGaming. Gaming supplies game content, gaming machines, casino management systems (CMS), and table game products to licensed gaming entities, including charitable gaming via Grover. SciPlay provides social casino and casual online games to retail customers. iGaming offers digital gaming content, distribution platforms, player account management systems, and other real-money gaming services.

Revenue drivers

• Gaming segment — Largest segment, generating $554 million in Q2 2026 (+5% YoY). Revenue from Gaming operations (recurring, participation and leasing) increased 18% to $247 million, and table products rose 13% to $62 million. Gaming machine sales fell 4% to 8,796 units shipped globally.
• SciPlay segment — Social casino and casual games. In Q2 2026, revenue declined 9% YoY due to a softer social casino free-to-play market and lower average monthly payers, partially offset by higher average monthly revenue per paying user (up 4%). Direct-to-consumer platform represented about 29% of segment revenue.
• iGaming segment — Digital real-money gaming content and services. Q2 2026 revenue and AEBITDA grew 14% and 18% YoY, respectively, driven by strong first-party content uptake and continued double-digit growth.

Recent performance

In Q2 2026, consolidated revenue grew 2% YoY to $828 million. Net income increased 26% to $120 million ($1.53 per share). Consolidated AEBITDA grew 9% to $383 million. Operating cash flow jumped 127% to $241 million, and adjusted free cash flow rose 50% to $156 million. For the six months ended June 30, 2026, revenue rose 2% to $1.617 billion, but net income declined 3% to $172 million.

Strategy

Management's focus is on creating cross-platform game franchises and building recurring revenue streams. The company is expanding its North American premium installed base (24th consecutive quarter of growth) and growing Grover's charitable gaming footprint. Capital allocation includes share repurchases ($134 million in Q2 2026) and debt reduction, targeting net leverage below 3.0x by H1 2027. They aim to maintain a healthy balance sheet and disciplined investment in high-return markets.

Risks

• Replacement cycle slowdown — A decline in the replacement cycle of gaming machines could reduce sales, as seen in Q2 2026 where machine sales fell due to fewer new openings and expansions.
• Social casino market softness — SciPlay revenue declined due to a softer social casino free-to-play market and lower paying users, which could persist.
• Foreign exchange exposure — A portion of revenue and expenses are in British Pounds, Australian Dollars, and Euros, exposing the company to currency fluctuations.
• Economic and geopolitical conditions — Unfavorable economic conditions, inflation, tariffs, or geopolitical events could reduce player discretionary spending and disrupt operations.

Outlook

Management reiterated the full-year 2026 financial outlook, expecting continued momentum in the second half of the year. They anticipate growth in Gaming operations, Grover, and iGaming to drive revenue and margin expansion. The company remains committed to reducing net debt leverage to below 3.0x during H1 2027 and moving toward investment-grade leverage.