Q1 2024 Light & Wonder Inc Earnings Call

Welcome to the light in one or 2024 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. Please press star one on your telephone keypad and I would now turn the call over to Nick.

Operator: Welcome to the Light & Wonder 2024 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, please press star 1 on your telephone keypad. And I will now turn the call over to Nick Zangari, Senior Vice President of Investor Relations.

Nick Zangari: Zangari senior Vice President of Investor Relations.

Nick Zangari: Thank you, operator, and welcome, everyone, to our first quarter 2020 earnings conference call. With me today are Matt Wilson, our president and CEO, and Oliver Chow, our CFO.

Nick Zangari: Thank you operator, and welcome everyone to our first quarter 2024 earnings conference call.

Nick Zangari: With me today are Matt Wilson, our president and CEO and Oliver Zhao our CFO.

Nick Zangari: During today's call, we will discuss our first quarter results and operating performance followed by a question and answer session.

Nick Zangari: During today's call, we will discuss our first quarter results and operating performance, followed by a question and answer session. 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.

Nick Zangari: Today's call will contain forward looking statements may involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call.

Nick Zangari: 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.

Nick Zangari: 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 located in the Investors section of our website. 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.

Nick Zangari: 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 located in the investors section of our website.

Nick Zangari: 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.

Nick Zangari: With that I will now turn the call over to Matt.

Matthew R. Wilson: Thank you, Nick, and thanks to everyone for joining us today. Our first quarter performance marked a great start to 2024 for Light & Wonder, building on the momentum that we've created since we began our transformation journey and affirming our position as the leading cross-platform global games company. During the first quarter, our team did an outstanding job executing our strategy and meeting our financial and operating objectives. Oliver will provide more details in his financial comments, but we are extremely proud to deliver our 12th consecutive quarter of year-over-year growth and our 6th consecutive quarter of double-digit revenue growth across all lines of business.

Matt: Thank you, Nick and thanks to everyone for joining us today.

Matthew R. Wilson: Our first quarter performance marked a great start to 2021 building on the momentum that we've created since we began our transformation journey and is there any acquisition as the leading cross platform Global guidance company during.

Matthew R. Wilson: During the first quarter, our team did an outstanding job executing our strategy and meeting our financial and operating objectives.

All of them will provide more details in his financial comments, we are extremely proud to deliver our 12 consecutive quarter of year over year growth in our sixth consecutive quarter of double digit revenue growth across all lines of business.

Matthew R. Wilson: The gaming industry has proven to be resilient in today's macroeconomic environment, with healthy consumer demand fueling our impressive growth. These strong results confirm that we are investing in all the right places and in the right talent, providing innovative content and cutting-edge technology that enhances the player's experience and builds a loyal customer base. We will continue to execute diligently with a focus on driving sustainable long-term growth. For Light & Wonder, it's all about the game.

Matthew R. Wilson: The gaming industry has proven to be resilient.

Matthew R. Wilson: Macroeconomic environment with healthy consumer demand fueling our impressive growth.

Matthew R. Wilson: This strong result that we are in that.

In all the right places and in the right talent, providing innovative content and cutting edge technology that enhances the experience and build a loyal customer base.

We will continue to execute diligently with a focus on driving sustainable long term growth.

But a lot and one that is all about the guidance.

Matthew R. Wilson: Our aspirations go beyond just one brand or franchise. We are fortunate to have a robust and diversified roadmap boasting engaging and dynamic game content for players to enjoy across all of their favorite channels. With that, let's turn to our operational highlights for each business. In gaming, we continue to make significant progress on our journey, and given the quality of products, we see this year as an inflection point to start scaling our game operations fleet in a meaningful way. As many of you have heard, our Australian-born hit franchise, Dragon Train, has arrived in the U.S. and is expected to contribute to gaming operations growth this year.

Matthew R. Wilson: Our aspirations beyond just one brand no franchise, we are fortunate to have a robust and diversified roadmap engaging and dynamic and content for clients to enjoy across all of their favorite channels.

Matthew R. Wilson: With that let's turn to our operational highlights for each business.

Matthew R. Wilson: In gaming, we continue to make significant progress on our June and given the quality of product in D. C. As an inflection point without dialing a game slate in a meaningful way.

Matthew R. Wilson: In fact, Dragon Train debuted as the top new franchise with four of its titles in the top ten indexing new premium leased games on the Irish report. Our commercial team is collaborating with our operator partners and being strategic with placement as we continue to optimize the floors for performance while preserving the longevity of our existing units. That said, our North American premium install base has grown for 15 consecutive quarters and now represents 49% of the North American install base.

Matthew R. Wilson: As many of you have heard Australian Bowen heat franchise Dragon time has arrived in the U S.

Matthew R. Wilson: Especially to contribute to gaming operations throughout this year.

Matthew R. Wilson: In fact, I can try and debuted as the top new franchise with four of its titles in the top 10 indexing new premium leased games on the August report.

Matthew R. Wilson: Commercial team is collaborating with our operating partners and being strategic with placement as we continue to optimize the floors. The performance while preserving the longevity of axis unit.

Matthew R. Wilson: That said, our North American premium installed base has grown for 15 consecutive quarters and now represents 49% of the North American installed base.

Matthew R. Wilson: Just recently, we also launched our new large-screen jumbo cabinet, Horizon, with Dancing Drums' Ultimate Explosion, and it's off to a strong start. Our execution on life's title is second to none, as Monsters Frankenstein continues to perform well on the charts with more placements on the floor.

Matthew R. Wilson: Just recently, we also launched a new large screen jumbo cabinet horizon.

Nick Zangari: Nancy drums, ultimate explosion and its off to a strong start.

Our execution on lots of title.

Nick Zangari: Second to none as monthly Frankenstein continues to perform well on the charts with more pricing from the pool.

Matthew R. Wilson: We are prudent with life and spend, with a disciplined focus on ROI, and this gives me the confidence that we will capitalise on the upcoming launches, such as Squid Game, in the near future. On to game sales. During the quarter, we shipped close to 9,700 units globally, with broad-based strength across the board, and achieved number one ship share in Australia for the first time ever in the company's history.

We are prudent with locked in Spain, with a disciplined focus on ROI and it gives me the confidence that we will capitalize on the upcoming launches such as squid game in the near future.

Nick Zangari: On the guidance out during the quarter, we shipped close to 9700 units globally with broad based strength across the board and achieved number one ship share in Australia for the first time ever in the company's history.

Matthew R. Wilson: We see opportunities outside of the traditional North American and Australian replacement markets as we further deliver units into international opportunities and adjacencies, such as shipments to Asia, specifically Macau, the Philippines, and South Korea in the quarter. In the adjacent markets, we are progressing well with the Oregon and Canadian VLT shipments, with rolling sales into the Georgia coin-operated amusement machine market as well as various other video lottery, Class 2 and historical horse racing markets.

Nick Zangari: We see opportunities outside of the traditional North American and Australian replacement market as we further delivered units into international opportunities and Adjacencies, such as shipments to Asia, specifically, Macau, Philippines, and South Korea in the quarter.

Matthew R. Wilson: Any adjacent markets, we are progressing well with the Oregon, and Canadian VLT shipments with Rolling thousand Georgia coin operated amusement same market as well as various other video luxury class two and historical Horseracing market.

Matthew R. Wilson: We will continue working towards gaining share in the North American market on the backs of our wide array of successful franchises such as Blazing Triple Sevens, Huff & Moore Pass, Big Hot Flaming Pots, Lion Link, and Goldfish. On to Systems and Tables, a rebound strategy of enhanced collaboration driven by innovation is expected to provide sustainable momentum, further solidifying our leadership position with a focus on increasing recurring revenue streams by expanding system software and maintenance services and table product subscriptions as we continue to be the innovative thought leader in this space.

Matthew R. Wilson: We will continue working towards gaining share in the north American market on the back there's a wide array of successful franchises such as blazing triple seven more.

Nick Zangari: More pass CCAR planning pot line Lincoln Doltish.

Matthew R. Wilson: On the systems entitled a revamped strategy of enhanced collaboration driven by innovation is expected to provide sustainable momentum further solidifying our leadership position with a focus on increasing recurring revenue stream by expanding system software and maintenance services and table products description as we continue to.

The innovative thought later in the site.

Matthew R. Wilson: Overall, we have strong conviction in gaming's growth trajectory as we continue to build on our hardware, brands, and franchise extensions, with recent data showing our hit game Huff & Even More Puff indexing as the number one overall new core game and Light & Wonder occupying 12 out of the top 25 games on the new Premium Leased and Wide Area Progressive chart. We are well positioned to capture the opportunities ahead of us.

Nick Zangari: Overall, we have strong conviction in gaming growth trajectory as we continue to build on our hardware brand and franchise extension.

Matthew R. Wilson: With recent data showing a hit game have been even more top indexing as the number one overall neutral game and lot and wanted to occupy 12 out of the top 25 game on the new premium late in wide area Progressive Chop, we are well positioned to capture the opportunities ahead of us.

Matthew R. Wilson: Joining the Cyclades, where our steady-out performance continues as we deliver another record revenue quarter, up 11% year-over-year, driven by continued growth in our largest four games: Jackpot Party, Quick Hit Slots, Goldfish Casino, and 88 Fortune Slots.

Nick Zangari: Turning to slide five we are steady outperformance continued as we delivered another record revenue quarter up 11% year over year, driven by continued growth in our largest ball games.

Matthew R. Wilson: Jackpot Party quick hit slots gold fish casino and Adi's fortunes slot.

Matthew R. Wilson: We continue to gain share in a stabilizing social casino market, as we have for the last nine quarters, and are now at over 11% market share. The investments we've made in our Cycler engine and user acquisition are bearing fruit, and the results are reflected in the strength of our portfolio of gains. Meanwhile, average monthly revenue per paying user and average revenue per daily active user once again reach new heights as we continue to execute on our prudent and sustainable monetisation strategy, one that has proven to work very well as we navigate seasonality in the business with favorable results.

Nick Zangari: We continue to gain share in a stabilizing social casino market as we have for the last nine quarters and are now over 11% market share.

Nick Zangari: The investments we've made in our slot play engine and user acquisition are bearing fruit and the results are reflected in the strength of that portfolio of guidance.

Nick Zangari: Meanwhile, average monthly revenue per paying user and average revenue per daily active user once again reached new heights, as we continue to execute on our prudent and sustainable monetization strategy.

Nick Zangari: And that has proven to work very well as we navigate seasonality in the business with favorable results.

Matthew R. Wilson: The marketing campaigns launched in the quarter solidify our conviction of investing in opportunities that are expected to generate attractive payback periods that fuel sustainable long-term engagement and monetisation. SciPy is the best in the industry in terms of user acquisition execution, which we've demonstrated consistently in our performance.

Nick Zangari: The marketing campaign launched in the quarter solidify our conviction of investing in opportunities, which are expected to generate attractive payback period that feels sustainable long term engagement and monetization.

Nick Zangari: <unk> is the best in the industry in terms of user acquisition execution, which we've demonstrated consistently in our performance.

Matthew R. Wilson: In addition to executing on our marketing blueprint, some of our other growth initiatives include testing and scaling a new game and taking learnings to drive success for next phase progression into AdSec. Most importantly, we've made meaningful progress on our direct-to-consumer platform in the last six months, with approximately 6% of revenues generated from this channel in the first quarter. Our focus here is to proceed deliberately, ensuring a high-quality user experience to encourage player engagement.

Nick Zangari: In addition to executing to our marketing blueprint.

Nick Zangari: The other growth initiatives include testing and scaling of new game and taking learnings to drive success for the next phase progression into ASIC.

Nick Zangari: Most importantly, we've made meaningful progress on our direct to consumer platform in the last six months with approximately 6% of revenues generated from this channel in the first quarter.

Nick Zangari: Our focus here is to proceed deliberately ensuring a high quality user experience to encourage player engagement.

Matthew R. Wilson: Overall, we see this as a great long-term opportunity as we continue to refine the platform and scale it across our game. With SightSight's clear strategy and focus on road map execution, we are differentiating ourselves as one of the clear leaders in the space.

Matthew R. Wilson: Overall, we see this as a great long term opportunity as we continue to refine the platform and scale it across our game.

Nick Zangari: We thought by a clear strategy and focus on roadmap execution, we are differentiating ourselves as one of the clear latest insight.

Nick Zangari: Onto our gaming with a robust industry growth, we saw in North America propelled us to another record revenue quarter.

Matthew R. Wilson: On to iGaming, where the robust industry growth we saw in North America propelled us to another record revenue quarter. Our OGS platform delivered record gross gaming revenue volumes in the US and Canada, as we saw year-over-year increases of 23% and 29%, respectively. This impressive product was further accentuated by our content strategy and roadmap. In fact, we continue to see stellar performance from our first-party content, with Ultimate Firelink Cache Balls reflecting solid performance, continuing the success we've seen with our proven land-based franchise.

Matthew R. Wilson: Our Rcs platform delivered record gross gaming revenue volumes in the U S and Canada as we saw year over year increases of 23% and 29% respectively.

Matthew R. Wilson: This impressive growth was further accentuated with our content strategy and roadmap.

Nick Zangari: In fact, we continue to see stellar performance from our first party content with ultimate filing capsules, reflecting solid performance.

Nick Zangari: Continuing the success, we're staying with our proven land based franchise.

Nick Zangari: Elk, Cdos and lining books continue to perform above expectations.

Matthew R. Wilson: Elk Studios and Lightningbox continue to perform above expectations, a testament to our OGS platform providing valuable insights into their game data prior to Light & Wonder's acquisition of these high-performance studios. Elk Studios' GGR is up 34% compared to the prior year, driven by strong performance across Pyrox 2 and Cygnus 4. Lightning Box had a record GGR quarter with sequential growth of 12% supported by strong launches from the Thundering series. Playzito has also begun to scale, with 9 studios now live, connected to 72 operators across 10 markets, as we continue to build on the accessibility and scalability of our iGaming network.

Nick Zangari: A testament to our Rgs platform, providing valuable insights to their game data prior to a lot more on that the acquisition of these high performing studios.

Nick Zangari: <unk> is up 34% compared to prior year, driven by strong performance across pilots to and Cigna for broadening both had a record quarter with sequential growth of 12% supported by strong launches from the standard to do.

Nick Zangari: <unk> has also begun to scale with nine studios now lot connected to 72 operated across 10 markets as we continue to build on the accessibility and scalability of our I gaming network.

Oliver Chow: LiveCasino continues to be an important part of our overall iGames portfolio, as we continue to invest and optimize our offers. We continue to see progress and believe that our collaboration with operated customers will ultimately solidify long-term partnerships as we scale and expand into other regions in the future. iGaming is one of the fastest growing segments in the gaming space, as we continue to see within the US market in the quarter. We will continue to expand our content portfolio and cross-launch our proven land-based and digital native games, along with enhanced capability and new features added to our existing offering, rounding out our robust iGaming portfolio to capitalise on legalization opportunities in the future.

Nick Zangari: <unk> continues to be an important part of our overall <unk> portfolio.

Nick Zangari: As we continue to invest and optimize our offering.

Oliver Chow: We continue to see progress and believe that our collaboration with operator customers, who ultimately solidify long term partnership as we scale and expand into other regions in the future.

Nick Zangari: <unk> is one of the fastest growing segments in the gaming space as.

Nick Zangari: As we continue to stay within the U S market in the quarter.

Nick Zangari: We will continue to expand our content portfolio and cross launched our proven land based and digital native games, along with enhanced capability and new features added to our existing offering.

Nick Zangari: Rounding out our robust portfolio to capitalize on legalization opportunities in the future.

Nick Zangari: Without unmatched market position and cross platform capability.

Oliver Chow: With our unmatched market position and cross-platform capabilities, Light & Wonder has created a compelling value proposition. Our results clearly demonstrate that we are delivering the iconic content that players want with the ability to choose where and when they want to play their favorite Light & Wonder titles. Across our business units, our industry-leading talent and high-performance culture are the key to our path to success and provide confidence for our future. We will continue to enhance our talent and invest in our culture to drive innovation and promote the lasting impact of our product offerings.

Nick Zangari: That has created a compelling value proposition.

Nick Zangari: Our results clearly demonstrate that we are delivering the iconic content that players want with the ability to choose.

Nick Zangari: And when they want to play their favorite mountain one of the guidance.

Oliver Chow: Across our business units, our industry, leading talent and high performance culture.

Oliver Chow: Key to our partnership.

Nick Zangari: Provide company for a future we will continue to enhance that talent and invest in our culture to drive innovation.

Nick Zangari: The lasting impact of our product offering.

Oliver Chow: Importantly, we will support our creative talent and strategic initiatives with disciplined R&D investments that drive long-term sustainable values. Above all, we're going to focus on operational excellence as we continue to extend our market reach. And I want to thank the team for their dedication to this journey. I'm very excited about the momentum we are creating and look forward to the opportunities ahead for Light & Wonder in 2024. The best is yet to come. With that, I'll turn to Oliver to review our first quarter financial results.

Nick Zangari: Importantly, we will support our creative talent and strategic initiatives disciplined R&D investments to drive long term sustainable value a bubble.

Nick Zangari: Focus on operational excellence as we continue to extend our market rates and I want to thank the claim for their dedication to this end.

Speaker Change: I'm very excited about the momentum we are creating and look forward to the opportunities ahead for lot. One and 2024 best is yet to come with that I will turn to all of US to review, our first quarter financial results.

Oliver Chow: Thank you, Matt. I'm pleased to share that we started the year with strong overall performance, marking our seventh consecutive quarter of double-digit consolidated revenue growth and sixth consecutive quarter of double-digit revenue growth across all three segments. Consolidated revenue increased 13% year over year to $756 million, driven by continued momentum across all businesses. Operating income was $165 million in the quarter, an increase of 62% over the prior year, primarily due to higher revenue and healthy margins, along with lower depreciation and amortization and lower restructuring and other costs.

Speaker Change: Thank you, Matt I am pleased to share that we started the year with strong overall performance, marking our seventh consecutive quarter of double digit consolidated revenue growth and sixth consecutive quarter of double digit revenue growth across all three segments.

Oliver Chow: Consolidated revenue increased 13% year over year to $756 million driven by continued momentum across all businesses.

Speaker Change: Operating income was $165 million in the quarter, an increase of 62% over the prior year, primarily due to the higher revenue and healthy margins, along with lower depreciation and amortization and lower restructuring and other costs.

Speaker Change: Consolidated EBITDA grew 13% to $281 million compared to the prior year period, resulting in a consolidated EBITDA margin of 37% for the quarter on robust topline growth and our commitment to maintain strong margins across all of our businesses.

Oliver Chow: Consolidated AYBDA grew 13% to $281 million compared to the prior year period, resulting in a consolidated AYBDA margin of 37% for the quarter on robust top-line growth and our commitment to maintain strong margins across all of our businesses. Adjusted MPAT-A increased 22% year-over-year to $105 million, primarily due to strong revenue growth across all of our businesses and healthy margins. I will note that we disclosed the reconciliation of adjusted MPAT-A in our earnings press release along with other financial details in our quarterly Form 10-2 filed with the SEC.

Nick Zangari: Adjusted <unk> increased 22% year over year to $105 million, primarily due to strong revenue growth across all of our businesses and healthy margins.

Oliver Chow: You'll note that we disclosed a reconciliation of adjusted <unk> in our earnings press release, along with other financial details and our quarterly Form 10-Q filed with the SEC.

Nick Zangari: Our results reflect the collective and collaborative work of our business units.

Oliver Chow: Our results reflect the collective and collaborative work of our business units. In gaming, we continue to deliver on strong financial and key performance metrics, a true testament that we remain focused on executing our robust product roadmap and commercial strategy. Revenue in the quarter grew 14% year over year to $476 million, led by another quarter of strong global gaming machine sales and gains across gaming operations and systems. Aibidal was up 13% to $232 million compared to the prior year, with profitability primarily driven by revenue uplift in the period.

Nick Zangari: In gaming, we continue to deliver on strong financial and key performance metrics a true Testament that we remained focused on executing on a robust product roadmap and commercial strategy.

Nick Zangari: Revenue in the quarter grew 14% year over year to $476 million led by another quarter of strong global gaming machine sales and gains across gaming operations and systems.

Nick Zangari: EBITDA was up 13% to $232 million compared to the prior year with profitability, primarily driven by revenue uplift in the period.

Nick Zangari: EBITDA margin was 49% in line with prior year levels as we maintained healthy margins through our ongoing margin enhancement initiatives, while continuing to invest for future growth.

Oliver Chow: EBITDA margin was 49%, in line with prior year levels as we maintained healthy margins through our ongoing margin enhancement initiatives while continuing to invest for future growth. Gaming operations revenue in the quarter increased 3% compared to the prior year on continued growth in our North American installed base, primarily due to the successful launch of Dragon Train in North America late in the quarter, partially offset by declines in international markets related to the fleet optimization that we previously shared.

Oliver Chow: Gaming operations revenue in the quarter increased 3% compared to prior year on continued growth in our North American installed base, primarily due to the successful launch of Dragon trained in North America late in the quarter.

Nick Zangari: Partially offset by declines in international markets related to the fleet optimization that we previously shared.

Nick Zangari: Importantly revenue per day grew 4% in North America year over year approaching $49 and continued performance of our license and proprietary games backed by our popular Cosmic Bureau, and Scott a dual screen cabinets.

Oliver Chow: Importantly, revenue per day grew 4% in North America year over year, approaching $49 on continued performance of our licensed and proprietary games backed by our popular Cosmic, Mural, and Cascada dual-screen cabinets. Global game sales were robust in the quarter, with revenue up 30% year-over-year. North American and international replacement unit shipments increased 14% and 68%, respectively, with North America driven by a ramp-up in adjacent markets, and international driven by continued strength in Australia, new and expansion sales in the Philippines and South Korea, as well as replacement opportunities in Macau.

Oliver Chow: Global game sales were robust in the quarter with revenue up 30% year over year.

Nick Zangari: North American and international replacement unit shipments increased 14% and 68% respectively. Both North America, driven by a ramp in adjacent markets and internationally driven by continued strength in Australia.

Oliver Chow: New and expansion sales in the Philippines, and South Korea, as well as replacement opportunities in Macau.

Nick Zangari: Additionally, average selling prices increased 6%, reaching approximately $20000 in the quarter as we continue to place premium products at both the North American and international markets.

Oliver Chow: Additionally, average selling prices increased 6%, reaching approximately $20,000 in the quarter as we continue to place premium products into both the North American and international markets. In systems, revenue increased 9% year over year, primarily on higher hardware sales into existing and new customers. And lastly, table products revenue was relatively flat compared to the prior year.

Nick Zangari: In systems revenue increased 9% year over year, primarily on higher hardware sales into existing and new customers and.

Nick Zangari: And lastly table products revenue was relatively flat compared to prior year.

Nick Zangari: Our results demonstrated the strength of our product portfolio and continued execution to strategy, which.

Oliver Chow: Our results demonstrated the strength of our product portfolio and continued execution of our strategy, which gives me confidence in our ability to maintain the strong momentum through the year as we expand into international and adjacent markets, in addition to further growth in North American Class III markets. Moving on to Sideplay, where we continue to outpace our peers with another record revenue quarter, once again establishing ourselves as the industry leader in year-over-year growth in the social casino space.

Nick Zangari: Gives me confidence in our ability to maintain the strong momentum through the year as we expand into international and adjacent markets. In addition to further growth in the North American class III market.

Nick Zangari: Moving on to Si play, where we continue to outpace our peers with another record revenue quarter once again, establishing ourselves as the industry leader in year over year growth in the social casino space.

Oliver Chow: Revenue in the quarter was up 11% year-over-year to $206 million, on growth underpinned by robust player engagement and monetization, leveraging our dynamic live operations through the Sideplay engine across our portfolio of high-performing games. I'd like to mention that you may have seen a notable increase in our web in-app purchases and other revenue lines with meaningful uplift in recent quarters. Revenue from our direct consumer platform, which has progressed nicely, is reported in this line item. This subsequently impacts growth in the mobile line item that we and several other data platforms report externally.

Nick Zangari: Revenue in the quarter was up 11% year over year to $206 million on growth underpinned by robust player engagement and monetization leveraging our dynamic live ops to the Si play engine across our portfolio of high performing games.

Oliver Chow: I would like to mention that you may have seen a notable increase in our web in app purchases and other revenue line with meaningful uplift in recent quarters.

Nick Zangari: Revenue from our direct to consumer platform, which is progressing nicely as reported in this line item.

Nick Zangari: This subsequently impacts growth in the mobile line item that we and several other data platforms report externally.

Nick Zangari: EBITDA increased 15% to $62 million year over year with EBITDA margin up 100 basis points to 30% driven by continued revenue growth, partially offset by higher targeted and planned marketing spend which has proven to be an effective growth strategy for <unk>.

Oliver Chow: AEPDA increased 15% to $62 million year-over-year, with AEPDA margin of 100 basis points to 30%, driven by continued revenue growth, partially offset by higher targeted and planned marketing spend, which has proven to be an effective growth strategy for CyPlay. While there will be user acquisition costs that are dynamic quarter to quarter, we will always take a prudent approach with a focus on long-term return and expect that margin will scale over time.

Nick Zangari: While there will be user acquisition costs of our dynamic quarter to quarter, we will always take a prudent approach with a focus on long term return and expect that margin will scale over time.

Oliver Chow: Our monetization metrics continue to set new records with average revenue per daily active user up 13% year over year suggest over a dollar on a steady base of $2 2 million daily active users.

Oliver Chow: Our monetization metrics continue to set new records, with average revenue per daily active user up 13% year-over-year to just over a dollar on a steady base of 2.2 million daily active users. Average monthly revenue per paying user was nearly $114, an increase of 17% compared to the prior year, while maintaining payer conversion above 10%.

Nick Zangari: Average monthly revenue per paying user was nearly $114 an increase of 17% compared to prior year, while maintaining payer conversion above 10%.

Oliver Chow: We are pleased with the execution of Si play, where we continue to see outperformance relative to the market.

Oliver Chow: We are pleased with the execution of SidePlay, where we continue to see outperformance relative to the market. These favorable growth trends continue to be driven by our focus on engagement, retention, monetization, and our cross-platform strategy. We are confident in our marketing blueprint, where dollars go further on high-quality investment opportunities, generating meaningful returns to fuel sustainable long-term growth and profitability. On to iGaming, where offering an ecosystem can change the scale as the market continues to expand.

Oliver Chow: These favorable growth trends continued to be driven by our focus on engagement retention and monetization and our cross platform strategy.

Nick Zangari: We are confident in our marketing blueprint, where dollars go further on high quality investment opportunities generating meaningful returns to fuel sustainable long term growth and profitability.

Nick Zangari: Answer I gaming, we're offering an ecosystem continues to scale as the market continues to expand.

Oliver Chow: Revenue in the quarter increased 14% year-over-year to a record $74 million, primarily driven by our strong content launches and U.S. and international market expansion. Aebadub revenue grew 9% to $25 million, largely on top line growth, with Aebadub margin remaining healthy at 34%, trending in line with historical levels, while we continue to invest in content and product development with a focus on future margin expansion. Wages processed through our iGaming OGS platform increased 10% from our prior year period to a record $22.4 billion on healthy levels of engagement.

Oliver Chow: Revenue in the quarter increased 14% year over year to a record $74 million.

Nick Zangari: Primarily driven by our strong content launches and U S and international market expansion.

Nick Zangari: And EBITDA grew 9% to $25 million largely on topline growth with an EBITDA margin remaining healthy at 34% trending in line with historical levels, while we continue to invest in content and product development with a focus on future margin expansion.

Nick Zangari: Wages process through our <unk> platform increased 10% from our prior year period to a record $22 $4 billion unhealthy levels of engagement.

Nick Zangari: Overall, we expect to extend our momentum through our original content and regionalized roadmap underpinned by scale and a well rounded portfolio.

Oliver Chow: Overall, we expect to extend our momentum through our regional content and regionalized roadmap, underpinned by scale and our well-rounded portfolio. With our businesses firing on all cylinders, we will continue to evaluate processes for efficiencies, staying agile and nimble to adapt to changing environments to drive further operational excellence within the organization. This strategy has proven to be effective, as reflected in the healthy margins we achieved in the quarter, as we continue to invest organically in the business.

Oliver Chow: With our business is firing on all cylinders, we will continue to evaluate processes for efficiencies.

Nick Zangari: I'll and nimble to adapt to changing environments to drive further operational excellence within the organization.

Nick Zangari: This strategy has proven to be effective as reflected in our healthy margins, we achieved in the quarter as we continue to invest organically in the business.

Oliver Chow: Importantly, our teams will continue to maximize the efficiency of our business through enhancing processes and automation opportunities, staying committed to driving sustainable long-term profitability through value-enhancing initiatives. On to the balance sheet and cash flow. At the end of the quarter, we had approximately $1.2 billion of available liquidity, including $450 million of cash on hand.

Nick Zangari: Importantly, our teams will continue to maximize the efficiency of our business through enhancing processes and automation opportunities and committed to driving sustainable long term profitability through value enhancing initiatives.

Nick Zangari: Onto balance sheet and cash flow.

Nick Zangari: At the end of the quarter, we had approximately $1 2 billion of available liquidity, including $450 million of cash on hand.

Oliver Chow: Notably, we received a one-notch corporate family rating upgrade at Moody's in April on our Strengthened Balance Sheet and meaningfully cash-generative business. Our consolidated operating cash flow was $171 million in the quarter, and free cash flow increased 26% compared to the prior year to $93 million, reflecting strong earnings partially offset by less favorable changes in working capital and increases in capital expenditures.

Nick Zangari: Notably we received a one notch corporate family rating upgrade at Moody's in April on our strengthened balance sheet and meaningfully cash generative business.

Nick Zangari: Our consolidated operating cash flow was $171 million in the quarter and free cash flow increased 26% compared to prior year to $93 million reflective of a strong earnings partially offset by less favorable changes in working capital and increases in capital expenditures.

Oliver Chow: <unk>.

Nick Zangari: With the strong performance and demand of our newly released games, we expect an increase in capital expenditures in the coming quarters as we continue to invest for sustainable growth.

Oliver Chow: With the strong performance and demand of our newly released games, we expect an increase in capital expenditures in the coming quarters as we continue to invest for sustainable growth. The highly scalable nature of our business and continuous efforts to improve conversion rates will allow us to further scale annual cash flows over time. We remain within our targeted net debt leverage ratio range at 3.0 times at the end of Q1, with enhanced optionality around capital allocation as your business continues to grow. During the quarter, we bought back $25 million worth of shares. In total, we have repurchased approximately $600 million, or 80% of the $750 million authorized program.

Nick Zangari: The highly cash generative nature of our business and continuous efforts to improve conversion rates will allow us to further scale annual cash flows overtime.

Oliver Chow: We remain within our targeted net debt leverage ratio range of three times at the end of Q1.

Nick Zangari: With enhanced optionality around capital allocation as our business continues to grow.

Nick Zangari: During the quarter, we bought back $25 million worth of shares.

Nick Zangari: In total we have repurchased approximately $600 billion or 80% of the $750 million.

Nick Zangari: Authorized program.

Oliver Chow: As we generate incremental free cash flow, we will be opportunistic as we see value dislocations in the market while having a programmatic share purchase plan now in place. With a streamlined business, we will continue to invest organically in growth initiatives for the long term. We will consider M&A opportunities that are complementary to our core business and above internal return hurdles as we further develop and deploy our robust R&D engine across platforms.

Nick Zangari: As we generate incremental free cash flow, we will be opportunistic as we see value dislocations in the market, while having a programmatic share repurchase plan now in place.

Nick Zangari: With the streamline business, we will continue to invest organically into growth initiatives for the long term.

Nick Zangari: We will consider M&A opportunities that are complementary to our core business and above internal return hurdles as we further develop and deploy our robust R&D engine across platforms.

Oliver Chow: We remain diligent in our efforts to prioritize shareholder value through capital returns and strategic investments.

Oliver Chow: We remain diligent in our efforts to prioritize shareholder value through capital returns and strategic investments. Our team has done a tremendous job executing the strategy, elevating Light & Wonder to one of the fastest growing companies in the industry, underpinned by a healthy balance sheet and strong cash flows. Importantly, we are doing so in an efficient way with a prudent approach to reinvesting back into the business without compromising top-line growth and R&D, a key driver of success here at Light & Wonder.

Nick Zangari: Our team has done a tremendous job executing the strategy.

Oliver Chow: <unk> wondering if one of the fastest growing companies in the industry underpinned by healthy balance sheet and strong cash flows.

Oliver Chow: Importantly, we are doing so in an efficient way with a prudent approach to reinvesting back into the business without compromising topline growth and R&D.

Nick Zangari: A key driver of success here at night and Wonder.

Nick Zangari: This quarter is just another proof point as we continue on our journey to scale the business.

Oliver Chow: This quarter is just another proof point as we continue on our journey to scale the business. I am confident in our ability to deliver on our roadmap and achieve sustainable growth towards our target and beyond. With that, we will turn it over to the operator for your questions.

Nick Zangari: I am confident in our ability to deliver on our roadmap and achieve sustainable growth towards our target and beyond.

Oliver Chow: With that we will turn it over to the operator for your questions.

Nick Zangari: Okay.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one and as a reminder, if youre using a speakerphone. Please remember to pick up your.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason, you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. And as a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question, and we will pause here briefly as questions are registered. And the first question is from the line of Barry Jonas with Truist: you may proceed.

Barry Jonathan Jonas: Handset before asking a question we will pause briefly questions are registered.

Speaker Change: And the first question is from the line of Barry Jonas with Truest you May proceed.

Barry Jonathan Jonas: Hey, guys wanted to ask about side play.

Barry Jonathan Jonas: How are you thinking about the growth trajectory for here and for DTC you are at 6% now how do you see that ramping and how high do you think it can get.

Barry Jonathan Jonas: Yes, Great question, Matt Wilson here, obviously really proud of the exceptional results that they have the orca.

Matthew R. Wilson: Yeah, great question. Matt Wilson here, obviously.

Matthew R. Wilson: Yeah, really proud of the exceptional results Slideplay's been able to orchestrate. Again, they just go quarter to quarter, back to back, consistently taking share in the marketplace. Really the only provider in the space that does that.

Matthew R. Wilson: Orchestrate again, they just go quarter to quarter back to back of consistently taking share in the marketplace really the army.

Matthew R. Wilson: Provider in the space is doing that one of the things I really liked about this specific result was this the diversity diversification in the result, there was a contribution by all four of our Big Games Jackpot Party quick hit slots goldfish, IDI fortune or making meaningful contributions to the growth of this business in this last quarter and I think that this gives us.

Matthew R. Wilson: One of the things I really liked about this specific result was the diversification in the result. There was a contribution from all four of our big games, Jackpot Party, Quick Hit Slots, Goldfish, and 88 Fortunes, all making meaningful contributions to the growth of this business in this last quarter. And I think that just gives us the confidence that we can take that playbook and expand it even further across more games in our portfolio.

Matthew R. Wilson: The confidence that we can take that playbook and expand it even further across more gains in that portfolio and how the team's working really hard to retool monopoly.

Matthew R. Wilson: I know the team's working really hard to retool Monopoly. That's another game that we see contributing to our results in the future. So it's very impressive. I think DTC's another great example of how this team tackles big, hairy problems. We kind of used 2003 to pilot DTC.

Matthew R. Wilson: But again, we see contributing to our results in the future. So it's it's very impressive I think D. C is another great example of how this team tackled big hairy problems.

Matthew R. Wilson: We kind of.

Matthew R. Wilson: <unk> 2003 to pilot data say, we're about 1% of revenues in 2023 in Q1. This year like you mentioned, 6% of revenues coming through that platform, we see industry peers as high as 2024%, 25%. So thats really the goalpost that we need to get to over time it will take some time.

Matthew R. Wilson: We're about 1% of revenues in 2023. In Q1 this year, like you mentioned, 6% of revenues came through that platform. We see industry peers as high as 24%, 25%. So that's really the goalpost that we need to get to over time. It'll take some time.

Matthew R. Wilson: We'll see it ramp up here in the second quarter and beyond. But, yeah, we see a long runway to having a successful DTC revenue stream down the line. Yeah, and just to build on that, we'll continue to invest in and deploy the site play engine across the portfolio of games. And we're going to continue to leverage data analytics to enhance player engagement and monetization prudently over time. There's also going to be further opportunities for us to lean into UA, as we did in Q1, with just a continued focus on improving returns.

Matthew R. Wilson: We will say, we will see it ramp up here in the second quarter and beyond.

Matthew R. Wilson: A long run way to having a successful DTC.

Matthew R. Wilson: Our revenue stream and a lot.

Matthew R. Wilson: And just to build on that we will continue to invest and deploy the Si play engine across the portfolio of games.

Matthew R. Wilson: To leverage data analytics to enhance player engagement and monetization prudently over time, there's also going to be further opportunities for us to lean into UA as we did in Q1 with just a continued focus on improving returns. We saw strong returns on the AD spend that we did make in Q1 and so we will further review that with the team and see if there's any other opportunities to drive.

Matthew R. Wilson: We saw strong returns on the ad spend that we did make in Q1. And so we'll further review that with the team and see if there are any other opportunities to drive LTVs over time. Yeah, maybe just one final call out for the site play team. Obviously, headquartered out of Cedar Falls, Iowa, they have a big team in Austin, Texas. But they also have a huge team in Tel Aviv in Israel.

Matthew R. Wilson: LTV is overtime.

Matthew R. Wilson: Maybe just one final call after the <unk>, obviously headquartered out of state a full the IRR or they've got a big team in Austin, Texas. They also have a huge statement in Tel Aviv Israel.

Matthew R. Wilson: So to put up this level of results over the last few quarters, given everything that that team has dealt with, I just couldn't be more proud of that team. It's just a testament to their character, their teamwork, and the contribution they're making. So it's just fantastic to have them back in the portfolio and really proud of the results and everything the site play team has done.

Matthew R. Wilson: So to put up this level of results over the last few quarters, given everything that that team has dealt with just.

Matthew R. Wilson: Couldnt be more proud from that same assist a testament to their character their teamwork and the contribution that might be just fantastic to have them back in the portfolio and really proud of the results and everything that <unk> done.

Speaker Change: Perfect. Thanks, so much guys I appreciate it.

Operator: Perfect. Thanks so much, guys. I appreciate it. Welcome. Thanks, Barry. The next question is from the line of Chad Beynon. Macquarie. You may proceed.

Speaker Change: Welcome Thanks Barry.

Speaker Change: The next question is from the line of Chad Beynon with Mercury you May proceed.

Operator: The next question is from the line of Chad Beynon with Macquarie. You may proceed. Afternoon, Matt Oliver. Thanks for taking my question.

Chad C. Beynon: Good afternoon, Matt Oliver Thanks for taking my question wanted to drill down into the unit sales. So a nice year over year growth, Matt you've talked about some of these adjacencies over the past couple.

Chad C. Beynon: Meetings and earnings calls.

Chad C. Beynon: Can you kind of flush that out just a little bit just in terms of.

Chad C. Beynon: Where that opportunity stands with VLT as co am et cetera, and kind of what's ahead in 2004.

Chad C. Beynon: Yeah. Great question. This is an exciting part of the gaming portfolio I'm, calling 2020 for the year of Adjacencies within building towards this for a number of years a lot of resources. The R&D effort has gone into this and a really important part of our growth strategy for the gaming business, there's a number of markets coming online in.

Matthew R. Wilson: Yeah, great question. This is an exciting part of the gaming portfolio. I'm calling 2024 the Year of Adjacencies. We've been building towards this for a number of years. A lot of resources, a lot of R&D effort has gone into this, and it's a really important part of our growth strategy for the gaming business. There are a number of markets coming online in late 23 and then throughout 24. I think it's the continuation of the Illinois VGT market, which has been a great market for us for some time.

Chad C. Beynon: Late 'twenty three and then throughout 'twenty four.

Chad C. Beynon: I think it's the continuation to the Illinois, <unk> market, which has been a great market for us for some time that continuing to expand and they are very excited about that we see ourselves as a multi quarter opportunity. We've shipped a couple of quarters worth of guidance theres more to come with ours. So theres a few Canadian VLT market that we have signed up and will transact with.

Matthew R. Wilson: That's continuing to expand there, so we are excited about that. We see OSL as a multi-quarter opportunity. We've shipped a couple of quarters' worth of games, and there's more to come with OSL. There are a few Canadian VLT markets that we have signed up for and will transact with throughout 2024. As you mentioned, Georgia Co-Am's coming online. We've got further expansion in HHR in 24. We've got West Virginia VLTs.

Matthew R. Wilson: Throughout 2024, as you mentioned, Georgia <unk> come online, we got further expansion in <unk> and 'twenty four we've got West Virginia <unk>. So it is really a layer cake of opportunities I think we.

Matthew R. Wilson: So it is really a layer cake of opportunities. I think we typically think about adjacencies in these large tranches of games and orders, but what we are actually seeing in our order book is these opportunities kind of layering on top of each other. I think if you look into the second quarter and third quarter, you'll start to see a really strong contribution coming out of these adjacencies, but coming through in a diversified way that really gives us a great pipeline.

Chad C. Beynon: We typically think about adjacencies in these large tranches of Gaiam and orders, but what we are actually saying in our order book is these opportunities kind of layering on top of each other I think if you look into the second quarter and third quarter, you'll start to say.

Chad C. Beynon: Really strong contribution coming out of these adjacencies, but coming through in a in a diversified way that really gives us a.

Chad C. Beynon: Great pipeline, so I think it sets up nicely I think siobhan and Nathan drying and the team's been working really hard to get us in this position in 2024 will be a year, where we get.

Matthew R. Wilson: So I think it sets up nicely. I think Siobhan and Nathan Drain and the team have been working really hard to get us in this position, and 2024 will be a year where we get significant upside in those adjacent categories.

Matthew R. Wilson: If we get upside in those adjacent categories.

Speaker Change: Thank you very much.

Matthew R. Wilson: The next question is from the line of Rohan Gallagher with Jordan You May proceed.

Operator: The next question is from the line of Rohan Gallagher with Jarden. You may proceed.

Operator: Yeah.

Operator: Matt, Oliver, good afternoon. Congratulations on the result.

Rohan Gallagher: Not all have a good afternoon.

Rohan Gallagher: Congratulations on the result gaming operations, obviously, most profitable segment within the gaming space.

Matthew R. Wilson: Gaming operations, obviously the most popular segment within the gaming space. Probably a little bit frustrated with the lack of installed growth up until the last two quarters. We're starting to see that move with games like Dragon Train performing exceptionally well here in Australia. Can you unpack that in terms of your confidence in that inflection point towards realizing your targets for FY24-25?

Matthew R. Wilson: Probably a little bit frustrated with the lack of installed growth up until the last two quarters was timing to see that move with some games like Dragon try and performing exceptionally well here in Australia can you unpack that in terms of your confidence in that inflection point towards realizing your targets for FY 'twenty four 'twenty five place.

Speaker Change: Yeah, Great question I think the deck is stacked for the gaming ops in 2020 for US as you mentioned, we are saying.

Matthew R. Wilson: Yeah, great question. I think the deck is stacked for gaming ops in 2024 for us. As you mentioned, we're seeing a solid pipeline of opportunity here. I think we've just clicked off the 15th consecutive quarter of install base growth. I think we're now reporting 49% of our installed base in that premium category, and that's the one we care most about. That's the most profitable segment with the most opportunity. As you know, the North American install base is comprised of premium gaming operations in those public markets.

Matthew R. Wilson: Solid pipeline of opportunity here I think we've just clicked off the 15th consecutive quarter of install base growth I think we're now reporting 49% of our install base and that premium category and that's the one we care most about that's the most profitable segment with the most opportunity as you know the North American installed base is comprised of premium gaming after the public market.

Speaker Change: It is really that premium category, we're looking to drive and.

Matthew R. Wilson: It's really that premium category we're looking to drive, and I see that showing up in the RPDs. We're up 4% year-on-year in terms of RPDs, so that speaks to the premiumization of our install base, and I think we're very well positioned for the remainder of the year. I'll give you two data points that support that.

Matthew R. Wilson: I will say that happening. So you can say thats showing up in the <unk> days are up 4% year on year in terms of op. A day, so that speaks to the premium amortization of our install base and I think we're very well positioned for the remainder of the year I'll give you two data points that support that one either not eilers reported their quarterly slot survey if you look at the most dense.

Matthew R. Wilson: One, overnight, Islays reported their quarterly slot survey. If you look at the most anticipated games on that list, number one was Dragon Train, number two was Squid Game, number five was Huff & Puff Money Mansion. So three of the top five most anticipated games in terms of what operators are looking for. Light & Wonder games, I think 52% of the total votes came from Light & Wonder products.

Matthew R. Wilson: Dissipated gains on that list number one was dragon trying number two with squid Guy and number five was huff and puff.

Matthew R. Wilson: Mani matching so yes three of the top five most anticipated guidance.

Matthew R. Wilson: In terms of what operators are looking for.

Speaker Change: Hey, guys I think it was 52% of the total votes came from lot and want our products. So that just shows you the pipeline sets up really nicely for the remainder of the year. Another data point I'll give you 12 of the top 25, new premium games on the rates in our survey.

Matthew R. Wilson: So that just shows you the pipeline sets up really nicely for the remainder of the year. Another data point I'll give you, 12 of the top 25 new premium games on the recent Islay survey were Light & Wonder games as well. So you can see the games that are performing in our install base are doing really well, and then the games in the pipeline are highly anticipated. So I think the contribution across a breadth of products, including Dragon Train, really sets us up for a great year in 2024.

Matthew R. Wilson: And again as well so you can say the gains of the performing.

Matthew R. Wilson: Install base are doing really well and then the guidance and the pipeline highly anticipated.

Matthew R. Wilson: The contribution across our breath of product, including Dragon trying really sets us up for a great year in 2024, and I think you can expect a material pickup installed throughout the reminder of the yeah and just to build on that Matt as we continue to scale, our install base, especially on the on the premium side, we wont expect capex to <unk>.

Matthew R. Wilson: I think you can expect a material pickup in installs throughout the remainder of the year. Yeah, and just to build on that, Matt, as we continue to scale our install base, especially on the premium side, we will expect CapEx to scale as that install base grows. So with the excitement that we're hearing from our customers around the product portfolio that Matt just mentioned, we'll continue to invest in CapEx to meet the demands of the market, broadly speaking. So we're in a great position, and this is the inflection point we've been waiting for. Very exciting. Thank you, gentlemen. The next question is from the line of Ryan Sigdahl with Craig Hollum.

Matthew R. Wilson: <unk> as that installed base growth so with the excitement that we're hearing from our customers around the product portfolio that Matt just mentioned, we will continue to invest capex to meet meet the demands of the market broadly speaking so we're in a great position and this is the inflection point, we've been waiting for so they are exciting.

Matthew R. Wilson: Yeah.

Ryan Ronald Sigdahl: Thank you gentlemen.

Matthew R. Wilson: Yeah.

Ryan Ronald Sigdahl: The next question is from the line of Ryan <unk> with Craig Hallum. You May proceed.

Operator: The next question is from the line of Ryan Sigdahl with Craig Hollum. You may proceed. Hey, Matt, Oliver, would you like to

Ryan Ronald Sigdahl: Hey, Matt Oliver wanted to.

Ryan Ronald Sigdahl: Our focus on international here, a little bit so continued strength in game sales outside of your core U S and Australia markets. It seems like your global platform is increasingly a powerful competitive advantage there, but curious anything you can share whether it be in South Korea, Macau, Philippines, et cetera, and what games and products are resonating for you.

Operator: Guys.

Speaker Change: Yes. Another great question I think the international gaming category was the hero category for US I think it's just one way where we are significantly differentiated supplier in this space given our global footprint our product diversity.

Matthew R. Wilson: Yeah, another great question. I think the international gaming category was the hero category for us. I think it's just one way we are a significantly differentiated supplier in the space, given our global footprint, our product diversity, and geographic diversity. We're not like many of the competitors in the space. We have a very diversified business. This category was up from a unit sales perspective 45% year-on-year. Just an amazing growth of that business.

Geographic diversity.

Matthew R. Wilson: Like many of the competitors in the space, we have a very diversified business.

Matthew R. Wilson: This category was that from a unit sale suspect a 45% year on year, 45%. So I was just an amazing.

Matthew R. Wilson: Growth of that business hats off to Simon Johnson, who runs our international business I think really two part story that's driving this number the first one is the <unk> market, which I think is a fascinating case study and the out of the possible.

Matthew R. Wilson: Hats off to Simon Johnson, who runs our international business. I think there is a really two-part story that's driving this number. The first one is the ANZ market, which I think is a fascinating case study in the art of the possible.

Matthew R. Wilson: As a business, we have been a sub-10% player in that market for decades. We've been at this for nearly 40 years, in all the incarnations of this company, whether it's Bally or Shufflemaster or Star Games or Scientific Games. We're just really proud of that team, declaring on this earnings call that for the first time in company history, we were number one in the Australian market. We just don't get tired of talking about that level of success. Anyone that's listening on the line that played a role in that, if I had a hat on, I'd take it off to you. It's just exceptional.

Matthew R. Wilson: Business, we have been a sub 10% player in that market for decades, we've been at this now.

Matthew R. Wilson: Nearly 40 years in all the incarnations of this company, whether it's valeo shuffle.

Matthew R. Wilson: <unk> scientific games and I'm, just really proud of that so many of declaring on this earnings call first time in company history. We were number one in the Australian market. So I just don't get tired of talking about that level of success that any one of us.

Matthew R. Wilson: With me on the line.

Matthew R. Wilson: <unk> role in that if I had to add on I take it off to you. It is just exceptional.

Matthew R. Wilson: We see many quarters and many years of runway to continue that growth trajectory.

Matthew R. Wilson: We've seen many quarters and many years of runway to continue that growth trajectory. I think probably the second element to that is the Asian market, as you mentioned. I think really the Philippines expansion is in full force at the moment. You saw some of that in Q1, but a lot more to come through the remaining quarters of this year. Then the other big driver is Macau. We're going to see a regulatory shunt take place here in the next 12 to 24 months. We're a 50% share player in that market too, and I think it sets up really nicely, and I think you can continue to expect the international gaming segment to contribute in a meaningful way.

Matthew R. Wilson: Probably the second element to that is the Asian market. As you mentioned, so I think really the Philippines expansion is in full force at the moment you saw some of that in Q1, but a lot more to come through the remaining quarters of this year and then the other big driver is in Macau. So we are going to stay a regulatory Shannon to take place here in the next 12 months to 24 months.

Matthew R. Wilson: We're a 50% share player in that market. So I think sets up really nicely and I think you can continue to expect the international gaming segment segment to contribute in a meaningful way.

Matthew R. Wilson: Okay.

Matthew R. Wilson: Okay.

Speaker Change: Great job guys. Good luck.

Operator: Great job, guys. Good luck. Thank you. The next question is from the line.

Speaker Change: Thank you.

Operator: The next question is from the line of Rohan <unk> with.

Operator: The next question is from the line of Rohan Sundram with MST Marquis.

Rohan Sundram: With MST marquee.

Rohan Sundram: You May proceed.

Rohan Sundram: Thank you and good afternoon met Oliver and Simon will down to just the one from me in terms of how would you describe slot demand globally across the market.

Rohan Sundram: From your customers and how would you rate your forward order visibility in these key markets as well.

Operator: Thanks.

Rohan Sundram: Yes, Thanks, Ron looking forward to seeing you next week.

Matthew R. Wilson: Thanks Rohan, looking forward to seeing you next week. Yeah, I think from a macro perspective, and if you're just looking specifically at GGR in North America, I think we observed, like many did in the industry, a little bit of softness in January, weather-related, and I think, you know, the remaining months of the quarter, we saw a bounce back in GGR, and the industry posted a really solid number. It's well up on, you know, pre-COVID levels.

Matthew R. Wilson: Yes, I think from a macro perspective, if you're just looking specifically at <unk> in North America I think we observed like many did in the industry a little bit of softness in January weather related and I think the remaining months of the quarter. We saw a bounce back in <unk> and the industry posted a really solid number with well up on pre COVID-19 levels. So I think.

Matthew R. Wilson: That puts the industry on really solid footing, we have from our vantage point, not saying any changes.

Matthew R. Wilson: So I think that puts the industry on really solid footing. We're, from our vantage point, not seeing any changes in customer purchase behavior, and the order book looks really solid. And I think there are two things driving that order book for us. One is improving games. So again, back to the ILS report, we have the number one game in the core space, Huff, and even more Puff, and a variety of games from a variety of studios really driving that improvement in product quality. So that kind of underpins the order book that we can see looking forward. And then there is this adjacent story we just spoke about.

Matthew R. Wilson: In customer purchase behavior, and the order book looks really solid and I think there's two things driving that order book for US one is improving game. So again back to the Eilers report we are the number one game in the cost base in half and even more path and a variety of games from a variety of studio is really driving that improvement in product quality, so that kind of underpins.

Matthew R. Wilson: The order book that we can say looking forward and then the other one is this adjacency story. We just talked about these are discrete opportunities that are kind of well capitalized both from a government perspective and from a new market perspective, So a lot less volatile in terms of the pipeline I would say around those adjacencies. So the combination of all of those things gives us good confidence in the.

Matthew R. Wilson: These are discrete opportunities that are kind of well capitalised, both from a government perspective and from a new market perspective. So they are a lot less volatile in terms of the pipeline, I would say, around those adjacencies. So the combination of all those things gives us good confidence for the remainder of the year. I think the other international markets are in different places. I think you're seeing Asia rebound from the lows of the last few years and really coming back to full strength.

Matthew R. Wilson: During the year.

Matthew R. Wilson: The other international markets are in different places I think you're saying Asia rebound.

Matthew R. Wilson: The law is in the last few years and really coming back to full strength I think Australia is a consistent churn market.

Matthew R. Wilson: Participating in this.

Matthew R. Wilson: I think Australia is a consistent churn market that we're participating in there, so I don't expect any radical changes there. But I think, you know, on balance, the industry is on solid footing. We watch the consumer and the macro very closely, but there's nothing in the end markets at the moment suggesting that there's anything to worry about there. Yeah, and just a couple of very quick ads. You know, obviously, we do see solid data.

Matthew R. Wilson: Expect any radical changes there, but I think.

Matthew R. Wilson: On balance industries on solid footing, we watch the consumer on the macro very closely but nothing in the end markets at the moment, suggesting that there is anything to worry about that in just a couple of very quick add.

Oliver Chow: Yeah, and just a couple of very quick ads, you know, obviously we do see solid data points from our coin and are trending pretty well here in the quarter. And so to Matt's point, we see that, we see the GGR levels, even in our digital businesses, being pretty robust here in the quarter. So to Matt's point, I think we don't see anything in the data points here that would suggest anything different, but that's why it's important for us as we start to think about margin enhancement and other initiatives that we're working through to be able to give us some flexibility, you know, over the balance of the year.

Oliver Chow: Obviously, we do see solid data points from our coin and trending pretty well here in the quarter and so to Matt's point, we say, we see that we see <unk> levels, even in our digital businesses as well being pretty robust here in the quarter. So.

Oliver Chow: To Matt's point I think we don't see anything in the data points here that would suggest anything different but that's why it's important for us as we start to think about margin enhancement another.

Oliver Chow: Initiatives that we're working through to to be able to give us some flexibility.

Oliver Chow: The balance of the year.

Speaker Change: Thank you that's helpful.

Oliver Chow: Yeah.

Oliver Chow: The next question is from the line of David Katz with Jefferies. You May proceed.

Operator: The next question is from the line of David Katz with Jeffreys. You may proceed.

David Brian Katz: Hi afternoon, everyone.

Operator: Hi, afternoon, everyone. A nice quarter.

David Brian Katz: Nice quarter.

David Brian Katz: Can we just talk about two things one.

David Brian Katz: Is not a will you or what's your question, but we have this $1 billion or number out for next year.

Matthew R. Wilson: Can we just talk about two things? One, you know, is not a will you or won't you question, but we have this billion four number out for next year. Can we just go back over the sort of building blocks to, you know, getting to a billion four and, you know, allow us to decide where those building blocks are and how they stack up as we get into next year? And the second part of the question is really around cash flow conversion.

David Brian Katz: Can we just go back over the sort of building blocks.

Matthew R. Wilson: To getting to $2 billion or.

Matthew R. Wilson: Allow us to decide.

Matthew R. Wilson: Were those building blocks and how they stack up as we get into next year and the second part of the question is really around.

Matthew R. Wilson: Cash flow conversion.

Matthew R. Wilson: And, you know, Oliver, how do you see that evolving, you know, as we get, you know, toward that billion four-ish number for next year and even longer term? Where can the cash flow conversion wind up? Thank you.

Matthew R. Wilson: Oliver how you see that evolving.

Matthew R. Wilson: As we get.

Matthew R. Wilson: Towards that $1 billion four ish number for next year and even longer term.

Speaker Change: Cash flow conversion. Thank you.

Speaker Change: Yes kind of have an earnings call without that question, David the first and the one for expected buried a laid off with that but yes feel very very convicted obviously, we've been out telling the straight every earnings call. One four is the number if you speak to people here a lot and wonder. It is our mantra is that north star to thing, we're all chasing collectively.

Matthew R. Wilson: Yes, can't have an earnings call without that question, David, the first in the 1.4, expected Barry to lead off with that, but yes, feel very, very convicted, obviously we've been out telling the street, every earnings call, 1.4 is the number, if you speak to people here at Light & Wonder, it is our mantra, it is our north star, it's the thing we're all chasing collectively, and we feel very confident we can get there, and I think this last quarter is another demonstration of operating momentum that puts us squarely on the trajectory to get to that 1.4 billion, you won't see any hockey stick in 25, we see a nice kind of linear approach to getting to that 25 number, but a number of different pathways across all of these different businesses, I'll let Oliver speak to this, he's very well versed on the pathways.

Matthew R. Wilson: And we feel very confident we can get there and I think this last quarter is another demonstration of operating momentum that puts us squarely on the trajectory to get to that $1 4 billion and you want to say any hockey stick in 'twenty five we say kind of linear approach to getting to that 25 number but a number of different pathways across all of these different businesses all at all.

Matthew R. Wilson: All have expected this is very well versed on the pathways pathways, but at 1.4, yeah, Yeah listen I think to Matt's point nothing has really changed in terms of.

Oliver Chow: On the pathways to the 1.4, yeah. Listen, I think to Matt's point, nothing's really changed in terms of, you know, the building blocks, too.

Oliver Chow: So just very quickly from a gaming perspective, you know, we've already talked about kind of the shared games we have in the core, kind of class 3 markets, but the adjacent markets will be the critical component for us in gaming, and we're making really great strides here, to Matt's point early in the call. You know, side play. We continue to see strong retention engagement, and that's really driven by that side play engine in the UA initiatives that we've consistently kind of put forth, and we've really consistently outpaced our peers, you know, in these segments.

Oliver Chow: The building blocks to so just very quickly from a gaming perspective, we've already talked about kind of the share gains that we have in the core kind of class III markets, but the adjacent markets will be the critical component for us in gaming and we're making really great strides here to Matt's point earlier in the call.

Oliver Chow: I play we continue to see strong retention engagement engagement and that's really driven by that Si play engine in the UA initiatives that we've consistently kind of put forth and we've really consistently outpaced our peers.

Oliver Chow: In the segment, so prudent monetization will always be kind of the key for us in strategy and DTC will also provide us.

Oliver Chow: So prudent monetization will always be kind of the key for us in strategy, and DTC will also provide us with some tailwinds here as we head into 25. And I think from an iGaming perspective, you know, we expect continued growth in the global markets, particularly here in the U.S., as you've seen, you know, really over the past few years, our strategy remains, you know, pretty consistent there, which is just keep on deploying, providing content, cross-platform content, and then really executing a very robust, you know, regionalized roadmap.

Oliver Chow: Some tailwind here as we as we head into 'twenty, five and I think from an I gave me perspective.

Oliver Chow: We expect continued growth in the global markets, particularly here in the U S. As you've seen really over the past few years our strategy remains.

Oliver Chow: Pretty consistent there, which is just keep on deploying proven content cross platform content, and then really executing a very robust.

Oliver Chow: Regionalized roadmap, so all of that coupled with the.

Oliver Chow: So all of that coupled with, you know, the margin enhancement initiatives and the operational excellence that we're focusing on as an organization will help propel us to 1.4. Yeah, that's one call-out that I'd like to make, is this combination of the team focused on growth but doing it efficiently. So building a big pipeline of margin enhancement opportunities, this team does a fantastic job of optimizing costs, and that just gives us some buffer in the top line if we need it, not that we see it, but then also potential incrementality if that doesn't materialize. So we get excited about the pathways, and it's clear and obvious to us.

Oliver Chow: The margin enhancement initiatives and the operational excellence that we're focused on as an organization will help propel us to the one four.

Oliver Chow: One call out I would like to make is this combination of the team focused on growth, but doing it efficiently.

Oliver Chow: Putting a big pipeline of margin enhancement opportunity. This team does a fantastic job of optimizing costs and that just gives us some buffer in the top line, if we need it not that we say it but then also potential increments instrumentality.

Oliver Chow: Is that doesn't materialize.

Oliver Chow: And about the pathway and it's clear and obvious off.

Oliver Chow: Yeah, and then, David, to your free cash flow question, yeah, listen, that continues to be a key focus for us as a leadership team and as an organization, and we will see levels of conversion, especially here, and free cash flow levels within the quarters kind of ebb and flow. There's some seasonality, obviously, related to the timing of tax and interest payments, especially here in Q2, as well as the timing of, you know, working capital and CapEx investments, but overall, we do expect our annual conversion rate to continue to trend favorably here over the coming years.

Speaker Change: And then David to your free cash flow question, Yeah listen that continues to be a key focus for us as a leadership team and as an organization and we will see kind of conversion levels, especially here in free cash flow levels within the quarters kind of ebb and flow. There is some seasonality obviously related to timing of tax and interest payments.

Oliver Chow: Specially here in Q2, as well as timing of <unk>.

Oliver Chow: Working capital and Capex investments, but overall, we do expect our annual conversion rate to continue to trend favorably here over the coming years, we are not going to compromise long term growth to achieve a specific conversion rate, but as we scale, we will continue to invest in <unk>.

Oliver Chow: You know, we are not going to compromise long-term growth to achieve a specific conversion rate, but as we scale, we will continue to invest in CapEx, like I mentioned earlier, or R&D to really be key drivers for us as we move forward. But, you know, our free cash flow increased 26% this past quarter versus the prior year, and that is really reflective of just the strong earnings and the highly cash-earned businesses that we have, and we'll continue to benefit from that over the coming years. So, yeah, we're confident in being able to scale that over time. Thank you. Thanks, David. The next question is from the line of Jeff Stantial with Stiefel; you may proceed.

Oliver Chow: Opex like I mentioned earlier or R&D to really the key drivers for us as we move forward but.

Jeffrey Austin Stantial: Our free cash flow increased 26% this past quarter versus versus prior year and that is really reflective of just the stronger earnings and a highly cash generative businesses that we have and will continue to benefit from benefit from that over the coming years. So yeah, we're confident in being able to scale that over time.

Jeffrey Austin Stantial: Thank you.

Jeffrey Austin Stantial: Thanks, David.

Oliver Chow: Yeah.

Jeffrey Austin Stantial: The next question is from the line of Jeff <unk> with Stifel. You May proceed.

Operator: The next question is from the line of Jeff Stantial with Stiefel. You may proceed. Thank you. Good afternoon, Matt, and Oliver. Thanks for taking our question.

Jeffrey Austin Stantial: Hey, good afternoon, Matt Oliver Thanks for taking my question.

Jeffrey Austin Stantial: Just one strategic question from us.

Jeffrey Austin Stantial: I'm curious to get your updated views on the M&A landscape really across all three of your segments are you seeing interesting acquisition opportunities out there and if so how are asking prices trended over the last year or so if we start to contemplate higher interest rates for longer.

Jeffrey Austin Stantial: Yes, another great question, and obviously one that comes into the frame when you get the balance sheet under control like we have.

Matthew R. Wilson: Yeah, another great question and obviously one that comes into the frame when you get the balance sheet under control like we have. I would say two words characterize this management team and board over the last two years: it's really focused and disciplined, and I think that's really what this business transformation has all been underpinned by. I think if you look at things that we've done in the space over the last, say, two and a half years, things like the acquisition of Elk and Lightning Box, and iGaming Studios, that's squarely in line with our vision.

Matthew R. Wilson: I would say two words characterize this management team and board over the last two years, and it's really focused and disciplined and I think that's really what this business transformation has all been underpinned by I think if you look at things that we've done in this space over the last two and a half years things like the acquisition of Elk and Lightning box the gaming studios that's <unk>.

Matthew R. Wilson: Clearly in line with that vision I think another thing if you look at the organic expansion of the R&D Studios, I think bringing Kelsey Foster online and building a campus around here in Reno.

Matthew R. Wilson: I think another thing, if you look at the organic expansion of the R&D Studios, I think it's bringing Kelsey Foster online and building a campus around her in Reno, that's another great example of what we're about and what we're interested in, really looking at opportunities that are close to our core. We have a clear north star on who we are and, importantly, who we're not.

Matthew R. Wilson: The Great example of.

Matthew R. Wilson: What we're about and what we are interested in really looking at opportunities that are close to our core we have a clean northstar on who we are and importantly, who would not I mean scientific games was wildly diverse portfolio of assets across lottery and sports and content and land based and digital we've chosen clearly a content strategy, we want to be the leading cross.

Matthew R. Wilson: I mean, Scientific Games was this wildly diverse portfolio of assets across lottery and sports and content and land-based and digital. We've chosen a clear content strategy; we want to be the leading cross-platform global games company, and we'll look and evaluate every M&A target that supports that mission and vision, but we're not in a hurry to go and put a huge amount of complexity back into the portfolio. I think there's a number of people in the industry dealing with complexity as it relates to M&A. We've been through that; it's a lived experience for the team here. That comes with a level of chaos.

Matthew R. Wilson: Platform Global guidance company, and we will look and evaluate every M&A target that supports that mission and vision, but we're not in a hurry to go and put a huge amount of complexity back into the portfolio I think there's a number of people in the industry dealing with complexity as it relates to M&A, we've been through that with the live experience for the team here.

Matthew R. Wilson: That comes with the level of chaos. So we've done a lot of work to cleanup, that's kind of the operating businesses and get this squarely focus at our vision.

Matthew R. Wilson: We've done a lot of work to clean up the operating businesses and get this squarely focused on our vision, so we'll look at assets that help us project that further on, but we're not in a huge hurry to do a splashy piece of M&A.

Matthew R. Wilson: We will look at assets that help us.

Matthew R. Wilson: Project that further on that and not in a huge hurry to do a splashy pace of M&A.

Speaker Change: Great. That's helpful. Thanks, Matt Congrats on a nice quarter.

Operator: Great, that's powerful. Thanks, Matt. Congratulations on a nice score. Thank you. The next question is from the line of Justin Barrett with CLSA. You may proceed.

Justin Barratt: Thank you.

Operator: The next question is from the line of Justin Barrett with CLSA you May proceed.

Operator: Yeah.

Justin Barratt: Hey, guys. Thanks, very much for your time today, you just sort of touch on the balance sheet, but I was just wondering if you could expand.

Justin Barratt: So look your balance sheet.

Justin Barratt: Continue to fill downwards as you generate that.

Justin Barratt: Free cash flow and then also maintain a level of buybacks, but how should we think about.

Justin Barratt: I guess the potential further buybacks beyond this sort of $750 million program and then is there any chance that that.

Justin Barratt: Any forward dividend is reinstated detail.

Justin Barratt: Yes, I'll kick that off and then hand, it to Oliver I think.

Matthew R. Wilson: Yeah, I'll kick that off and then hand it to Oliver. I think the answer is yes to both of those things. I think the organization is on a growth trajectory. We want to continue that, look for ways to invest behind that, both organically and inorganically, to continue that growth profile in perpetuity. We know that's what investors are looking for. We also think when there's dislocations in the share price, it's prudent for us as capital allocators to think about share buybacks.

Matthew R. Wilson: Answer is yes.

Matthew R. Wilson: So both of those things I think that the organization is on a growth trajectory. We want to continue that look for ways to invest behind that both organically and inorganically to continue that growth profile in perpetuity. We know thats. What investors are looking for we also I think when there's dislocations in the share price then it's prudent for us as capital Allocators to think about share buybacks we.

Matthew R. Wilson: We intend to continue to execute through the remaining portion of the $750 million. We'll come back to the market and explain where we go from here, but buybacks at these levels still seem very opportunistic to us. Oliver, anything to add? Yeah, no, I think largely speaking, we're going to...

Matthew R. Wilson: Tend to continue to execute through the remaining.

Oliver Chow: Portion of the 750 million I will come back to the market and explain where do we go from here, but yeah buybacks at these levels still same very opportunistic to us at all or anything to add yes.

Oliver Chow: Yeah, no, I think, largely speaking, you know, we're going to continue to execute to the blueprint, from a capital allocation perspective, and there's really not a whole lot of, I would say, structural changes that we'll make at this point. You know, in Q1, we're now back at the midpoint of our targeted net leverage range, so between 2.5 and 3.5 times, and from that point, you know, share buybacks will absolutely be a key focus for us as we now put a programmatic plan in place, and that includes the potential of tools such as 10B51s and just more systematic repurchases.

Oliver Chow: Largely speaking.

Oliver Chow: We're going to continue to execute to the blueprint from a capital allocation perspective, and there's really not a whole lot of I would say structural changes that will make us at this point in.

Oliver Chow: Q1, we're now back at the midpoint of our targeted net leverage range. So between two and a half and three five times and to Matt's point share buyback will absolutely be a key focus for us as we now put a programmatic plan in place and thats, including the potential of tools, such as <unk> and just more systematic repurchases.

Oliver Chow: <unk>.

Oliver Chow: Matt also mentioned organic investments that are certainly areas of our highest returns that we see and we absolutely see opportunities to continue to invest in talent and in the core business.

Oliver Chow: But yes, I mean from a dividend point of view, we constantly engage and evaluate with the board and really the best use of capitals and uses of our funds to enhance shareholder value. Currently we have no plans to deviate from our capital allocation blueprint, but over the next several years sure dividends can be something that we consider.

Oliver Chow: Matt also mentioned organic investments. That is certainly an area of our highest returns that we see, and we absolutely see opportunities to continue to invest in talent and in the core business. But, yeah, I mean, from a dividends point of view, we constantly engage and evaluate with the board on really the best uses of capital and uses of our funds to enhance shareholder value. You know, currently, we have no plan to deviate from our capital allocation blueprint, but over the next several years, sure, dividends could be something that we consider at some point down the line. Thanks, Matt. The next question is from the line of Paul Mason with Evans and Partners.

Paul Mason: Or at some point down the line.

Oliver Chow: Okay.

Paul Mason: Thanks, a lot.

Oliver Chow: The next question is from the line of Paul Mason with Evans and partners you May proceed.

Operator: The next question is from the line of Paul Mason with Evans and Partners. You may proceed.

Paul Mason: Hi, Jamie.

Operator: Just.

Paul Mason: I wanted to ask about cross platform of it.

Paul Mason: Our land based business has got.

Operator: This is Greg content, that's been coming out Dragon training for against on it looks like some hot games on the horizon as well.

Paul Mason: Could you maybe talk a bit about like the timing of when we might see some of these hit social casino gaming as well.

Paul Mason: Yes. Thanks.

Paul Mason: Yes, I think this is really our company at its best like I said earlier, we chose a strategy of being a content company and then having three businesses in the portfolio that all fed off that same idea of building great franchises and taking it across those three channels Dragon tries a fantastic example started in Australia has moved to.

Matthew R. Wilson: Yeah, I think this is really our company at its best. You know, like I said earlier, we chose a strategy of being a content company and then having three businesses in the portfolio that all fed off that same idea of building great franchises and taking them across these three channels. Dragon Train is a fantastic example, started in Australia, moved to the premium gaming space in the US, you'll see it in the social casino space in June, and you'll see it shortly after that in the iGaming space.

Matthew R. Wilson: Premium gaming ops in the U S. You'll see it in the social casino space in June and Youll see it shortly after that in the gaming space. So really trying to cut down the lag time between building again, the first time and then deploying it across the three channels, we have a CTO Victor Blanca who's working on a platform of J D. K platform called carbon which will allow us to do.

Matthew R. Wilson: So really trying to cut down the lag time between building the game the first time and then deploying it across these three channels. We have our CTO, Victor Blanco, who's working on a platform called Carbon, which will allow us to build a game one time and take that game very efficiently and effectively across all three channels. That's an investment that we're making; it's being worked on at the moment; it's not all the way to production, but when we get it there, we'll update the investment community.

Matthew R. Wilson: And again, one time and take that game very efficiently and effectively across all three channels, that's an investment that we're making.

Matthew R. Wilson: That's being worked on at the moment is not all the way.

Matthew R. Wilson: To production, but when we get there we'll update the investment community, but yes. This is the key to our thesis that we feel great games, we take them across these franchises. We also have for the first time some games coming back to the otherwise so coming from the social casino space onto a land based gaming floor, which is very exciting.

Matthew R. Wilson: But yeah, this is the key to our thesis, that we build great games and take them across these franchises. We also have, for the first time, some games coming back the other way, so coming from the social casino space onto a land-based gaming floor, which is very exciting. And also, we have data going all different ways across the ecosystem, so A, B testing games, rapid asset testing. So yeah, we're really starting to mature in the way we're leaning into those cross-platform opportunities, and you'll start to see a shorter and shorter lag time between a game being built on one channel and being deployed on another. Great, thank you. The next question is from the line of Allan Franklin with Canaccord Genuity.

Matthew R. Wilson: And then also we have the data going.

Matthew R. Wilson: All different ways across across the ecosystem. So AAV testing games rapid assay testing, so we're really starting to <unk>.

Matthew R. Wilson: Matt you're right in the way, we are leaning into those cross platform opportunities and Youll start to see shorter and shorter lag time between a game being built in one channel and being deployed in another.

Allan Franklin: Alright, thank you.

Allan Franklin: The next question is from the line of Alan The Franklin with Canaccord Genuity you May proceed.

Operator: The next question is from the line of Allan Franklin with Canaccord Genuity; you may proceed. Yeah, hey guys, um...

Allan Franklin: Yes, hi, guys.

Allan Franklin: Morning, depending where you are at.

Allan Franklin: Just wanted to touch on the margin dynamics. Please appreciate that there are some steady performance in that quarter for each of the business groups.

Allan Franklin: And also as you just noted first quarter can be seasonally low just how to think about the margin margin progress over the course of the year. Please.

Oliver Chow: Hi Allan. Great, great to hear from you. Yeah, I was very pleased with the results here in Q1. We continue to post very healthy margins, benefiting from our continued focus on efficiencies, and the team could really continue to execute really well here. You know, in gaming, our supply chain and cost initiatives have really helped maintain our strong margins. And going forward, as we further scale our gaming operations installation base, we should continue to see margin scale with that over time. You know, at CyPlay, there will be UA opportunities that will be available to us as we continue to take a prudent approach, as we have this quarter through the campaigns that you all may have seen.

Allan Franklin: Hey, Alan Great Great to hear from you.

Oliver Chow: I was very pleased with the results here in Q1, we continue to post very healthy margins.

Oliver Chow: Benefiting from our continued focus on efficiencies and the team can really continues to execute really well here.

Oliver Chow: In gaming our supply chain and cost initiatives have really helped maintain our strong margins and going forward as we further scale. Our gaming operations installed base, we should continue to see margin scale with that over time at Si play there will be UA opportunities that will be available to us as we can.

Oliver Chow: Tend to take a prudent approach as we have this quarter through the campaigns that you all may have seen but we are laser focused on long term sustainable top and bottom line growth and as we mentioned earlier DTC will be a key factor for us and margin expansion with an Si play.

Oliver Chow: But we are, you know, laser focused on long-term sustainable top and bottom line growth. And as we mentioned earlier, DTC will be a key factor for us in margin expansion within CyPlay. And then in terms of iGaming, margins, we expect them to be fairly steady as we continue to expand on original content while we continue to invest in live casino. And, over time, we do expect margins to expand in that business as we scale with more jurisdictions coming online.

Oliver Chow: And then in terms of I gaming margins.

Oliver Chow: We expect them to be fairly steady as we continue to expand on our original contents. While we continue to invest in live casino overtime, we do expect margins to expand in that business as we scale with with more jurisdictions coming online. So we will have.

Oliver Chow: So we'll have a multitude of opportunities to expand margins over time. And we know we're staying laser focused on our margin enhancement initiatives. You know, our lead management rollout, we're now starting to test robotic automation processes, sharing shared services, and really starting to scale our offerings overall. So yeah, we continue to see opportunities to grow margins while still investing back into the business.

Oliver Chow: Alternative opportunities to expand margins over time.

Oliver Chow: Laser focused on our margin enhancement initiatives lean management rollout, where we're now just starting to test robotic automation processes sharing shared services.

Oliver Chow: Starting to scale our offerings overall, so yes, we continue to see opportunities to to grow margins, while still investing back into the business.

Oliver Chow: Okay.

Speaker Change: Helpful. Thanks.

Speaker Change: Hi, Joe.

Oliver Chow: Okay.

Oliver Chow: There are no additional questions waiting at this time I would now like to pass the conference over to Matt for concluding remarks.

Operator: There are no additional questions waiting at this time. I would now like to pass the conference over to Matt for his concluding remarks. Great, thank you.

Matt: Great. Thank you.

Matthew R. Wilson: Great, thank you. About two years ago, we transformed from a constrained company of scientific games into Light & Wonder, with a bold new vision and differentiated strategy. As we approach the one-year anniversary of our secondary listing on the ASX, we are being recognized as one of the fastest-growing companies in our industry, backed by a world-class people-first culture. To each and every one of you who happen to be a part of this journey, I want to thank you for your dedication as we continue to build upon the solid foundation we have here. I'm incredibly proud to be part of this process, and I look forward to further accomplishments with all of you along the way. Thank you again for joining us.

Matt: Two years ago, we transformed from a constrained company as scientific games into lot and wonder with a bold new vision and differentiated strategy as we approach the one year anniversary of our secondary listing on the ASX, we're getting recognized as one of the fastest growing companies in our industry backed by World class people first culture to each and every one of you.

Operator: That concludes the Light & Wonder 2024 First Quarter Earnings Conference Call. Thank you for your participation, and enjoy the rest of your day.

Operator: It happened to be a part of this journey I want to thank you for your dedication as we continue to build upon the solid foundation, we have I'm incredibly proud to be part of this process and I look forward to further accomplish this with all of you along the way. Thank you again for joining us.

Operator: That concludes the light and wonder.

Operator: For first quarter earnings conference call. Thank you for your participation in image over the rest of your day.