Revenue from continuing operations for the three months to 31 March 2022 amounted to $572m (£464m/€543m), up from $453m in the corresponding period last year. These continuing operations do not include the supplier’s lottery or sports betting operations, both of which it agreed to sell, even though these segments were still part of the business when the quarter ended.
Services revenue accounted for $431m of this total, an increase of 18.4% on last year, while product sales revenue increased more rapidly, by 58.4% year-on-year.
Breaking this down by segment performance, gaming generated $355m in revenue, up 45.5%. Light and Wonder said this was primarily driven by continued market recovery after the pandemic, with record premium installed base units in in North America, elevated average daily revenue per unit, and growth in game sales, systems and table games.
Revenue from the SciPlay social gaming segment was up 4.6% to $158m, the second highest quarter in its history, This was helped by a 7% increase in average monthly paying users due to a higher payer conversion rate during the period.
In addition, igaming revenue during the quarter was 1.7% higher at $59m. This growth was put down to due to continuing momentum in the US market, where revenue was up 63.0% year-on-year, coupled with the strong performance of acquired businesses in the second half of 2021.
Turning to costs, total operating expenses were 18.5% higher at $532m, with spending higher across all areas of the business. However, such was the impact of revenue growth that operating profit increased by 900.0% to $40m.
Light and Wonder noted $104m in other costs, primarily interest expenses, which left a pre-tax loss of $64m, lower than the $85m loss posted at the same point last year.
The group paid $3m in income tax, resulting in a net loss from continuing operations of $67m, an improvement on the loss of $88m in 2021.
However, when accounting for $95m in net profit from discontinued operations – namely the lottery and sports betting businesses – and a $2m net loss from a non-controlling interest, this left a total net profit of $26m, compared to a $15m loss last year.
In addition, Light and Wonder said that adjusted earnings before interest, tax, depreciation and amortisation (EBTIDA) from continuing operations was 42.3% higher at $202m.
Reflecting on this Q1 performance, Light and Wonder chief executive Barry Cottle also noted a series of major events, including the $5.8bn sale of its lottery business to private equity company Brookfield Business Partners shortly after the end of the quarter.
Also in the weeks following Q1, the group completed its name change to Light and Wonder, announced a long-term extension of an agreement with Entain and secured a licence to launch in Ontario.
“We kicked off 2022 with a number of significant achievements and strong momentum across our businesses with strong revenue growth of 26% in the quarter,” Cottle said. “We are delivering on our promises to create great content cross-platform while expanding in high-growth digital markets and enabling a seamless player experience.
“With a reconstituted balance sheet, sustainable double-digit growth and strong cash generation, we now have the ability to significantly enhance shareholder value through a disciplined approach to capital allocation.”
Meanwhile, Light and Wonder announced the acquisition of Playzido, a content creation platform provider and game supplier.
Financial terms of the deal were not disclosed, but Light and Wonder said the acquisition will accelerate the pace at which it can partner with game studios and operators across the world to co-create new and exclusive content for players.
Light and Wonder also said the deal will provide a faster route to market for creative studios that do not own their own development platform, with the ability to use Playzido’s technology to develop new content and take advantage of its OpenGaming aggregation platform to distribute games.
Playzido launched in 2018 under the leadership of Paddy Power Betfair alumni Stuart Banks.
“The Playzido deal is a perfect example of an acquisition that dovetails with our global strategy, demonstrating yet again our commitment to make targeted value-enhancing investments designed to advance our cross-platform content capabilities,” Light & Wonder’s chief executive for igaming Dylan Slaney said.
“Playzido’s platform is one of the best in the industry and we are delighted to be able to harness that technology to help studios and operators globally to develop and distribute game content that will continue to resonate with players.”
Playzido’s Banks added “This deal is testament to the drive and dedication of our team, who have been committed to building a fantastic games platform that allows independent studios and operators to bring their creativity and innovation to the global gaming market.
“It is the perfect moment to become part of the Light & Wonder family, with the distribution power of OpenGaming, and their regulatory expertise, we can look to accelerate quickly by bringing on board more studios than ever before.
“The synergies behind the acquisition are clear and we will now turn our attention to extending our reach across markets across the world.”
