Q2 2024 Light & Wonder Inc Earnings Call

Welcome to the Light & Wonder 2nd Quarter 2024 Earnings Conference Call.

Operator: At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If you'd like to queue for a question, you can do so by pressing star one on your telephone keypad. I'll now turn the call over to Nick Zangari, Senior Vice President of Investor Relations.

Operator: This time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If you'd like to queue for a question, you can do so by pressing star one on your telephone keypad.

At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. I'll now turn the call over to Nick Zangari, Senior Vice President of Investor Relations.

Nick Zangari: I'll now turn the call over to Nick Zangari, Senior Vice President of Investor Relations. Thank you, operator, and welcome everyone to our second quarter 2024 earnings conference call. With me today are Matt Wilson, our President and CEO, and Oliver Chow, our CSO. During today's call, we will discuss our second quarter results and operating performance, followed by a question-and-answer session. Today's call will contain forward-looking statements that may involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call. For information regarding these risks and uncertainties, please refer to our earnings materials.

Nick Zangari: Thank you, operator, and welcome everyone to our second quarter 2024 earnings conference call. With me today are Matt Wilson, our president and CEO, and Oliver Chow, our CFO.

Speaker Change: Thank you, Operator, and welcome everyone to our second quarter 2024 earnings conference call. With me today are Matt Wilson, our President and CEO , and Oliver Chow, our CFO .

Nick Zangari: During today's call, we will discuss our second 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.

Speaker Change: During today's call we will discuss our second quarter results and operating performance, followed by a question and answer session.

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

Speaker Change: 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.

Nick Zangari: Relating to this call posted on our website and our filings with the SEC. We will also discuss certain non-GAAP financial measures. A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings release located in the investor's section of our website. As a reminder, this conference call is being recorded.

Speaker Change: We will also discuss certain non-GAAP financial measures.

Speaker Change: 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: 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 replay of this webcast and accompanying materials will be archived in the investor's section of our website.

Speaker Change: 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.

Matt Wilson: With that, I will now turn the call over to Matt. Thanks, Nick. Hello everyone, and thanks for joining the call. First and foremost, I would like to commend the team on the exceptional results in the quarter and throughout the first half of the year. Our continued double digit consolidated revenue and a EBITDA growth keeps us well on track towards our 2025 target. Momentum remains strong with the industry demonstrating continued stability coming out of 2023, where we saw record gross gaming revenues in the US. In fact, light and wonder scale and leadership position across our businesses enabled us to capitalize on a range of growth opportunities.

Matt Wilson: Nick, hello everyone, and thanks for joining the call. First and foremost, I would like to commend the team on the exceptional results in the quarter and throughout the first half of the year. Our continued double-digit consolidated revenue and EBITDA growth keeps us well on track towards our 2025 targets. Momentum remains strong, with the industry demonstrating continued stability coming out of 2023, when we saw record gross gaming revenues in the US. In fact, Light & Wonder's scale and leadership position across our businesses have enabled us to capitalise on a range of growth opportunities.

Speaker Change: With that, I will now turn the call over to Matt.

Matt Wilson: Thanks, Nick.

Matt Wilson: Hello everyone and thanks for joining the call. First and foremost, I would like to commend the team on the exceptional results in the quarter and throughout the first half of the year. Our continued double-digit consolidated revenue and EBITDA growth keeps us well on track towards our 2025 target.

Matt Wilson: Momentum remains strong with the industry demonstrating continued stability coming out of 2023, where we saw record gross gaming revenues in the US. In fact, Light & Wonder's scale and leadership position across our businesses enabled us to capitalise on a range of growth opportunities.

Matt Wilson: We are well positioned with our global presence, extensive library of proven game franchises, diversified casino product portfolio, and unique cross platform strategy to execute on future prospects in both land based and digital sessions. In addition to our strong operational and financial execution, I would also like to highlight a couple of other noteworthy achievements. In June, we completed the company's first ever share repurchased program in just a little over two years and authorised a new three year $1 billion buyback program as we continue to see tremendous value in Light and Wonder. Our CSR and ESG efforts are also progressing as we continue to execute on the diverse set of initiatives that were highlighted in our recently published CSR report.

Matt Wilson: We are well-positioned with our global presence, extensive library of proven game franchises, diversified casino product portfolio, and unique cross-platform strategy to execute on future prospects in both land-based and digital gaming. In addition to our strong operational and financial expertise, I'd also like to highlight a couple of other noteworthy achievements. In June, we completed the company's first ever share repurchase program in just a little over two years and authorized a new three-year $1 billion buyback program as we continue to see tremendous value in Light & Wonder.

Matt Wilson: We are well positioned with our global presence, extensive library of proven game franchises, diversified casino product portfolio and unique cross-platform strategy to execute on future prospects in both land-based and digital spectrums.

Matt Wilson: In addition to our strong operational and financial execution,

Matt Wilson: I'd also like to highlight a couple of other noteworthy achievements.

Matt Wilson: In June , we completed the company's first ever share repurchase program in just a little over two years and authorized a new three-year $1 billion buyback program as we continue to see tremendous value in Light & Wonder.

Matt Wilson: Our CSR and ESG efforts are also progressing as we continue to execute on the diverse set of initiatives that were highlighted in our recently published CSR report. The all-around effort we are seeing across the organization is a true testament to the culture and people driving our success. Additionally, we have a clear strategy underpinned by a robust product roadmap which will further fuel our growth. With that, let's look at the operational highlights.

Matt Wilson: Our CSR and ESG efforts are also progressing as we continue to execute on the diverse set of initiatives that were highlighted in our recently published CSR report.

Matt Wilson: The all around effort we have seen across the organization is a true testament to the culture and people driving our success. Additionally, we have a clear strategy underpinned by a robust product roadmap, which will further fuel our growth.

Matt Wilson: The all-around effort we are seeing across the organisation is a true testament to the culture and people driving our success. Additionally, we have a clear strategy underpinned by a robust product roadmap which will further fuel our growth.

Matt Wilson: With that, let's look at the operational highlights. In gaming, we continue to see strong momentum and solid execution on our commercial strategy. Our performance reflects the power of the portfolio where franchise success can be replicated and leveraged across markets and business models. To put this in perspective, our North American premium install base has grown for 16 consecutive quarters and now is at approximately 50% of our total North American install base. Yes, we added over a thousand units sequentially in North America on the back of our evergreen franchises, with revenue per day to pass in the $50.

Matt Wilson: In gaming, we continue to see strong momentum and solid execution on our commercial strategy. Our performance reflects the power of the portfolio, where franchise success can be replicated and leveraged across markets and business models. To put this in perspective, our North American premium install base has grown for 16 consecutive quarters and now is at approximately 50% of our total North American install base. We added over 1,000 units sequentially in North America on the back of our evergreen franchises, with revenue per day surpassing the $50 mark.

Speaker Change: With that, let's look at the operational highlights.

Speaker Change: In gaming, we continue to see strong momentum and solid execution on our commercial strategy. Our performance reflects the power of the portfolio, where franchise success can be replicated and leveraged across markets and business models.

Speaker Change: To put this in perspective, our North American premium install base has grown for 16 consecutive quarters and now is at approximately 50% of our total North American install base. We added over 1000 units sequentially in North America on the back of our evergreen franchises with revenue per day surpassing the $50 mark.

Matt Wilson: Mark. Our Dancing Drums, Ultimate Firelink, Journey to Planet Mola, Dragon Train, and Monsters franchises remain strong performers, providing a solid foundation to our fleet. We anticipated Kate's role at the second half with titles such as Squid Game, which we recently launched, and Huff and Puff Money Manches, a game extension of our highly successful for sale franchise that's been introduced under the least model to drive growth beyond 2024. Given the time of new title launches, we saw record North American install-based additions in the second quarter. Going forward, we expect continued elevated unit growth in the second half of the year, but at a more measured pace relative to the second quarter addition.

Matt Wilson: Our Dancing Drums, Ultimate Firelink, Journey to Planet Moolah, Dragontrain, and Monsters franchises remain strong performers, providing a solid foundation for our fleet. We anticipate a cadenced rollout in the second half with titles such as Squid Game, which we've recently launched, and Huff & Puff Money Mansion, a game extension of our highly successful for sale franchise that's been introduced under the lease model Given the timing of new title launches, we saw record North American install base additions in the second quarter.

Speaker Change: Our Dancing Drums, Ultimate Firelink, Journey to Planet Moolah, Dragontrain and Monsters franchises remain strong performers, providing a solid foundation to our fleet.

Speaker Change: We anticipate a cadence rollout in the second half with titles such as Squid Game, which we recently launched, and Huff & Puff Money Mansion, a game extension of our highly successful for sale franchise that's been introduced under the lease model to drive growth beyond 2024.

Speaker Change: Given the timing of new title launches, we saw record North American install base additions in the second quarter. Going forward, we expect continued elevated unit growth in the second half of the year, but at a more measured pace relative to the second quarter additions.

Matt Wilson: Going forward, we expect continued elevated unit growth in the second half of the year, but at a more measured pace relative to the second quarter of December. On the game sales side, we saw continued momentum in both North America and international, with over 11,300 units shipped in the quarter worldwide. In addition to our North American core replacements, we also capitalized on adjacent market growth opportunities in the quarter. In fact, the performance of our games was so well received that Oregon Lottery followed up with a second order of 1,200 units less than a year after the initial shipment, reflecting our strength and continued progress in the Video Lottery March.

Matt Wilson: On the game South Side, we saw continued momentum in both North America and international, with over 11,300 units shipped in the quarter globally. In addition to our North American call replacement, we also capitalise on adjacent market growth opportunities in the quarter. In fact, the performance of our games was so well received that Oregon Lottery followed up with the second order of 1,200 units less than a year after the initial shipment, reflecting our strengths and continued progress in the video lottery market. Additionally, we've made significant progress in the coin-operated amusing machines and historical horse racing markets, both of which are growing opportunities for us as we deploy more engaging game content across the board.

Speaker Change: On the game sales side, we saw continued momentum in both North America and international, with over 11,300 units shipped in the quarter globally. In addition to our North American core replacements, we also capitalised on adjacent market growth opportunities in the quarter.

Speaker Change: In fact, the performance of our games was so well received that Oregon Lottery followed up with a second order of 1,200 units less than a year after the initial shipment, reflecting our strength and continued progress in the video lottery markets.

Speaker Change: Additionally, we've made significant progress in the coin-operated amusement machines and historical horse racing markets, both of which are growing opportunities for us as we deploy more engaging game content across the board.

Matt Wilson: The strength of our game content is on display, with light and wonder taking three of the top five top indexing call games in the latest audit report. Puff and even more puffs retain the number one spot, again with even more units on the floor, and our quick hit games rounded out the top rankings on the chart. Pleasantly, our shipyard in Australia was once again number one in the quarter, and we looked to extend this momentum through new games and extensions such as Shen Long, Unleashed, and Jewel of the Dragon. Our strong international presence is also reflected in the continued sales in Macau and the UK, where we have a long-standing partnership with Entane.

Matt Wilson: The strength of our game content is on display, with Light & Wonder taking three of the top five top indexing core games in the latest Artist Report. Puff and even more Puffs retained the number one spot, again with even more units on the floor, and our Quick Hit games rounded out the top rankings on the chart.

Speaker Change: The strength of our game content is on display, with Light & Wonder taking 3 of the top 5 top indexing core games in the latest Artist Report. Puff and even more Puff retained the number 1 spot, again with even more units on the floor, and our quick hit games rounded out the top rankings on the chart.

Matt Wilson: Fortunately, our ship share in Australia was once again number one in the quarter, and we look to extend this momentum through new games and extensions such as Shenlong Unleashed and Jewel of the Dragon. Our strong international presence is also reflected in continued sales in Macau and the UK, where we have a long-standing partnership with Entame. These are all examples of the benefit of our global reach and diverse end markets fueling continued momentum in game sales.

Speaker Change: Pleasingly, our ship share in Australia was once again number one in the quarter, and we look to extend this momentum through new games and extensions such as Shenlong Unleashed and Jewel of the Dragon.

Speaker Change: Our strong international presence is also reflected in the continued sales in Macau and the UK, where we have a long-standing partnership with Entame.

Matt Wilson: These are all examples of the benefit of our global reach and diverse end markets, fueling continued momentum in game sales. In the systems business, we continue to drive progress through product capabilities and enhancements, which has led to contract win as well as hardware replacement opportunities. As the leading global system provider, we will continue to innovate and integrate our software and hardware to provide operators with best-in-class solutions to run their operations efficiently. We continue to see stability in our core tables business, and we are currently working on several initiatives which will elevate our product offerings in the future.

Speaker Change: These are all examples of the benefit of our global reach and diverse end markets, fueling continued momentum in game sales.

Matt Wilson: In the systems business, we continue to drive progress through product capability enhancements, which has led to contract wins as well as hardware replacement opportunities. As a leading global systems provider, we will continue to innovate and integrate our software and hardware to provide operators with best-in-class solutions to run their operations efficiently. We continue to see stability in our core table business, and we are currently working on several initiatives which will elevate our product offerings in the future.

Speaker Change: In the systems business, we continue to drive progress through product capabilities enhancements, which has led to contract wins as well as hardware replacement opportunities.

Speaker Change: As a leading global systems provider, we will continue to innovate and integrate our software and hardware to provide operators with best-in-class solutions to run their operations efficiently.

Speaker Change: We continue to see stability in our core tables business and we are currently working on several initiatives which will elevate our product offerings in the future.

Matt Wilson: Our diversified gaming portfolio is providing growing revenue streams to fuel investment in the business, supported by sustained momentum as evidenced by our continued expansion in key markets. Our performance reflects a true inflection point, and we expect to build on this momentum as we continue to expand and build out our studios and franchises. On to CyFlay, where once again our team executed seamlessly on its growth and margin initiatives, delivering over $200 million in quarterly revenue for the third consecutive period. We've outpaced the social percentage market for 10 consecutive quarters, with now 11% market share driven by our operational prowess to grow gains and prudent approach to user acquisition. Our philosophy here remains the same.

Matt Wilson: Our diversified gaming portfolio is providing growing revenue streams to fuel investment in the business, supported by sustained momentum as evidenced by our continued expansion in game markets. Our performance reflects a true inflation point, and we expect to build on this momentum as we continue to expand and build out our studios and franchises.

Speaker Change: Our diversified gaming portfolio is providing growing revenue streams to fuel investment in the business, supported by sustained momentum as evidenced by our continued expansion in key markets.

Speaker Change: Our performance reflects a true inflection point, and we expect to build on this momentum as we continue to expand and build out our studios and franchises.

Matt Wilson: On the siteway, where once again our team executed seamlessly on its growth and margin initiatives, delivering over 200 million in quarterly revenue for the third consecutive period. We've outpaced the social presenter market for 10 consecutive quarters, with now 11% market share driven by our operational prowess to grow game and prudent approach to user acquisition. Our philosophy here remains the same. We will be diligent and smart with UASBAN, focusing on returns, and we'll look at incremental campaigns and other opportunities as they arise. Additionally, the Siteway engine will continue to do what it does best: optimise player engagement to enhance the player's experience.

Speaker Change: On to SightWay, where once again our team executed seamlessly on its growth and margin initiatives, delivering over $200 million in quarterly revenue for the third consecutive period.

Speaker Change: We've outpaced the social casino market for 10 consecutive quarters, with now 11% market share driven by our operational prowess to grow gains and prudent approach to user acquisition.

Matt Wilson: We will be diligent and smart with UASpend, focusing on returns, and we'll look at incremental campaigns and other opportunities as they arise. Additionally, the Cycler engine will continue to do what it does best, optimizing player engagement to enhance the player experience, backed by our library of proven franchises and games. We've consistently delivered a product offering that improves monetization, as we've seen in our performance. In fact, we continue to see record monetization numbers in average monthly revenue per paying user and average revenue per daily active user. Both metrics were double digits compared to the prior year period as we continue on the trajectory of sustainable monetization growth.

Speaker Change: Our philosophy here remains the same. We will be diligent and smart with UASpend, focusing on returns, and will look at incremental campaigns and other opportunities as they arise. Additionally, the Cycler engine will continue to do what it does best, optimise player engagement to enhance the player experience.

Matt Wilson: Backed by our library of proven franchises and games, we've consistently delivered a product offering that improves monetization, as we've seen in our performance. In fact, we continue to see record monetization numbers in average monthly revenue per paying user and average revenue per daily active user. Both metrics through double digits compared to the prior year period as we continue on the trajectory of sustainable monetization growth. Notably, we're also seeing solid omnichannel progress with the successful launch of franchises such as Huff & Puff globally. The cross-platform exposure from our coveted franchises and games enables cost-effective player acquisition, allowing further flexibility to execute on our expansion initiatives.

Speaker Change: backed by our library of proven franchises and games.

Speaker Change: We've consistently delivered a product offering that improves monetization, as we've seen in our performance.

Speaker Change: In fact, we continue to see record monetization numbers in average monthly revenue per paying user and average revenue per daily active user.

Speaker Change: Both metrics grew double digits compared to the prior year period as we continue on the trajectory of sustainable monetization growth.

Matt Wilson: Notably, we're also seeing solid omni-channel progress with the successful launch of franchises such as Huff & Puff globally. The cross-platform exposure from our coveted franchises and games enables cost-effective player acquisition, allowing further flexibility to execute on our expansion initiatives. Meanwhile, our direct-to-consumer platform is progressing nicely, as revenue generated this quarter is now approximately 12% of Cyplay's total revenue. As I've mentioned previously, we have a deliberate strategy with the rollout, and we are pleased with the progress here as we wrap up our initial phase of the program.

Speaker Change: Notably, we're also seeing solid omni-channel progress with the successful launch of franchises such as Huff & Puff globally.

Speaker Change: The cross-platform exposure from our coveted franchises and games enables cost-effective player acquisition, allowing further flexibility to execute on our expansion initiatives.

Matt Wilson: Meanwhile, our direct consumer platform is progressing nicely, as revenue generated this quarter is now approximately 12% of cyclist total revenue. As I've mentioned previously, we have a deliberate strategy with the rollout. We are pleased with the progress here as we wrap up our initial phase of the program. The user feedback we received was instrumental in the development of the platform, and we will continue to prudently expand this offering to a broader base of players in phases and scale at an appropriate pace for customer engagement as part of our long-term initiatives. While we've made significant strides on the rollout this year, we would expect a more limited growth in DTC as the percentage of revenue in the back half of the year, given the cadence of our rollout across games.

Speaker Change: Meanwhile, our direct-to-consumer platform is progressing nicely, as revenue generated this quarter is now approximately 12% of SightWay's total revenue.

Speaker Change: As I've mentioned previously, we have a deliberate strategy with the rollout, and we are pleased with the progress here as we wrap up our initial phase of the program.

Matt Wilson: The user feedback we received was instrumental in the development of the platform, and we will continue to prudently expand this offering to a broader base of players in phases and scale at an appropriate pace for customer engagement as part of our long-term initiative. While we've made significant strides on the rollout this year, we would expect a more limited growth in DTC as a percentage of revenue in the back half of the year, given the cadence of our rollout across games.

Speaker Change: The user feedback we received was instrumental in the development of the platform and we will continue to prudently expand this offering to a broader base of players in phases and scale at an appropriate pace for customer engagement as part of our long-term initiative.

Speaker Change: While we've made significant strides on the rollout this year, we would expect a more limited growth in DTC as the percentage of revenue in the back half of the year given the cadence of our rollout across games.

Matt Wilson: The success at cyclist has been phenomenal, and we continue to execute on our user acquisition, engagement, and monetization blueprint, while planning for new games and driving learning for our expansion in AdTech.

Matt Wilson: The success at CyPlay has been phenomenal, and we continue to execute on our user acquisition, engagement, and monetization blueprint while planning for new games and driving learning for our expansion in our team. Turning to iGaming, where we continue to see healthy growth across all U.S. states and scaling of our content on our open gaming system platform, driving uplifts compared to the prior year period. The OGS platform continues to deliver record gross gaming revenue volumes in the U.S. and Canada, as we saw year-over-year increases of 25% in both regions.

Speaker Change: The success at SyPlay has been phenomenal and we continue to execute on our user acquisition, engagement and monetization blueprint while planning for new games and driving learnings for our expansion in ad tech.

Matt Wilson: Turning to eye gaming, where we continue to see healthy growth across all U.S. states and scaling of our content on our open gaming system platform driving up lists compared to the prior year periods. The OGS platform continues to deliver record growth gaming revenue volumes in the U.S. and Canada as we saw year-over-year increases of 25% in both regions. In the more mature UK and EU markets, we've worked hand-in-hand with our partners and navigated changing dynamics in the market well, demonstrating our adaptability and strength of our regionalized market-to-changed content. Importantly, our experience and first mover advantage in the industry continues to differentiate our products as we build and expand our offerings, such as enhanced marketing capabilities to improve player engagement and experience for operators.

Speaker Change: Turning to iGaming, where we continue to see healthy growth across all US states and scaling of our content on our open gaming system platform driving uplifts compared to the prior year period.

Speaker Change: The OGS platform continues to deliver record gross gaming revenue volumes in the US and Canada as we saw year-over-year increases of 25% in both regions.

Matt Wilson: In the more mature UK and EU markets, we've worked hand in hand with our partners and navigated changing dynamics in the market well, demonstrating our adaptability and strength of our regionalized, market-attuned concept. Importantly, our experience and first-mover advantage in the industry continue to differentiate our products as we build and expand our offerings, such as enhanced marketing capabilities to improve player engagement and experience for operators. As previously noted, the scale of OGS is second to none.

Speaker Change: In the more mature UK and EU markets, we've worked hand-in-hand with our partners and navigated changing dynamics in the market well, demonstrating our adaptability and strength of our regionalised market attuned content.

Speaker Change: Importantly, our experience and first mover advantage in the industry continues to differentiate our products as we build and expand our offerings such as enhanced marketing capabilities to improve player engagement and experience for operators.

Matt Wilson: As previously noted, the scale of OGS is second to none. We now have over 85 partner studios and 570 operator brands plugged into OGS and continue to extend our reach into all legalized jurisdictions with our two-sided network, making the best games available to players. Lightning Box, Elk, PlayZero, and our LightCoceno offering are just some of the examples where we are expanding the network and our product portfolio for all parties in the eye gaming space. While plug-and-place studios such as Lightning Box and Elk are more readily available to scale for immediate success, we're equally excited about the long-term prospects of PlayZero, which is now live in three major U.S.

Matt Wilson: We now have over 85 partner studios and 570 operator brands plugged into OGS and continue to extend our reach into all legalised jurisdictions, with our two-sided network making the best games available to players. Lightning Box, Elk, Playzito and our Live Casino offering are just some of the examples where we are expanding the network and our product portfolio for all parties in the iGaming, While plug-and-play studios such as Lightning Box and Elk are more readily available to scale for immediate success, we're equally excited about the long-term prospects of Playzito, which is now live in three major US iGaming states, and Live Casino, where we continue to expand our partnerships as we go live with Penn in the back half of the year.

Speaker Change: As previously noted, the scale of OGS is second to none. We now have over 85 partner studios and 570 operator brands plugged into OGS and continue to extend our reach into all legalised jurisdictions.

Speaker Change: with our two-sided network making the best games available to players. Lightning Box, Elk, Playzito and our live casino offering are just some of the examples where we are expanding the network and our product portfolio for all parties in the iGaming space.

Speaker Change: While plug-and-play studios such as Lightningbox and Elk are more readily available to scale for immediate success.

Speaker Change: We're equally excited about the long-term prospects of Playzito, which is now live in three major US iGaming states, and Live Casino, where we continue to expand our partnerships as we go live with Penn in the back half of the year.

Matt Wilson: eye-gaming states, and LightCoceno where we continue to expand our partnerships as we go live with Penn in the back half of the year. We are confident the investments into our eye gaming portfolio will ultimately bear fruit with the support of our team folks. We will continue to leverage our leadership position and expand our robust portfolio to capitalize on the opportunities that the fastest growing gaming sector presents.

Matt Wilson: We are confident the investments into our iGaming portfolio will ultimately bear fruit with the support of our team's focused experts. We will continue to leverage our leadership position and expand our robust portfolio to capitalise on the opportunities that the fastest growing gaming sector presents us. As we move past the halfway mark of 2024, I am more confident than ever in the team's execution of the plan and product roadmap. Our cross-platform strategy fully accentuates the power of our portfolio as we continue to see our brands and franchise expand across land-based, social, and iGaming channels.

Speaker Change: We are confident the investments into our iGaming portfolio will ultimately bear fruit with the support of our team's focused execution.

Speaker Change: yeah

Speaker Change: We will continue to leverage our leadership position and expand our robust portfolio to capitalise on the opportunities that the fastest growing gaming sector presents us.

Matt Wilson: As we move past the halfway mark in 2024, I am more confident than ever in the team's execution to plan and product roadmap. Our cross-platform strategy fully accentuates the power of our portfolio as we continue to see our brands and franchise expand across land-based, social, and eye-gaming channels. Notably, we are in an enviable position with our global presence of scale, which is key to sustainability in the industry. We will continue to focus on R&D investment and innovation to elevate the overall gaming experience, which will ultimately translate into growing market share. As many of you have heard me say before, although our outstanding team continues to deliver quarter after quarter, we are still in the early stages of growth across that business, and the best that lot in Wanda is yet to come.

Speaker Change: As we move past the halfway mark of 2024, I am more confident than ever in the team's execution of the plan and product roadmap.

Speaker Change: Our cross-platform strategy fully accentuates the power of our portfolio as we continue to see our brands and franchise expand across land-based, social and iGaming channels.

Matt Wilson: Notably, we are in an ambivalent position with our global presence and scale, which is key to sustainability in the industry. We will continue to focus on R&D investment and innovation to elevate the overall gaming experience, which will ultimately translate into growing market share. As many of you have heard me say before, although our outstanding team continues to deliver quarter after quarter, we are still in the early stages of growth across our business, and the best at Light & Wonder is yet to come. With that, I'll turn it over to Oliver to review our quarterly financial results.

Speaker Change: Notably, we are in an ambivalent position with our global presence and scale, which is key to sustainability in the industry.

Speaker Change: We will continue to focus on R&D investment and innovation to elevate the overall gaming experience, which will ultimately translate into growing market share.

Speaker Change: As many of you have heard me say before, although our outstanding team continues to deliver quarter after quarter, we are still in the early stages of growth across our business, and the best at Light & Wonder is yet to come. With that, I'll turn it over to Oliver to review our quarterly financial results.

Oliver Chow: With that, I will turn it out to all of us to review our quarterly financial results.

Oliver Chow: Thanks, Matt. Glad to be with you all on the call today to share our Q2 results. We have continued to execute and deliver tangible progress, quarter after quarter, especially against our key financial performance metrics as we work towards our target. This consistency is a hallmark of our organization and speaks volumes to the high standards we hold ourselves to.

Oliver Chow: Thanks, Matt. Glad to be with you all in the call today to share our Q2 results. We have continued to execute and deliver tangible progress quarter after quarter, especially against our key financial performance metrics as we work towards our target. This consistency is a hallmark of our organization and speaks volumes to the high standards we hold ourselves to. Continuing on the strong momentum that we began the year with, this quarter marks our eighth consecutive quarter of double-digit consolidated revenue growth, as consolidated revenue increased 12 percent year over year to $818 million, driven by performance across all businesses.

Matt Wilson: thanks matt glad to be with you all in the call today to share our q two results

Speaker Change: We have continued to execute and deliver tangible progress quarter after quarter, especially against our key financial performance metrics as we work towards our target.

Speaker Change: This consistency is a hallmark of our organization and speaks volumes to the high standards we hold ourselves to.

Oliver Chow: Continuing on the strong momentum that we began the year with, this quarter marks our eighth consecutive quarter of double-digit consolidated revenue growth, as consolidated revenue increased 12% year-over-year to $818 million, driven by performance across all businesses. Operating income was $175 million in the quarter, an increase of $62 million over the prior year, primarily due to the higher revenue and stronger margins we saw, along with lower DNA, which was slightly offset by higher restructuring and other costs, which included a $32 million charge in the current year period related to certain legal matters.

Speaker Change: Continuing on the strong momentum that we began the year with, this quarter marks our eighth consecutive quarter of double-digit consolidated revenue growth, as consolidated revenue increased 12% year-over-year to $818 million.

Oliver Chow: Operating income was $175 million in the quarter, an increase of $62 million over the prior year, primarily due to the higher revenue and stronger margins we saw, along with lower DNA, which was slightly offset by higher restructuring and other costs, which included a $32 million charge in the current year period related to certain legal matters. Consolidated AEBDA grew 17 percent to $330 million compared to the prior year, resulting in a consolidated AEBDA margin of 40 percent for the quarter, on solid top line growth and margin contribution from gaming and Sideplay. Adjusted MPATA increased 40 percent year over year to $130 million in the quarter, primarily on revenue growth across businesses and margin expansion.

Speaker Change: driven by performance across all businesses.

Speaker Change: Operating income was $175 million in the quarter.

Speaker Change: an increase of $62 million over the prior year, primarily due to the higher revenue and stronger margins we saw, along with lower DNA.

Speaker Change: which was slightly offset by higher restructuring and other costs, which included a $32 million charge in the current year period related to certain legal matters.

Oliver Chow: Consolidated EBITDA grew 17% to $330 million compared to the prior year, resulting in a consolidated EBITDA margin of 40%, on solid top-line growth and margin contribution from gaming and cyber. Adjusted MPAT-A increased 40% year over year to $130 million in the quarter, primarily on revenue growth across businesses and margin expansion.

Speaker Change: Consolidated AEBDA grew 17% to $330 million compared to the prior year, resulting in a consolidated AEBDA margin of 40% for the quarter.

Speaker Change: on solid top-line growth and margin contribution from gaming and side-play.

Speaker Change: Adjusted MPAT-A increased 40% year-over-year to $130 million in the quarter, primarily on revenue growth across businesses and margin expansion.

Oliver Chow: Turning to our business segments, in gaming, we continued to see strong financial and KPI momentum, underpinned by the execution of our game franchises and diversified product offering. Revenue was up 14 percent to $539 million in the quarter, led by global gaming machine sales growth of 32 percent and gaming systems growth of 14 percent. AEBDA grew 17 percent to $272 million compared to prior year, driven by revenue growth in the period. Gaining AEBDA margin increased 100 basis points year over year to 50 percent in the quarter, as we further optimized operations for margin. We do expect the modest impact of margins in the third quarter related to the announced and Tain deal.

Oliver Chow: Turning to our business segment, in gaming, we continue to see strong financial and KPI momentum underpinned by the execution of our game franchises and diversified product offerings. Revenue was up 14% to $539 million in the quarter, led by global gaming machine sales growth of 32% and gaming systems growth of 14%. AEPA grew 17% to $272 million compared to the prior year, driven by revenue growth in the period. Gaming EBITDA margin increased 100 basis points year over year to 50% in the quarter, as we further optimized operations for margin. We do expect a modest impact on margins in the third quarter related to the announced and attained deal. This order is a great example of the benefit of our global footprint and the upside that comes from the quality of the product that the team is producing.

Speaker Change: Turning to our business segments.

Speaker Change: In gaming, we continue to see strong financial and KPI momentum underpinned by the execution of our game franchises and diversified product offering.

Speaker Change: Revenue was up 14% to $539 million in the quarter, led by global gaming machine sales growth of 32% and gaming systems growth of 14%.

Speaker Change: AEPA grew 17% to $272 million compared to prior year, driven by revenue growth in the period.

Speaker Change: Gaming a EBITDA margin increased 100 basis points year-over-year to 50% in the quarter as we further optimized operations for margin opportunities.

Speaker Change: We do expect a modest impact of margins in the third quarter related to the announced and attained deal.

Oliver Chow: This order is a great example of the benefit of our global footprint and the upside that comes from the quality of the product that the team is producing. It is noteworthy that the bulk of these units will be delivered in the third quarter at a lower ASP but has a recurring revenue component moving forward, making this a great long-term value for the company. Gaming operations revenue increased 5% year-over-year as we continue to see growth in the North American install base, up 7% to 32,566 units, representing a true inflection point in the quarterly install base growth rate for us, led by the increase in our premium and Class Two footprint.

Speaker Change: This order is a great example of the benefit of our global footprint and the upside that comes from the quality of the product that the team is producing.

Oliver Chow: It is noteworthy that the bulk of these units will be delivered in the third quarter at a lower ASP but will have a recurring revenue component moving forward, making this a great long-term value for the company. Gaming operations revenue increased 5% year over year as we continue to see growth in North American installed of 7% to 32,566 units, representing a true inflection point in the quarterly install-based growth rate for us, led by the increase in our premium and Class 2 football.

Speaker Change: It is noteworthy that the bulk of these units will be delivered in the third quarter at a lower ASP, but has a recurring revenue component moving forward, making this a great long-term value for the company.

Speaker Change: Gaming operations revenue increased 5% year-over-year as we continue to see growth in the North American install base of 7% to 32,566 units, representing a true inflection point in the quarterly install base growth rate for us.

Oliver Chow: Revenue per day rose 4% year-over-year, both in North America and internationally, with North America breaking the $50 mark, reflecting the strong performance of our games and the progress on install-based optimization. We continue to execute on our strategy on the global game self, with revenue up 32%, primarily driven by sales in Australia and Macau, as well as expansion in the North American adjacent markets with the Canada and Oregon VLT, Georgia COAM, and HHR markets.

Oliver Chow: Revenue per day rose 4% year-over-year, both in North America and international, with North America breaking the $50 mark, reflecting the strong performance of our games and the progress on the install base optimization. We continue to execute on our strategy on the global game sales front, with revenue of 32%, primarily driven by sales in Australia and Macau, as well as expansion in the North American adjacent markets, with the Canada and Oregon VLT, Georgia CoM, and HHR markets. Importantly, our global gaming presence is on full display, as international unit shipments increased 33% to over 5,500 units, with North America up 16% year-over-year to over 5,800 units.

Speaker Change: led by the increase in our premium and Class 2 footprint.

Speaker Change: Revenue per day rose 4% year-over-year, both in North America and international, with North America breaking the $50 mark, reflecting the strong performance of our games and the progress on the install-based optimization.

Speaker Change: We continue to execute on our strategy on the global game sales front.

Speaker Change: with revenue up 32%, primarily driven by sales in Australia and Macau, as well as expansion in the North American adjacent markets with the Canada and Oregon VLT, Georgia COAM, and HHR markets.

Oliver Chow: Importantly, our global gaming presence is on full display as international unit shipments increased 33% to over 5,500 units, with North America up 16% year-over-year to over 5,800 units. Global average selling price also increased 6% to over $18,500 compared to the prior year.

Speaker Change: Importantly, our global gaming presence is on full display, as international unit shipments increase 33% to over 5,500 units, with North America up 16% year-over-year to over 5,800 units.

Oliver Chow: Global average selling price also increased 6% to over $18,500 compared to prior year. Systems revenue in the quarter increased 14% year-over-year, primarily on strong hardware upgrade sales to existing customers and expansion of our software offering to an operator partner in Asia.

Speaker Change: Global average selling price also increased 6% to over $18,500 compared to prior year.

Oliver Chow: Systems revenue in the quarter increased 14% year over year, primarily due to strong hardware upgrade sales to existing customers and expansion of our software offering to an operator partner in Asia. Lastly, table products revenue was impacted due to the timing of elevated utility sales in the prior year. Overall, I am pleased with the operational excellence from the team as we continue to achieve and exceed our KPI and financial milestones underpinned by the breadth and depth of our product portfolio and our global reach. Turning to SidePlay, where we saw continued performance as the team once again delivered above-market growth while executing on key growth initiatives.

Speaker Change: Systems revenue in the quarter increased 14% year-over-year, primarily on strong hardware upgrade sales to existing customers and expansion of our software offering to an operator partner in Asia.

Oliver Chow: Lastly, table product revenue was impacted due to timing of elevated utility sales in the employees with the operational excellence from the team as we continue to achieve and exceed our KPI and financial milestones, underpinned by the breadth and depth of our product portfolio and our global scale. Turning to sideplay, where we saw continued performance as the team once again delivered above-market growth, while executing on key growth initiatives. Revenue increased 8% year-over-year to $205 million, driven by continued growth in our four largest social casino games. In addition to top-line growth and discipline, user acquisition spent, which I will note is typically lower during the second quarter of the year, our direct consumer platform generated $24 million, or approximately 12% of Sideplay's revenue in the quarter, which drove a 19% year-over-year increase in AEBDA to $70 million, with AEBDA margin of 300 basis points to 34%.

Speaker Change: Lastly, table products revenue was impacted due to timing of elevated utility sales in the prior year.

Speaker Change: overall i am pleased with the operational exceence from the team as we continue to achieve and exceed our pi and financial milestones underpinned by the breadth and depths of our product portfolio and our global scale

Speaker Change: Turning to side play, where we saw continued performance as the team once again delivered above-market growth while executing on key growth initiatives.

Oliver Chow: Revenue increased 8% year-over-year to $205 million, driven by continued growth in our four largest social casino games. In addition to top-line growth and disciplined user acquisition spend, which I will note is typically lower during the second quarter of the year.

Speaker Change: Revenue increased 8% year-over-year to 205 million dollars driven by continued growth and our four largest social casino games.

Speaker Change: In addition to top-line growth and disciplined user acquisition spend, which I will note is typically lower during the second quarter of the year.

Oliver Chow: Our direct consumer platform generated $24 million, or approximately 12% of SidePlay's revenue in the, which drove a 19% year-over-year increase in AEPDA to $70 million, with AEPDA margin up 300 basis points to 34%. We continue to deliver strong monetization metrics across the board, with average revenue per daily active user of $1.04 in the quarter, a 12% increase year-over-year, and average monthly revenue per paying user approaching $117, a 15% increase over the prior year period, both record highs as we continue to bring the best gaming experience to our players through our portfolio of games.

Speaker Change: Our direct-to-consumer platform generated $24 million, or approximately 12% of SidePlay's revenue in the quarter.

Speaker Change: which drove a 19% year-over-year increase in AEPDA to $70 million with AEPDA margin up 300 basis points to 34%.

Oliver Chow: We continue to deliver strong monetization metrics across the board, with average revenue per daily active user of a dollar and four cents in the Carter, a 12% increase year-to-year, an average monthly revenue-per-paying user approaching $117, a 15% increase over a prior year period, both record highs as we continue to bring the best gaming experience to our players through our portfolio of games. That said, we see the opportunity to potentially lean into high-return marketing initiatives in the second half of the year. As we further invest and refine our user acquisition, engagement, and monetization flywheel, we will continue to invest in UI spend as needed and reassess if we are not seeing the returns above our threshold.

Speaker Change: We continue to deliver strong monetization metrics across the board with average revenue per daily active user of $1.04 in the quarter.

Speaker Change: A 12% increase year-over-year, and average monthly revenue per paying user approaching $117. A 15% increase over prior year period. Both record highs as we continue to bring the best gaming experience to our players through our portfolio of games.

Oliver Chow: That said, we see the opportunity to potentially lean into high-return marketing initiatives in the second half of the year, as we further invest in and refine our user acquisition, engagement, and monetization flyways. We will continue to invest in U.H.

Speaker Change: That said, we see the opportunity to potentially lean into high return marketing initiatives in the second half of the year, as we further invest and refine our user acquisition, engagement, and monetization flywheel.

Oliver Chow: spend as needed and reassess if we are not seeing the returns above our. Looking ahead, we expect an incremental investment of up to $6 million in the back half of the year, which could subsequently impact our average revenue per daily active user on newly introduced daily active users starting in the third quarter, as we further expand the ecosystem and drive longer-term monetization returns. Our team is one of the best at deploying capital efficiently, as demonstrated over the past two years, leading to the outperformance you see quarter after quarter.

Speaker Change: We will continue to invest in U.S. spend as needed and reassess if we are not seeing the returns above our threshold.

Oliver Chow: Looking ahead, we expect an incremental investment of up to $6 million in the back half of the year, which could subsequently impact our average revenue per daily active users on newly introduced daily active users starting in the third quarter, as we further expand the ecosystem and drive longer-term monetization returns. Our team is one of the best at deploying capital efficiently, as demonstrated over the past two years, leading to the outperformance UC quarter after quarter. Additionally, we expect to deploy a prudent direct-to-consumer strategy going forward in the near term, which will ultimately scale our offering more meaningfully in the long run.

Speaker Change: Looking ahead, we expect an incremental investment of up to $6 million in the back half of the year.

Speaker Change: which could subsequently impact our average revenue per daily active users on newly introduced daily active users.

Speaker Change: starting in the third quarter, as we further expand the ecosystem and drive longer-term monetization returns.

Speaker Change: Our team is one of the best at deploying capital efficiently, as demonstrated over the past two years, leading to the outperformance you see quarter after quarter.

Oliver Chow: Additionally, we expect to deploy a prudent direct-to-consumer strategy going forward in the near future, which will ultimately scale our offering more meaningfully in the long run. The track record and level of execution of side play gives me confidence in the team to grow the business sustainably, leveraging our robust suite of game franchises as we further invest back into the On to iGaming, where we maintain record revenue of $74 million, up 6% driven by strong growth in the North American market and engaging content launches.

Speaker Change: Additionally, we expect to deploy a prudent direct-to-consumer strategy going forward in the near term, which will ultimately scale our offering more meaningfully in the long run.

Oliver Chow: The track record and level of execution at SidePlay gives me confidence in the team to grow the business sustainably, leveraging our robust suite of game franchises as we further invest back into the business.

Speaker Change: The track record and level of execution at Sideplay gives me confidence in the team to grow the business sustainably, leveraging our robust suite of game franchises as we further invest back into the business.

Oliver Chow: On to eye gaming, where we maintain record revenue of $74 million, up 6% driven by strong growth in the North American market and engaging content launches. AEBIDA was $24 million in the quarter, with AEBIDA margins at 32%, reflecting continued investment to scale the business. As a reminder, prior year quarter benefited from $2 million in license termination fees, which impacted revenue and a bit of growth by 3% and 9% respectively. Additionally, we had termination fees of $3 million and $1 million in the third and fourth quarters, respectively, last year. Our underlying business remains healthy, with strong franchises and new game performance.

Speaker Change: On to iGaming, where we maintain record revenue of $74 million, up 6% driven by strong growth in the North American market and engaging content launches.

Oliver Chow: Aibida was $24 million in the quarter, with Aibida margins at 32%, reflecting continued investment to scale the business. As a reminder, prior to your quarter, we benefited from $2 million in license termination, which impacted revenue and EBITDA growth by 3% and 9%, respectively. Additionally, we had termination fees of $3 million and $1 million in the third and fourth quarters, respectively, last year.

Speaker Change: Aibda was $24 million in the quarter, with Aibda margins at 32%, reflecting continued investment to scale the business.

Speaker Change: As a reminder, prior to your quarter benefited from $2 million in license termination fees.

Speaker Change: which impacted revenue and EBITDA growth by 3% and 9% respectively.

Speaker Change: Additionally, we had termination fees of three million and one million dollars in the third and fourth quarter respectively last year.

Oliver Chow: Our underlying business remains healthy, with strong franchises and new game performance. Additionally, we sell record GDR quarters across the board with our acquired studios and platforms. Lightning Box delivered a record quarter on 33% TGR growth compared to the prior year, supported by strong launches from the Thundering Series. Elk also maintained record GGR levels, up 17% year-over-year, anchored by the Pirates franchise, which is being released across the network in the third quarter. Play Zeto also generated record GGR in the quarter, driving more collaboration and content on the platform.

Speaker Change: Our underlying business remains healthy, with strong franchises and new game performance.

Oliver Chow: Additionally, we saw record GGR quarters across the board where they required studios and platforms. Lightning Box delivered a record quarter on 33% GGR growth compared to prior year, supported by strong launches from the Thundering Series. Elk also maintained record GGR levels, up 17% year by year, anchored by the Pirates franchise, which is being released across the network in the third quarter. PlayZito also generated record GGR in the quarter, driving more collaboration and content on the platform. The scale and experience we have with our platform and network, along with the portfolio of expanded offerings, positioned us well to capitalize on the opportunities ahead of us.

Speaker Change: Additionally, we sell record GGR quarters across the board with our acquired studios and platforms.

Speaker Change: Lightning Box delivered a record quarter on 33% TGR growth compared to prior year, supported by strong launches from the Thundering series.

Speaker Change: Elk also maintained record GGR levels, up 17% year-over-year, anchored by the Pirates franchise, which is being released across the network in the third quarter.

Speaker Change: Playzito also generated record GGR in the quarter, driving more collaboration and content on the platform.

Oliver Chow: The scale and experience we have with our platform and network, along with a portfolio of expanded offerings position us well to capitalize on the opportunities. Light & Wonder's overall success is underpinned by fundamentally sound execution on the solid financial foundation we've established over the last two years. As our business scales, we also expect associated corporate costs to increase while maintaining our healthy margins throughout the organization through continuous margin enhancement assessments. Given our continued growth, we now expect second half corporate costs in the $40 million range per quarter.

Speaker Change: The scale and experience we have with our platform and network, along with the portfolio of expanded offerings, position us well to capitalize on the opportunities ahead of us.

Oliver Chow: Lightning Wonders' overall success is underpinned by fundamentally sound execution on the solid financial foundation we've established over the last two years. As our business scales, we also expect associated corporate costs to increase while maintaining our healthy margins throughout the organization to continue with margin enhancement of investments. Given our container growth, we now expect second half corporate costs in the $40 million range per quarter. Fortunately, our strong balance sheet remains a key competitive advantage in this environment, enabling further disciplined R&D investments and meaningful capital deployment. Importantly, we are focused on preserving an optimal capital structure. Just recently, we reprised our term loan B, reducing our interest rate by 50 basis points, resulting in a decrease in annualized interest costs of approximately $11 million, or $19 million in annualized interest costs reduction, including our January reprison.

Speaker Change: Light & Wonder's overall success is underpinned by fundamentally sound execution on the solid financial foundation we've established over the last two years.

Speaker Change: As our business scales, we also expect associated corporate costs to increase while maintaining our healthy margins throughout the organization through continuous margin enhancement assessments.

Speaker Change: Given our continued growth, we now expect second-half corporate costs in the $40 million range per quarter.

Oliver Chow: Fortunately, our strong balance sheet remains a key competitive advantage in this environment, enabling further disciplined R&D investments and meaningful capital deployment. Importantly, we are focused on preserving an optimal capital structure. Just recently, we repriced our Term Loan B, reducing our interest rate by 50 basis points, resulting in a decrease in annualized interest costs of approximately $11 million, or $19 million in annualized interest cost reduction, including our January rep

Speaker Change: fortunately our strong balance sheet remains a key competitive advantage in this environment enabling further disciplined rd investments and meaningful capital deployment

Speaker Change: Importantly, we are focused on preserving an optimal capital structure.

Speaker Change: Just recently, we repriced our Term Loan B, reducing our interest rate by 50 basis points, resulting in a decrease in annualized interest costs of approximately $11 million, or $19 million in annualized interest costs reduction, including our January repricing.

Oliver Chow: At quarter end, we had over a billion dollars of available liquidity, including over 320 million dollars of cash on hand. Consolidated operating cash flow was $141 million in a quarter, with free cash flow increasing 192% to $70 million compared to prior year, reflective of strong earnings and the prior year period impact of the strategic review and related costs, partially offset by an increase in capital expenditures. With the strong performance and demand of our games and upcoming gaming operations roadmap, we expect elevated capital expenditures to continue in the coming quarters. These are critical investments to build the business over time, as we continue to invest for sustainable growth.

Oliver Chow: At quarter end, we had over a billion dollars of available liquidity, including over $320 million of cash on hand. Consolidated operating cash flow was $141 million in the quarter, with free cash flow increasing 192% to $70 million compared to the prior year, reflective of strong earnings and the prior year period impact of the strategic review and related costs, partially offset by an increase in capital expenditure due to the strong performance and demand of our games and upcoming gaming operations.

Speaker Change: At quarter end, we had over $1 billion of available liquidity, including over $320 million of cash on hand.

Speaker Change: Consolidated operating cash flow was $141 million in the quarter, with free cash flow increasing 192% to $70 million compared to prior year, reflective of strong earnings and the prior year period impact of the strategic review and related costs.

Speaker Change: Partially offset by an increase in capital expenditures.

Speaker Change: with the strong performance and demand of our games and upcoming gaming operations roadmap.

Oliver Chow: We expect elevated capital expenditures to continue in the coming quarter. These are critical investments to build the business over time as we continue to invest for sustainable growth. We are firm believers that free cash flow is one of the key drivers of shareholder value, with the highly conservative nature of our business and continuous efforts to improve conversion, both of which will allow us to further scale annual cash flow over time on a capital allocation basis.

Speaker Change: We expect elevated capital expenditures to continue in the coming quarters.

Speaker Change: These are critical investments to build the business over time as we continue to invest for sustainable growth.

Oliver Chow: We are firm believers that free cash flow is one of the key drivers of shareholder value, with our highly-castredative nature of our business and continuous efforts to improve conversion rates, both of which will allow us to further scale annual cash flow over time. On a capital allocation, our focus largely remains the same within a balanced and opportunistic framework. We continue to be in the middle of our targeted net debt leverage ratio range of two and a half to three and a half times, ending at three times in the quarter, demonstrating our ability to de-lever organically, which was offset by elevated share buybacks in the quarter.

Speaker Change: We are firm believers that free cash flow is one of the key drivers of shareholder value, with our highly castrative nature of our business and continuous efforts to improve conversion rates, both of which will allow us to further scale annual cash flow over time.

Oliver Chow: Our focus largely remains the same within a balanced and opportunistic framework. We continue to be in the middle of our targeted net debt leverage ratio range of two and a half to three and a half. Ending at three times in the course, demonstrating our ability to de-lever organically, which was offset by elevated share buybacks in the quarter. As Matt mentioned earlier, we implemented a new three-year $1 billion share purchase program immediately after we exhausted the initial $750 million buyback authorization at an average price of $66.72 per share, as we bought back the $150 million left on the plan in the quarter.

Speaker Change: on a capital allocation.

Speaker Change: Our focus largely remains the same within a balanced and opportunistic framework.

Speaker Change: We continue to be in the middle of our targeted net debt leverage ratio range of 2.5 to 3.5 times, ending at 3 times in the quarter, demonstrating our ability to de-lever organically, which was offset by elevated share buybacks in the quarter.

Oliver Chow: As Matt mentioned earlier, we implemented a new three-year $1 billion share repurchase program immediately after we exhausted the initial $750 million buyback authorization and an average price of $66.72 per share, as we bought back the $150 million left on the plan in the quarter. We will continue to reinvest back into the business through R&D and CapEx, leveraging our core capabilities to enhance sustainable growth and bolster our industry leadership positions. With regards to M&A, we will continue to take a disciplined approach to the extent that these opportunities are creative and exceed our return thresholds. With our strong growth profile, scaling free cash flow conversion, and share repurchase program, we expect to see meaningful growth in free cash flow per share going forward.

Speaker Change: as matt mentioned earlier we implemented a new three year one billion dollars share repurchase proam immediately after week sawust to the initial seven hundred and fifty million dollarsar buyback authorization at an average price of sixty six dollars in seventy two cents per share

Matt Wilson: as we bought back the $150 million left on the plan in the quarter. We will continue to reinvest back into the business through R&D and CapEx, leveraging our core capabilities to enhance sustainable growth and bolster our industry leadership positions.

Oliver Chow: We will continue to reinvest back into the business through R&D and CapEx, leveraging our core capabilities to enhance sustainable growth and bolster our industry leadership position. With regard to M&A, we will continue to take a disciplined approach to the extent that these opportunities are creative and exceed our return threshold. With our strong growth profile, scaling free cash flow conversion, and share purchase program, we expect to see meaningful growth in free cash flow per share going forward.

Matt Wilson: With regards to M&A, we will continue to take a disciplined approach to the extent that these opportunities are creative and exceed our return thresholds.

Speaker Change: With our strong growth profile, scaling free cash flow conversion, and share of purchase program, we expect to see meaningful growth in free cash flow per share going forward.

Oliver Chow: Overall, we have an effective capital management strategy, and we will continue to deploy capital with an approach that maximizes value for shareholders within the context of a healthy balance sheet.

Oliver Chow: Overall, we have an effective capital management strategy, and we will continue to deploy capital with an approach that maximizes value for shareholders within the context of a healthy balance. In closing, I'd like to thank the team for their continued hard work and dedication as we scale this business for long-term value accretion through our sustainable growth strategy and product roadmap. With that, I will turn it over to the operator for your questions. Maybe you'd like to queue for a question by pressing star one on your telephone keypad.

Matt Wilson: Overall, we have an effective capital management strategy, and we will continue to deploy capital with an approach that maximizes value for shareholders within the context of a healthy balance sheet.

Oliver Chow: In closing, I'd like to thank the team for their continued hard work and dedication as we scale this business for long-term value creation through our sustainable growth strategy and product roadmap.

Speaker Change: In closing, I'd like to thank the team for their continued hard work and dedication as we scale this business for long-term value accretion through our sustainable growth strategy and product roadmap.

Operator: With that, we will turn it over to the operator for your questions. If you would like to Q for a question. You can do so by pressing star one on your telephone key patch. If you're in a reason you'd like to remove your question, you can press star two. Again, to join the question Q, please press star one.

Speaker Change: With that, we will turn it over to the operator for your questions.

Operator: If you'd like to queue for a question, you can do so by pressing star one on your telephone keypad. If, for any reason, you'd like to remove your question, you can press star two. Again, to join the question queue, please press star one. Our first question is from Barry Jonas with Truist. Your line is now open. Hey, guys. Thanks.

Speaker Change: Thank you.

Speaker Change: If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. If for any reason you'd like to remove your question, you can press star 2.

Barry Jonas: Our first question is, Grom. Barry Jonas with Truest. Your line is now open. Hey guys, thanks for taking my question. You know, multiple competitors are obviously in the midst of the M&A. Just curious how do you see that impacting the market and your positioning? Thanks.

Speaker Change: Again, to join the question queue, please press star 1. Our first question is from Barry Jonas with Truist. Your line is now open.

Barry Jonas: Hey guys, thanks for taking my question. You know, multiple competitors are obviously in the midst of M&A. Just curious, how do you see that impacting the market and your positioning? Thanks.

Matt Wilson: Yeah, Barry. Yeah, I think our position is great. At the moment, you can see we had a fantastic second quarter. Great result delivered by the teams across all the three operating business. So we're very well positioned. Yeah, it's a very interesting time in the market at the moment, with M&A activity certainly ticking up. I think it's a function of rate stabilizing and deal is getting easier to press. I want to congratulate AGF, IGT, and every all getting their transactions away. So congratulations to the CEO of those companies. Interestingly, they've all been taken private, which I think is driven by the fact that those private equity companies are looking for businesses that are resilient, stable, and cash-generative, and clearly that's what they see in the sector.

Matt Wilson: Yeah, hey Barry. Yeah, I think our position is great. At the moment, you can see we had a fantastic second quarter, great results delivered by the teams across all the three operating businesses. So we're very well positioned.

Speaker Change: Yeah, hi, Barry.

Speaker Change: Yeah, I think our position is great. At the moment, you can see we had a fantastic second quarter, great result delivered by the teams across all the three operating businesses. So we're very well positioned. Yeah, it's a very interesting time in the market at the moment with M&A activity certainly ticking up. I think it's a function of rates stabilising and deals getting easier to price. So I want to congratulate...

Matt Wilson: Yeah, it's a very interesting time in the markets at the moment, with M&A activity certainly ticking up. I think it's a function of rates stabilizing and deals getting easier to price. So I want to congratulate AGS, IGT, and Every, all getting their transactions away. So congratulations to the CEOs of those companies. Interestingly, they've all been taken private, which I think is driven by the fact that those private equity companies are looking for businesses that are resilient, stable, and cash generative, and clearly, that's what they see in the sector.

Speaker Change: AGS, IGT and EVRI are all getting their transactions away, so congratulations to the CEO of those companies. Interestingly, they've all been taken private, which I think...

Speaker Change: is driven by the fact that these private equity companies are looking for businesses that are resilient.

Matt Wilson: So I think it's a good halo effect for the supply side of the industry. These types of acquisitions do come with a level of disruption as you go through integration. That's a lived experience for the Bally team, the WMS team, the Sygaan team, and the Light and Wonder team. We've been through a huge amount of M&A and the vestiges ourselves. I guess the benefit that we have as an organisation is we're on the other side of those things now. So clearly we have a defined strategy. We have clear goals that are outlined. We've got great operating momentum.

Speaker Change: Stable and Cash Generative and clearly that's what they see in the sector so I think it's a good halo effect.

Matt Wilson: So I think it's a good halo effect for the supplier side of the industry. These types of acquisitions do come with a level of disruption as you go through integration. That's a lived experience for the Bali team, the WMS team, the Cygames team, and the Light and Wonder team.

Speaker Change: for the supply side of the industry.

Speaker Change: These types of acquisitions do come with a level of disruption as you go through integration. That's a lived experience.

Matt Wilson: We've been through a huge amount of M&A and divestitures ourselves, so I guess the benefit that we have as an organization is we're on the other side of those things now. So clearly, we have a defined strategy, we have clear goals that are outlined, and we've got great operating momentum. So for our organization, it's really just to stay focused on executing towards our goals, and clearly, you can see in the quarter that they did that exceptionally well. So it could present some near-term opportunities as we work through the process of those integrations, but we stay focused on controlling the control.

Speaker Change: for the Bally team, the WMF team, the Cygames team and the Light & Wonder team. We've been through a huge amount of M&A and divestitures.

Speaker Change: I guess the benefit that we have as an organization is we're on the other side of those things now, so clearly we have a defined strategy, we have clear goals that are outlined, we've got great operating momentum, so for our organization it's really just stay focused on executing towards our goals, and clearly you can see in the quarter they've done that exceptionally well. So it could present some near-term opportunities as we kind of work through the process of those integrations, but we stay focused on controlling the controllables.

Matt Wilson: So for our organisation, it's really just focused on executing towards our goals. And clearly you can see in the quarter that it's done that exceptionally well. So it could present some near-term opportunities as we kind of work through the process of those integrations. But we stay focused on control and the control rules. Awesome.

Matt Wilson: Thank you, Matt.

Rohan Gallagher: Thanks. Our next question is from Rohan Gallagher with Jordan. Your line is now open. Good afternoon, Matt.

Matt Wilson: Awesome. Thank you, Matt.

Operator: Our next question is from Rohan Gallagher with Jarden. Your line is now open.

Matt Wilson: Thanks.

Matt Wilson: Our next question is from Rohan Gallagher with Jarden. Your line is now open.

Matt Wilson: Good afternoon, Matt, and Oliver. Firstly, congratulations on another good result. For the last two years, we've seen greater R&D focus that's led to a broader and deeper game and cabinet portfolio, including proprietary licensed titles. It's obviously provided momentum for you to push successfully into things like adjacencies, et cetera. Can I ask, Matt, how you see the portfolio currently and what we should expect in terms of new games, cabinet releases, et cetera, to maintain that momentum towards your targeted $1.4 billion adjusted EBITDA?

Rohan Gallagher: I'll have a firstly congratulations on another good result. The last two years we've seen greater R&D focus that's led to border and deeper game and cabinet portfolio including proprietary license titles. It's obviously provided momentum for you to push successfully into things like adjacencies, etc.

Rohan Gallagher: Good afternoon, Matt, Oliver. Firstly, congratulations on another good result. For the last two years, we've seen greater R&D focus that's led to broader and deeper gain in cabinet portfolio, including proprietary licence titles.

Rohan Gallagher: It's obviously provided momentum for you to push successfully into things like adjacencies, etc. Can I ask, Matt, how you see the portfolio currently and what should we expect in terms of new games, cabinet releases, etc. to maintain that momentum towards your targeted $1.4 billion adjusted EBITDA, please?

Rohan Gallagher: Can I ask Matt how you see the portfolio currently, and what should we expect in terms of new games, cabinet releases, etc. to maintain that momentum on your towards your targeted 1.4 billion dollar adjusted in the dark place?

Matt Wilson: Sure, looking forward to seeing you next week, Rohan. Yeah, I think the way that you find it is the right way. Don't think about a game or the next cabinet that's been released. Think about the program that's been set up here by Rich Schneider and Nathan Drain and the entire R&D organization. We've made huge amounts of investment putting infrastructure in place so we can build a portfolio that delivers great hit games up to great hit games. You're seeing a lot of momentum in the Irish chart that you can see up and even more pop the number one core game in the market during very well.

Matt Wilson: Sure, looking forward to seeing you next week, Rohan. Yeah, I think the way that you've explained it is the right way to think about it. Don't think about a game or the next cabinet that's being released. Think about the program that's been set up here by Rich Schneider and Nathan Drain and the entire R&D organization. We've made huge amounts of investment, putting infrastructure in place so we can build a portfolio that delivers great hit games after great hit games.

Matt Wilson: Sure, looking forward to seeing you next week, Rohan.

Speaker Change: Yeah, I think the way that you explained it is the right way to think about it. Don't think about a game or the next cabinet that's being released, think about the program that's been set up here by Rich Schneider and Nathan Drain and the entire R&D organisation. We've made huge amounts of investment putting infrastructure in place so we can build a portfolio that delivers great hit games after great hit games. And you're seeing a lot of momentum in the Iowas charts, I think you can see.

Matt Wilson: And you're seeing a lot of momentum in the Iowas charts. I think you can see Huff and even more past the number one core game in the market doing very well. Obviously, you can see Dragon Train performing well in Australia and the US, but it's a range of games. I think one of the interesting data points that we've seen recently is the second quarter Iowas slot survey.

Matt Wilson: Obviously, you can see Dragon Train before we were in Australia and the US. But it's a range of games. I think one of the interesting data points that we've seen recently is the second quarter Isle of Slot Survey. You can see three of the top four most anticipated games in that survey. We're light and one to go. That really points to future purchase intentions. The three games were up and even more pop and more pop and money matches, Squid Game and Dragon Train. Squid Game just launched actually last week at Yom of Arthur. Shout out to them as being a fantastic launch partner.

Speaker Change: Huff and even more Puff, the number one core game in the market, doing very well. Obviously you can see Dragon Train performing well in Australia and the U.S.

Rohan Gallagher: But it's a range of games. I think one of the interesting data points that we've seen recently is the second quarter ILS slot survey. You can see three of the top four most anticipated games in that survey were Light & Wonder games. So that really points to future purchase intentions and so the three games were Huff & Puff, Money Mansions.

Matt Wilson: You can see three of the top four most anticipated games in that survey were Light & Wonder games, so that really points to kind of future purchase intentions. And so the three games were Huff and even more past Money Mansion, Squid Game, and Dragon Train. So Squid Game just launched last week at Yalmavar.

Speaker Change: Squid Game and Dragon Train. So Squid Game just launched actually last week at Yalmavar, so shout out to them as being a fantastic launch partner. But we've got great momentum across the board and really those games that we're building will ultimately end up on casino floors in North America and globally, but those same games will go into the adjacent markets.

Matt Wilson: So I shout out to them as being a fantastic launch partner. But we've got great momentum across the board. And really, those games that we're building will ultimately end up on casino floors in North America and globally. But those same games will go into adjacent markets. Those same games, again, will go into the site play business and also iGaming. So to the extent that we're building world-class games, it just raises all boats across our organization.

Matt Wilson: We've got great momentum across the board, and really those games that we're building will ultimately end up on casino floors in North America and globally. But those same games will go into the adjacent markets. Those same games again will go into the site play business and also eye gaming. To the extent that we're building world-class games, it just rises all boats across our organization. Really comfortable with what I'm actually seeing. You're seeing it on the Irish chart. You're also seeing it in the financial, so we're on a good spot.

Rohan Gallagher: Those same games again will go into the site play business and also iGaming. So, you know, to the extent that we're building world-class games...

Matt Wilson: So really comfortable with the momentum we're seeing. You can see it on the Iowa chart. You're also seeing it show up in the financials. So we're in a good spot. Yeah, and just one thing to add to that is, you know, obviously content is king, but we're also coming out with really great hardware cabinets as well. So Horizon Cabinet is coming out with Dancing Drums Ultimate Explosion and the Landmark 7000 Transparent coming off the heels of a very successful Landmark 7000 Mechanical Real Cabinet. So we've got a kind of combination of both software and hardware to be able to commercialize and really drive sustainable growth in the future.

Rohan Gallagher: It just rises all boats across our organization, so really comfortable with the momentum we're seeing. You're seeing it on the ILS chart. You're also seeing it show up in the financials, so we're in a good spot. Yeah, and just one thing to add to that is, you know, obviously content is king, but we're also coming out with really great hardware.

Matt Wilson: Just one thing to add to that is obviously a content is King, but we're also coming up with really great hardware cabinets as well. Horizon cabinet coming up with Dancing Drums Ultimate Explosion with a landmark 7,000 transparent coming off the heels of a very successful landmark 7,000 mechanical real cabinet. We've got a combination of both software and hardware to be able to commercialize and really drive sustainable growth in the future.

Speaker Change: We have a lot of great cabinets as well. So Horizon Cabinet coming up with Dancing Drums Ultimate Explosion, with the Landmark 7000 Transparent coming off the heels of a very successful Landmark 7000 Mechanical Real Cabinet.

Speaker Change: So, we've got a kind of a combination of both software and hardware to be able to commercialize and really drive sustainable growth in the future.

Rohan Gallagher: Thank you.

Oliver Chow: And if I may be shaky, could I ask, I see, just, I noticed higher restructuring costs, legal costs, etc. That impacts your EPS ultimately. Can you unpack that in terms of what that was and what we should expect going forward, please?

Oliver Chow: And if I may be cheeky, could I ask OC, I noticed higher restructuring costs, legal costs, etc., obviously that impacts your EPS ultimately. Can you unpack that in terms of what it was and what we should expect going forward, please? Thank you.

Speaker Change: And if I may be cheeky, could I ask OC, I noticed higher restructuring costs, legal costs, etc. Obviously that impacts your EPS ultimately. Can you unpack that in terms of what that was and what we should expect going forward please?

Oliver Chow: Thank you. Yeah, so from a corporate perspective, we've talked about a couple of things in the call. As we mentioned, as we continue to grow this business over time, we should expect to see roughly about a $40 million run rate from a corporate perspective. As we continue to scale at a pace much slower than revenue, we want to make sure that we can sustain that and then be able to sustain and support that growth level across the businesses. We did not spend the full 10 million that we had discussed from a legal perspective in the first half, and that's something that we discussed late last year.

Oliver Chow: Yeah, so from a corporate perspective, you know, we talked about a couple of things in the call. As we mentioned, as we continue to kind of grow this business over time, we will, we should expect to see roughly, call that a $40 million run rate from a corporate perspective. As we continue to kind of scale at a pace much slower than revenue, we want to make sure that we can sustain that and then be able to sustain and support that growth level across the businesses.

Speaker Change: Thank you.

Speaker Change: Yeah, so from a corporate perspective, you know, we've talked about a couple of things in the call, you know, as we mentioned, you know, as we continue to kind of grow this business over time, we will, we should expect to see roughly, call that a $40 million run rate from a corporate perspective as we continue to kind of scale.

Speaker Change: at a pace...

Speaker Change: much slower than revenue. We want to make sure that we can sustain that and then be able to sustain and support that growth level across the businesses. We did not spend the full 10 million that we had discussed from a legal perspective in the first half, and that's something that we discussed late last year. Some of that will now start to flow into the second half. So, you know, moving forward, like many gaming companies, you know, we would expect to have some level of ongoing legal expenses.

Oliver Chow: We did not spend the full $10 million that we had discussed from a legal perspective in the first half. And that's something that we discussed late last year. Some of that will now start to flow into the second half. So, you know, moving forward, like many gaming companies, we would expect to have some level of ongoing legal expenses as we move forward. So we'll continue to kind of manage that, broadly speaking.

Oliver Chow: Some of that will now start to flow into the second half. So moving forward, like many gaming companies, we would expect to have some level of ongoing legal expenses as we move forward. So we'll continue to kind of manage that, probably speaking.

Speaker Change: as we move forward. So we'll continue to kind of manage that, broadly speaking.

Oliver Chow: Thank you, Oliver. Thanks, Matt. Have a good day.

Oliver Chow: Thank you all of us.

Matt Wilson: Thanks, man.

Matt Wilson: Have a good day.

Operator: Yep.

Operator: Of course.

Speaker Change: Thank you, Oliver. Thanks, Matt. Have a good day.

David Katz: Our next question is from David Katz with Jefferies. Your line is now open. Hi, good day everyone. A couple of cash and capital questions. Firstly, with respect to the repurchases. Just an update on your philosophy and thinking about when and how much and dialing that up and down, whether it becomes a programmatic aspect of the business. And the like. And then my second question is just looking back over the past six quarters and the cash robots conversion from EBITDA. It's really jumped around quite a bit. It was definitely up in this quarter year over year.

Operator: Our next question is from David Katz with Jeffreys. Your line is now open.

Speaker Change: Yep, of course.

Speaker Change: Our next question is from David Katz with Jeffreys. Your line is now open.

David Katz: Hi, good day, everyone. Afternoon, everyone.

David Katz: Hi, good day everyone, afternoon everyone. A couple of cash and capital questions. Firstly, with respect to the repurchases.

David Katz: Just an update on your philosophy and thinking about, you know, when and how much...

Speaker Change: and you know dialing that up and down whether it becomes a programmatic

Speaker Change: You know, aspect of the business.

Speaker Change: and the like. And then my second question is just looking back over the past six quarters and the, you know, cash-for-ops conversion from EBITDA, it's really jumped around quite a bit. It was definitely up in this quarter year over year.

Oliver Chow: But part of the question is, you know, should we think about the back half of the year as, you know, higher conversion as it was last year and any color around that. Thanks. Thanks, David. Good to hear from you. So yet you're your first question on share repo. You know, we've executed our capital allocation strategy and framework really well here over the last couple of years. And a lot of that is just trying to stay consistent with really no structural change to our framework as we move forward right now. Obviously, will remain nimble as we as we go.

Speaker Change: But, you know, part of the question is, you know, should we think about the back half of the year as, you know, higher conversion as it was last year, and any color on that would help. Thanks.

David Katz: A couple of cash and capital questions. First, with respect to the repurchases, just an update on your philosophy and thinking about, you know, when and how much and, you know, dialing that up and down, whether it becomes a programmatic aspect of the business, and, and the like. And then my second question is, just looking back over the past six quarters, and the cash for operations conversion from EBITDA, it's really jumped around quite a bit.

David Katz: It was definitely up in this quarter year over year. But part of the question is, you know, should we think about the back half of the year as, you know, higher conversion as it was last year, and any color on that would help.

David Katz: Thank you.

Speaker Change: Thanks, David. Good to hear from you. So, yeah, to your first question on ShareRepo, you know, we've executed our capital allocation strategy and framework really well here over the last couple of years. And a lot of that is just trying to stay consistent with

David Katz: Thanks. Thanks, David. Good to hear from you. So, yeah, to your first question:

David Katz: Thanks, David. It's good to hear from you.

Speaker Change: Really no structural change to our framework as we move forward right now. Obviously we'll remain nimble as we go. With the strong momentum that we're seeing across the business and really sitting in the middle of our leverage range, we have significant optionality and flexibility.

Oliver Chow: You know, with the strong momentum that we're seeing across the business and really sitting in the middle of our kind of leverage range. You know, we have significant optionality and flexibility with regards to how we deploy capital. And so if you think about the last two years, you know, we've been able to deliver while executing on that share repurchase program at an average price of about $66.72. So we continue to drive significant value creation for our stakeholders there in. And like I said, we'll continue to do live organically as we continue to have very strong top line, but really the quality of earnings down to 80, but the growth as well as the cash conversion that you mentioned continuing to scale here over time.

Oliver Chow: So, yeah, to your first question on share repo, you know, we've executed our capital allocation strategy and framework really well here over the last couple of years. And a lot of that is just trying to stay consistent with really no structural change to our framework as we move forward right now. Obviously, we'll remain nimble as we go, you know, with the strong momentum that we're seeing across the business and really sitting in the middle of our kind of leverage range.

Oliver Chow: You know, we have significant optionality and flexibility with regard to how we deploy capital. And so, if you think about the last two years, we've been able to de-lever while executing on that share of purchase program at an average price of about $66.72.

Speaker Change: with regards to how we deploy capital. And so if you think about the last two years, you know, we've been able to deliver while executing on that share of purchase program at an average price of about $66.72. So we continue to drive significant value creation for our stakeholders and like I said, we'll continue to deliver organically as

Oliver Chow: So, we continue to drive significant value creation for our stakeholders, and like I said, we'll continue to live organically as we continue to have a very strong top line, but really, the quality of earnings down to 80, but the growth as well as the cash conversion that you mentioned will continue to scale here over time. So, yeah, share repurchases will continue to be a key focus for us. And to your point, we do have a very programmatic plan now in place that we kind of highlighted last quarter.

Speaker Change: We continue to have very strong top line, but really the quality of earnings down to 80, but the growth, as well as the cash conversion that you mentioned, continuing to scale here over time. So, yeah, share about buybacks will continue to be a key focus for us, and to your point, we do have a very programmatic plan now in place that we kind of highlighted last quarter, and at times we'll look to lean in and take advantage of opportunities or dislocations in the marketplace with this new billion-dollar plan in place. So, with our leverage kind of where it's at right now, we're focused on investing in growth and really enhancing the long-term value of our stakeholders with just the optionality available to us to kind of grow free cash flow. So we're in a great position, broadly speaking.

Oliver Chow: So, yeah, sure about buybacks will continue to be a key focus for us. And to your point, we do have a very programmatic plan now in place that we kind of highlighted late last quarter. And at times we'll look to lean in and take advantage of opportunities or dislocations in the marketplace with this new billion-dollar plan in place. So, you know, with our leverage kind of where it's at right now, we're focused on investing in growth and really enhancing the long-term value of our stakeholders with just the optionality available to us to kind of grow free cash flow.

Oliver Chow: And at times, we'll look to lean in and take advantage of opportunities or dislocations in the marketplace with this new billion-dollar plan in place. So, you know, with our leverage kind of where it is at right now, we're focused on investing in growth and really enhancing the long-term value of our stakeholders with just the optionality available to us to kind of grow free cash flow. So, we're in a great position, you know, broadly speaking, to kind of hit your free cash flow question.

Oliver Chow: So we're in a great position, you know, broadly speaking, to the kind of hit your free cash flow question. You know, the highly casher in nature of our businesses really does give us kind of confidence kind of executing into our kind of base strategy. You know, overall we do manage free cash well, well, you know, kind of from a quarter perspective, given some of the seasonality that we see. So timing of catbacks, you know, interest payments, and tax payments. So there's obviously a lot of moving parts that kind of move a quarter to quarter. That's why we kind of focus solely on kind of an annual annual view on free cash flow.

Oliver Chow: You know, the highly cash-generative nature of our businesses really does give us kind of confidence kind of executing on our kind of base strategy. You know, overall, we do manage free cash flow well, kind of from a quarter perspective, just given some of the seasonality that we see. So, the timing of CapEx, you know, interest payments and tax payments. So, there's obviously a lot of moving parts that kind of move quarter to quarter.

Speaker Change: to hit your free cash flow question. The highly cash-oriented nature of our businesses really does give us...

Speaker Change: kind of confidence kind of executing into kind of base strategy overall we do manage free cash flow well kind of from a quarter perspectiveto given some of the seasonalities that we see so timing of capex

Speaker Change: know interest payments in tax payments so s obviously a lot of movingvie parts that kind of move qucourarter quarter we kind of focus sole on a kind of an annual annual view on free cashflow but as we continue to scale you know that mention the function point from from an inst perspect we'regoingto continue toinvest actx that that's going to bea key driver for us to grow the business over time especially in that premium install base where we expect to continue to lo capex that to support this growross over time but yeah we had a great year great quar should just kind of growth it's one hundred eighty eight percent versus versus prior year to seventy million and that's reflective obviously strongerorg that we talked about but also

Oliver Chow: That's why we kind of focus solely on kind of an annual view of free cash flow. But as we continue to scale, Matt mentioned the inflection point from an install-based perspective, we're going to continue to invest in CapEx. So, that's going to be a key driver for us to grow the business over time, especially in that premium install base where we expect to continue to deploy CapEx to support this growth over time.

Oliver Chow: But as we continue to scale, you know, Matt mentioned the function point from an install base perspective. We're going to continue to invest in catbacks. So that that's going to be a key driver for us to grow the business over time, especially in that premium install base. Where we expect to continue to play catbacks to support this growth over time. But you know, we had a great year, a great quarter. So I should say just kind of growth wise. It's 188% versus versus prior year to 70 million. And that's reflective, obviously, of the strong earnings that we talked about, but also, you know, cash, you know, hence cash conversion.

Oliver Chow: But, you know, we had a great year, a great quarter, I should say, just kind of growth-wise. It's 188% versus prior year to $70 million. And that's reflective, obviously, of the strong earnings that we talked about, but also, you know, cash, you know, the enhanced cash conversion, but, you know, one-time items that we had last year. So, this is a key focus for us here at Light and Water. Matt and I are confident that we're going to continue to scale free cash flow here over the long term.

Oliver Chow: But you have one-time items that we had in last year. So this is a key focus for us here at Lightwater. Matt and I are our confidence that we're going to continue to scale free cash flow here over the long term. Thank you.

Speaker Change: This is a key focus for us here at Light & Wonder. Matt and I are confident that we're going to continue to scale free cash flow here over the long term.

Speaker Change: Thank you.

Chad Beynon: Our next question is from Chad Beynon with McQuarry. Your line is now open. Thanks for taking my question. Matt and Oliver wanted to ask about side play. In the prepared remarks, you mentioned that direct to consumers up to 12%. You continue to take care, and then the margins are increasing because of that initiative.

Operator: Our next question is from Chad Beynon with McClary. Your line is now open.

Speaker Change: thank

Speaker Change: Our next question is from Chad Beynon with McCleary. Your line is now open.

Chad Beynon: Thanks for taking my question. Matt and Oliver, I wanted to ask about side play.

Chad Beynon: Thanks for taking my question.

Chad Beynon: that in all wanted to ask about sideplay in the prepared remarks you mentioned that direct to consumer is up to twelve percent you continue to take share and then the margins are increasing because of that initiativeso how do you see this continuing to ramp into the back half and beyond

Chad Beynon: So how do you see this continuing to ramp into the back half and beyond? And then secondarily, there's been a sweepstakes business that continues to increase. And I think some of us, you know, viewed as a partial competitor to social, maybe a partial competitor I casino, do you see that as a bigger threat to your side play business? Thank you.

Matt Wilson: In the prepared remarks, you mentioned that direct-to-consumer is up to 12%. You continue to take share, and then the margins are increasing because of that initiative. So, how do you see this continuing to ramp into the back half and beyond? And then, secondarily, there's been a sweepstakes business that continues to increase, and I think some of us view it as a partial competitor to social, maybe a partial competitor to iCasino. Do you see that as a bigger threat to your side business? Thank you. Hey, Chad, yeah, just quickly, another great, cool...

Speaker Change: and then secondarily there's been a sweep stakes business that continues to increase and i think some of us you know viewed as as a partial competitor to social maybe a partial competitor casino do you see that as as a bigger threat to your cyite business thank you

Matt Wilson: Hey Chad, yeah, just quickly another great quarter from Side Play. The investments we made in the side play engine. A few years ago, we continued to pay dividends and good growth across all of the major games. So good operating momentum. A great team that's backfully aligned to Light & Wonder.

Matt Wilson: Hey Chad, yeah, just quickly, another great quarter from CyPlay. The investments we made in the CyPlay engine a few years ago are continuing to pay dividends, we're seeing good growth across all of the major games, so good operating momentum, and a great team that's back fully aligned to Light & Wonder. I think direct-to-consumer was a key feature of this quarter; we went from 1% of revenues in 2023 being driven through our direct-to-consumer platform to 12% in the quarter, so it's been a huge step up sequentially from Q1 to Q2.

Speaker Change: Hey Chad, yeah just quickly, another great quarter from Cyplay, the investments we made in the Cyplay engine a few years ago, we're continuing to pay dividends, we're seeing good growth across.

Speaker Change: all of the major games, so good operating momentum, great team that's back fully aligned to Light and Wonder. I think Director Kishima was.

Matt Wilson: I think direct-to-consumer was a key feature of this quarter. We went from 1% of revenues in 2023 being driven through our direct-to-consumer platform to 12%. In the quarter, if that's been a huge step up, sequentially Q1 to Q2, we've rolled it out over the lion share of games now, I would say. And so we see levels probably normalizing a little bit from this point going forward through the remainder of the year. As we kind of assess the player reaction to that, we're really comfortable with what it's delivering to us from a bottom line perspective. And we'll continue to scale over time, but I think that big run up in terms of the exponential growth in DTC will normalize in the back up.

Speaker Change: A key feature of this quarter, we went from 1% of revenues in 2023 being driven through our direct-to-consumer platform to 12% in the quarter, so it's been a huge step up sequentially Q1 to Q2. We've rolled it out over...

Matt Wilson: We've rolled it out over the lion's share of games now, I would say, and so we see levels probably normalizing a little bit from this point going forward through the remainder of the year as we kind of assess the player reaction to that. We're really comfortable with what it's delivering to us from a bottom-line perspective, and you know we'll continue to scale over time, but I think that big run-up in terms To the sweepstakes question, there is an interesting market landscape, a lot of activity from a legal perspective around sweepstakes in different states, and it is an online form of playing slot-style games, so it certainly does play into the same profit pools I would suggest.

Speaker Change: for the lion's share of games now, I would say, and so we see levels probably normalising a little bit from this point going forward through the remainder of the year as we kind of assess.

Speaker Change: The player reaction to that, we're really comfortable with what it's delivering to us from a bottom line perspective and we'll continue to scale over time but I think that big run up in terms of the exponential growth in DTC will normalise in the back half but it's making a big contribution.

Matt Wilson: But it's making a big contribution.

Matt Wilson: To the sweepstakes question, it's interesting market landscape; a lot of activity from a legal perspective around sweepstakes in different states. And it is an online form of playing slot-style games, so it certainly does play into the same offer pools, I would suggest. So we're watching it closely as an emerging category, not something we intend on participating in, given the highly regulatory nature of our business. But it's something we watch in monitor very closely.

Speaker Change: To the sweepstakes question, it's an interesting market landscape, a lot of activity from a legal perspective around sweepstakes in different states.

Speaker Change: You know, it is an online form of playing slot-style games, so it certainly does play into the same profit pools, I would suggest. So we're watching it closely as an emerging category, not something we intend on participating in given the highly regulatory nature of our business, but it's something we watch and monitor very closely.

Matt Wilson: We're watching it closely as an emerging category, not something we intend to participate in given the highly regulatory nature of our business, but it's something we watch and monitor very closely. Thank you very much. We have a question from Rohan Sundram.

Rohan Sundram: Thank you very much. We have a question from Rohan syndrome with MST, marquee. Your line is now open. Thank you. Good afternoon, Madam Oliver. Thanks. Just one from me around the 1.4 billion, even targets the next year. How can you just give us a reminder of your confidence on that target and just whether anything has changed how you're seeing any specific headwinds or tailwinds around that. That would be great. Thank you. Yeah, great.

Speaker Change: Thank you very much.

Operator: We have a question from Rohan Sundram with MST Marquis. Your line is now open.

Speaker Change: We have a question from Rohan Sundram with MST Marquis. Your line is now open.

Rohan Sundram: Thank you. Good afternoon, Matt and Oliver. Thanks. Just one from me around the...

Rohan Sundram: 1.4 billion AED targets for next year. Can you just give us a reminder of your confidence on that target and just whether anything has changed, how you're seeing any specific headwinds or tailwinds around that? That'd be great, thank you.

Rohan Sundram: Also, looking forward to seeing you next week at AGE. Yeah, just for memory's sake, if you go back through the algebra of this target that we laid out, we set it out in 22. We delivered 913 million of EBITDA that year, and we put this ambitious goal of getting to 1.4 billion by 2025. At the time, we needed 15% CAGR to get us from where we were to the goal, which was above category growth.

Matt Wilson: Also, I was looking forward to seeing you next week at AGE. Yeah, just for memory sake, if you go back through the algebra of this target that we laid out, we set it out in 22. We delivered 913 million of EBITDA that year, and we put this ambitious goal to get to 1.4 billion by 2025. At the time, we needed 15% K-GAR to get us from where we were to the goal, which was above category growth. And what looked like a very ambitious goal for an organisation just kind of coming out of its transformation. 2023, we delivered 22% EBITDA growth against that 15% run rate required.

Speaker Change: Yeah, great.

Rohan Sundram: Also looking forward to seeing you next week at AGE.

Speaker Change: yeah at this per

Speaker Change: For memory's sake, if you go back through the algebra of this target that we laid out, we set it out in 22, we delivered 913 million of EBITDA that year, and we put this ambitious goal.

Speaker Change: to get to $1.4 billion by 2025. At the time we needed 15% CAGR to get us from where we were to the goal which was above category growth and what looked like a very ambitious

Rohan Sundram: And what looked like a very ambitious goal for an organization just kind of coming out of its transformation, you know, 2023, we delivered 22% EBITDA growth against that 15% run rate required. If you think about this, that last quarter, Q2, was 17%. So that leaves us, and this is the arithmetic of it, 11% run rate required to use the cricket terminology to get us to the goal.

Speaker Change: Goal for an organization just kind of coming out of its transformation. You know, 2023, we delivered 22% EBITDA growth against that 15% run rate required. If you think about this, that last quarter, Q2 was 17%. So that leaves us...

Matt Wilson: If you think about this, that last quarter, Q2 was 17%. So that leads up, and this is the arithmetic of it: 11% run rate required to use the cricket terminology to get us to the goal. So feeling like we've done a lot of the heavy lifting to build the operating momentum, to put us on the right trajectory to get towards that 1.4 billion by 2025. We feel very confident we can get there. And it's really the mix of the businesses and the performance we're seeing across the broad organisation. And really the fruits of the investments we've made in things like the Cypher engine, the R&D organisation, and the infrastructure we've put into the eye gaming business.

Speaker Change: And this is the arithmetic of it, 11% run rate required, to use the cricket terminology, to get us to the goal. So feeling like we've done a lot of the heavy lifting to build the operating momentum to put us on the right trajectory to get towards that $1.4 billion by 2025, we feel very confident we can get there. And it's really the mix of the businesses and the performance we're seeing across the broad organisation, and really kind of the fruits of the investments we've made in things like the CyPlay engine, the R&D organisation, the infrastructure we've put into the gaming business, gives us a lot of confidence in the pathways to get there. So I think with the operating momentum we see, there's a clear path to get to that $1.4 billion.

Matt Wilson: So, you know, feeling like we've done a lot of the heavy lifting to build the operating momentum to put us on the right trajectory to get towards that 1.4 billion by 2025. We feel very confident that we can get there. And it's really the mix of the businesses and the performance we're seeing across the broad organization, and really the fruits of the investments we've made in things like the CyClay engine, the R&D organization, you know, the infrastructure we've put into the gaming business that gives us a lot of confidence in the pathways to get there.

Matt Wilson: This is a lot of confidence in the pathways to get there. So I think with the operating momentum we see, there's a clear path to get to that 1.4 billion.

Matt Wilson: So, yeah, I think with the operating momentum, we see there's a clear path to get to that 1.4 billion. And then really, it's beyond that, you know, where do we go from here as an organization, which is obviously a key question for investors. What we'll say is that there will be no earnings cliff in 2025. We've set these businesses up in a way that they'll grow in perpetuity. So, yeah, we see a great runway to get to that 1.4 billion and continued momentum beyond that.

Matt Wilson: And then really it's beyond that where do we go from here as an organisation, which obviously is a key question for investors. What we'll say is that there's no earnings clip in 2025. We've set these businesses up in a way that they'll grow in perpetuity. So we see great run rate to get to that 1.4 billion and continue to momentum beyond that.

Speaker Change: And then really, it's beyond that, you know, where do we get, where do we go from.

Speaker Change: from here as an organisation, which obviously is a key question for investors. What we'll say is that there's no earnings cliff in 2025. We've set these businesses up.

Speaker Change: in a way that they'll grow in perpetuity. So yeah, we see great runway to get to that $1.4 billion and continued momentum beyond that. And we'll come back to investors in due course to kind of frame up how best to think about the opportunity beyond 2025. But you know, we've built a great business that has great momentum, and we don't see that slowing down anytime soon.

Matt Wilson: And we'll come back to investors in due course to kind of frame up how best to think about the opportunity beyond 2025. But we've built a great business that has great momentum. And we don't see that following yet any time soon.

Matt Wilson: And we'll come back to investors in due course to kind of frame up how best to think about the opportunity beyond 2025. But, you know, we've built a great business that has great momentum, and we don't see that slowing down any time soon.

Matt Wilson: Thanks, Matt.

Speaker Change: Thanks a lot.

Ryan Sigdahl: Our next question is from Ryan Sigdahl with Craig Allen. Your line is now open. Thank you. Good afternoon, Matt, Oliver. Matt, looking at Asia and international but strong showing at G2E and Asian June, looking at international shipments, another 30 plus percent quarter this quarter. I know a lot of success in Australia and Macau, and the end deal in the UK is certainly a nice one, but what's next? Are there other geographic opportunities on the strategic roadmap to keep the momentum going and growth in future years? And then secondly, just a quick one for Oliver: you mentioned kind of a lot of clicks in the second half and Q3.

Operator: Our next question is from Ryan Sigdahl with Craig Hallam. Your line is now open.

Speaker Change: Our next question is from Ryan Sigdahl with Craig Hallam. Your line is now open.

Ryan Sigdahl: Hey, good afternoon, Matt, and Oliver. Matt, looking at Asia and kind of international, but a strong showing at G2E in Asia in June, looking at international shipments, another 30-plus percent quarter this quarter. I know they have had a lot of success in Australia and Macau, and the end-to-end deal in the UK is certainly a nice one. But what's next? I wonder if there are other geographic opportunities on the strategic roadmap to keep the momentum going and growth in future years?

Ryan Sigdahl: Hey, good afternoon, Matt, Oliver.

Ryan Sigdahl: um

Ryan Sigdahl: Matt, looking at Asia and kind of international, but strong showing at G2E in Asia in June , looking at international shipments, another 30 plus percent quarter this quarter.

Speaker Change: I know a lot of success in Australia and Macau and the NTN deal in the UK is certainly a nice one, but what

Speaker Change: what's next i guess are there other geographic opportunities on the strategic road map to keep the momentum going and growth in future years and then secondly just a quick land prolliver you mentioned kind of a lot of put kes and in the second half in q three you willing to comment directionally if you expect ebitda margin to be

Ryan Sigdahl: And then, secondly, just a quick one for Oliver. You mentioned kind of a lot of push-takes in the second half of Q3. Are you willing to comment directionally if you expect EBITDA margin to be up in two-and-a-half versus one-half?

Matt Wilson: Are you willing to comment directionally if you expect EBITDA margin to be up in two half versus one half? Thanks. I mean, the Asian market is really close to my heart. I actually lived in that region for five years back in the 2008 time frame, and that was when that market was really booming at that point in time. It was the slowest market to recover out of COVID, but it's really nice to see it back in full stride. What's growing our business at the moment is really those traditional Asian markets. So Singapore, Macau, the Philippines, a lot of activity in that space.

Speaker Change: in two half versus one half. Thanks.

Matt Wilson: I mean, the Asian market is something that's really close to my heart. I actually lived in that region for five years back in the 2008 time frame, and that was when that market was really booming at that point in time. It was the slowest market to recover out of COVID, but it's really nice to see it back in full stride.

Speaker Change: I mean the Asian market is something that's really close to my heart, I've actually lived in that region for five years.

Speaker Change: back in the 2008 timeframe and that was when that market was really booming at that point in time. It was the slowest market to recover out of COVID but it's really nice to see it back.

Matt Wilson: What's growing our business at the moment is really those traditional Asian markets, so Singapore, Macau, the Philippines, a lot of activity in that space. So I feel really good about the opportunities in front of us for those markets, and that'll be a multi-year opportunity. Things beyond that, you see the UAE emerging as a potential market. We think the wind property likely comes online in 2027.

Speaker Change: in full stride. What's growing our business at the moment is really those traditional Asian markets, so Singapore, Macau, the Philippines, a lot of activity in that space, so feeling really good about the opportunities in front of us for those markets, and that'll be a multi-year opportunity. Things beyond that, you see the UAE emerging as a potential market. We think

Matt Wilson: So feeling really good about the opportunities in front of us for those markets, and that'll be a multi-year opportunity. The things beyond that, you see the UAE emerging as a potential market. We think the wind property likely comes online in 2027. Beyond that, you see Thailand emerging as an opportunity, probably in the 28-29 time frame. You've got Japan looming as a new gaming market. So really a lot of optionality for us across that international business. And I think it speaks to the strength of our organization. As a CEO of a company, you want to diversify the portfolio of businesses.

Speaker Change: You know, the wind property likely comes online in 2027. Beyond that, you see Thailand emerging as an opportunity probably in the 2028-2029 timeframe.

Matt Wilson: Beyond that, you see Thailand emerging as an opportunity probably in the 2028, 2029 time frame. You've got Japan looming as a new gaming market. So really, a lot of optionality for us across that international business, and I think it speaks to the strength of our organization. As a CEO of a company, you want a diversified portfolio of businesses.

Speaker Change: you've got Japan

Speaker Change: You know, looming as a new gaming market, so really a lot of optionality.

Speaker Change: for us across that international business and I think it speaks to the strength of our organization. As a CEO of a company you want a diversified portfolio of businesses. We have that across the three operating businesses we have.

Matt Wilson: We have that across the three operating businesses we have, but speaking specifically to gaming, very diversified across that gaming footprint across games and tables and systems. Also geographic markets. Australia's emerged as a really great contributor to our organization. Number one share again in the quarter, which is just a fantastic recognition of all the hard work that's gone into building our position in that market. We're a number one player in Asia. We've got a really healthy UK business. I think the end deal that you referenced 4,000 units going into that market in Q3. We just diversified business with lots of areas that can contribute to the growth of the organization.

Matt Wilson: We have that across the three operating businesses we have, but speaking specifically about gaming, very diversified across that gaming footprint, across games and tables and systems, but also geographic markets. Australia has emerged as a really great contributor to our organization. Number one share, again, in the quarter, which is just a fantastic recognition of all the hard work that's gone into building our position in that market. We're a number one player in Asia.

Speaker Change: Speaking specifically to gaming...

Speaker Change: Very diversified across that gaming footprint across games and tables and systems, but also, you know, geographic markets.

Speaker Change: Australia's Emerge is a really great contributor to our organisation, number one share again in the quarter which is just a fantastic recognition of all the hard work that's gone into building our position in that market. We're a number one player in Asia, we've got a really healthy UK business, I think the Entame deal that you referenced, 4,000 units going into that market in Q3.

Matt Wilson: We've got a really healthy UK business. I think the Entame deal that you referenced, 4,000 units, will go into that market in Q3. We're just a diversified business with lots of areas that can contribute to the growth of the organization. I think that's the best way to think about Asia. Traditional markets today, Singapore, Macau, the Philippines, and then a broader set of opportunities over the coming years across the UAE, Japan. And so, yeah, and maybe you, Oliver, in terms of hitting this question. Yeah, thanks. Just at a high level, you know, we obviously...

Speaker Change: We're just a diversified business with lots of areas that can contribute to the growth of the organisation. I think that's the best way to think about Asia. The traditional markets today, Singapore, Macau, Philippines, and then a broader set of opportunities over the coming years across the UAE, Japan.

Matt Wilson: I think that's the best way to think about Asia. The traditional markets today, Singapore, Macau, Philippines, and then brought a set of opportunities over the coming years across the UAE, Japan.

Oliver Chow: And maybe you all are in terms of hitting these questions. Yeah, thanks. Just at a high level. We obviously executed really well here in the first half and the first half. We had a 15% a growth through a relative to prior year. To Matt's point earlier, that requires about 11% to get to our ultimate 2025 target. As we look through each business unit, we do see quite a bit of runway for us to continue to drive growth into the second half as well as early parts of 2025. At this point, I think from us, we know exactly what we need to do to be able to execute in gaming, who talked about the end deal.

Speaker Change: And so, yeah, and...

Oliver Chow: Yeah, thanks. Just at a high level, you know, we obviously executed really well here in the first half. In the first half, we had a 15% AUB growth relative to the prior year. You know, to Matt's point earlier, that requires about 11% to kind of get to our kind of ultimate 2025 target. So as we kind of look through each business unit, we do see quite a bit of runway for us to continue to drive growth into the second half as well as the early parts of 2025. So at this point, I think we know exactly what we need to do to be able to execute in gaming. We talked about the Entame deal.

Oliver Chow: Maybe you, Oliver, in terms of hitting these questions. Yeah, thanks. Just at a high level, you know, we obviously executed really well here in the first half. In the first half, we had a 15% EBITDA growth relative to prior year. You know, to Matt's point earlier, that requires about 11% to kind of get to our kind of ultimate 2025 target. So, as we kind of look through each business unit, we do see quite a bit of runway for us to continue to drive growth into the second half, as well as the early parts of 2020-2025. So, at this point, I think, from us, we know exactly what we need to do to be able to execute in gaming. We talked about the Entain deal. I think that's a great...

Oliver Chow: I think that's a great piece of business that not only gives us a profit here in the third quarter but also gives us long-tail recurring revenue over time. We'll continue to meaningfully increase our gaming operations install base and continue to drive units into our adjacent markets. In side play, you know, we're going to continue to focus on the side play engine that Matt mentioned earlier and the UA opportunities that are available to us to continue to drive our monetization metrics in the back half.

Oliver Chow: I think that's a great piece of business that not only gives us a either dot here in the third quarter, but also gives us a long tail recurring revenue over time. We'll continue to meaningfully increment our gaming operations in stall days, continue to drive units into our adjacent markets inside play. We're going to continue to focus on the side play engine that Matt mentioned earlier and the UAE opportunities that are available to us to continue to drive our monetization metrics in the back half. And so broadly speaking, on top of all of that, we'll continue to focus on margin enhancement and operational excellence.

Speaker Change: piece of business that now only gives us a ebitda here in the third quarter but also gives us low tail returning revenue over time will continue to meaningfully increment all our gaming operations installl base continue to drive units into

Speaker Change: into our adjacent markets.

Speaker Change: In SidePlay, you know, we're going to continue to focus on the SidePlay engine that Matt mentioned earlier and the UA opportunities that are available to us to continue to drive our monetization metrics in the back half.

Oliver Chow: And so broadly speaking, on top of all of that, we'll continue to kind of focus on margin enhancement and operational excellence. That's going to help us then bolster, again, either margins at the bottom line, taking it to the bottom line, or giving us the option to reinvest that back into the core so that we can drive sustainable growth over time. So, yeah, we still see quite a bit of runway in the second half and, obviously, as we head into 2025. Thanks, guys. Good luck! Yeah, thank you. We have a question from Annabel Li about Goldman.

Speaker Change: And so broadly speaking, on top of all of that, we'll continue to kind of focus on margin enhancement and operational excellence. That's going to help us then bolster, again, either margins at the bottom line, taking it to the bottom line, or giving us optionality to reinvest that back into the core so that we can drive sustainable growth over time. So, yeah, we still see quite a bit of runway here in the second half, and obviously as we head into 2025.

Oliver Chow: That's going to help us then bolster, again, either margins at the bottom line, taking it to the bottom line or giving us optionally to reinvest that back into the core so that we can drive sustainable growth over time. So, yeah, we still see quite a bit of runway here in the second half, and obviously as we head into 2025. Thanks, guys.

Annabel Li: Good luck. Thank you. We have a question from Annabel Lee with Goldman. Your line is now open. Hi, Madam Oliver. Thanks for taking my question. I'm so very strong North America unit shipments to 5,800 in the quarter, and looks like this was primarily due to adjacencies.

Speaker Change: Thanks, guys. Good luck.

Oliver Chow: Yeah, thank you.

Operator: We have a question from Annabel Li with Goldman. Your line is now open. Hi Matt and Oliver, thanks for taking my question.

Speaker Change: We have a question from Annabelle Lee with Goldman. Your line is now open.

Annabel Li: Yeah, great. Thanks for your question.

Annabelle Lee: Hi, Matt and Oliver. Thanks for taking my question. Some very strong North America unit shipments to 5,800 in the quarter, and looks like this was primarily due to adjacencies. Can you provide more colour of where the opportunity might be standing out, any future potential markets, and how we should think about this into FY25?

Matt Wilson: Can you provide more color on where the opportunity might be standing out, any future potential markets, and how we should think about this into FY 25? Yeah, great. Thanks for your question. Yeah, Trudeau to the gaming team driving that level of game sales in the quarter; that was an exceptional feature of the result. Yeah, it was a combination. This goes back to this idea of diversification. We've got a large classroom replacement business, but we also have this nice diversity across the adjacent markets. This is really the fruits of investments we made about two years ago in content and platform and technology to get us into these adjacent categories.

Matt Wilson: Yeah, kudos to the gaming team driving that level of game sales in the quarter. I thought it was an exceptional feature of the result. Yeah, it was a combination.

Speaker Change: Yeah, great. Thanks for your question.

Speaker Change: Yeah, kudos to the gaming team driving that level of game sales in the quarter, I thought it was an exceptional feature.

Matt Wilson: This goes back to this idea of diversification. We've got a large Class 3 replacement business, but we also have this nice diversity across the adjacent markets. This is really the fruits of investments we made about two years ago in content, platform, and technology to get us into these adjacent categories. I think probably the biggest success we've had was with the Oregon Lottery. So we announced that last year, and we've been rolling those games out sequentially, quarter after quarter. The games performed so well, in fact, that we got a reorder in Oregon for another 1,200 units. So that's really exciting.

Speaker Change: the result it was a combination is got back this idea di vers ification with a large class replace business but we also have this diversity across the adjacent market this is really the fruit of investments we made it about two years ago in content and platform and technology to get into these adjac category i think probably the bigest success with had was with the oregan lot y so we announced that last year would been rollingin those gains out sequentially quarter after quarter the performed so well infact that we got a order in or reg l that really exciting speaks of the quality of the content thatwe roleing across oregon which should in the t back now and other market there a few other canadian marketsthatwewere addressing

Matt Wilson: I think probably the biggest success we've had was with the Oregon Lottery. So we announced that last year we've been rolling those games out sequentially, quarter after quarter. The games perform so well, in fact, that we've got a re-order in Oregon and other 1200 units. So that's really exciting to speak to the quality of the content that we're rolling out across Oregon. We've shipped games into call back now in other VLT market.

Matt Wilson: This speaks to the quality of the content that we're rolling out across Oregon. We've shipped games into Quebec now and other VLT markets. There are a few other Canadian VLT markets that we're addressing, and we'll make some announcements about those soon. We've unlocked the Georgia COAM market, and we've got some great momentum there as well. So it's a broad spectrum of markets. Historical horse racing as well is making a contribution, Class 2. So again, this speaks to the diversity of product categories.

Matt Wilson: There's a few other Canadian VLT markets that we're addressing, and we'll make some announcements about soon. We've unlocked the Georgia Co-Am market, got some great momentum there as well. So it's a broad spectrum of markets, historical horse racing, as well as making a contribution class too. So again, a speech to the diversity of product categories. We're in the very early innings. As we look out into the order book across the coming quarters, there's further opportunities in adjacencies and just really nicely hedges our sales book across core classroom replacements, across adjacencies, across international markets. So again, as a CEO, it's great to have a diverse order book and contributions coming from all corners of the globe.

Speaker Change: We'll make some announcements about soon. We've unlocked the Georgia Co-Am market, got some great momentum there as well. So it's a broad spectrum of markets, historical horse racing as well as making a contribution class two. So again, it speaks to the diversity of product categories. We're in the very early innings, you know, as we look out into the order book across the coming quarters, there's further opportunities in adjacencies and just really nicely hedges our sales book across core class three replacements, across adjacencies, across international markets. So again, as a CEO , great to have a diverse order book and contributions coming from all corners of the globe. It's a good spot to be.

Matt Wilson: We're in the very early innings. As we look out into the order book across the coming quarters, there are further opportunities in adjacencies, and that really nicely hedges our sales book across core Class 3 replacements, across adjacencies, across international markets. So again, as a CEO, great to have a diverse order book and contributions coming from all corners of the globe. It's a good spot to be.

Matt Wilson: It's a good spot to play.

Matt Wilson: Thanks, Matt.

Jeff Stantial: Our next question is from Jeff Stantiel with Steeple. Your line is now open. Hey, you get afternoon, Matt and Oliver. Thanks for taking our question. Just one for us on the game-ups out of the business. Specifically, it's notable to us that the broader North America TAM continues to grow sequentially alongside the product momentum that you highlighted earlier in the call. Just given that we were all fairly used to for a while seeing steady contraction for really the better part of a decade and a half, heading into the COVID shutdown.

Operator: Our next question is from Jeff Stantial with Stiefel. Your line is now open.

Speaker Change: Our next question is from Jeff Stantial with Stiefel. Your line is now open.

Jeffrey Stantial: Hey, good afternoon, Matt and Oliver. Thanks for taking our question. Just one for us on the GameOps side of the business, specifically, it's notable to us that the broader North American TAM continues to grow sequentially alongside the product momentum that you highlighted earlier in the call, just given that we were all fairly used to seeing steady contraction for really the better part of a decade and a half heading into the COVID shutdown.

Jeff Stantial: Hey, good afternoon, Matt and Oliver. Thanks for taking our question.

Jeff Stantial: Just one for us on the GameOps side of the business, specifically, it's notable to us that the broader North America TAM continues to grow sequentially alongside the product momentum that you highlighted earlier in the call, just given that we're all fairly used to, for a while, seeing steady contraction for really the better part of a decade and a half.

Matt Wilson: You're Matt and Oliver. I'd love just to get your perspective on what you think is driving this structural expansion and least mix on North America casino floors and along the same lines. Maybe how you see this playing out looking out over the next several years. Thanks. I think it's a great observation and, like we called, the second quarter was an inflection point for up a huge step up in terms of net ads over a thousand units placed. So that's really encouraging and to the gaming off business plays, dividends over a very long time horizon. So Kudor, again to the team for driving that level of increased net ads to key feature of the result.

Jeffrey Stantial: Matt and Oliver, I'd love just to get your perspectives on what you think is driving this structural expansion and leased mix on North American casino floors and, along the same lines, maybe how you see this playing out over the next several years. Thanks.

Speaker Change: Heading into the COVID shutdown, Matt and Oliver, I'd love just to get your perspectives on what you think is driving this structural expansion and leased mix on North American casino floors, and along the same lines, maybe how you see this playing out, looking out over the next several years. Thanks.

Matt Wilson: I think it's a great observation. And like we called last quarter, the second quarter was an inflection point for us, a huge step up in terms of net ads over 1000 units placed. So that's really encouraging.

Speaker Change: I think it's a great observation and like we called

Speaker Change: I think last quarter, the second quarter was an inflection point for us, a huge step up in terms of net ads, over a thousand units placed.

Matt Wilson: And the gaming ops business pays dividends over a very long time horizon. So kudos again to the team for driving that level of increased net ads. It's a key feature of the result. Yeah, I observed what you observed; we see a structural expansion in the number of premium gaming ops units in the market since COVID. I think there's a number of factors that contribute to that.

Speaker Change: So that's really encouraging and, you know, the gaming off business plays dividends over a very long time horizon, so kudos again to the team for driving that level of increased net ads. It's a key feature of the result. Yeah, I observe what you observe. We see a structural expansion in the number of...

Matt Wilson: As you observe, we see a structural expansion in the number of premium gaming off units in the market since COVID. I think there's a number of factors that contribute to that. One of the big ones from a narrative perspective is coming out of COVID. If you remember, the casinos, when they reopened, shut down all their amenities. They shut down their buffets, their entertainment, their F&B outputs, and what was less was called nucleus of a business really driven by the games and the casinos floor, and the margins that were generated from that, from an operating perspective, were exceptional.

Speaker Change: premium gaming units in the market since COVID. I think there's a number of factors that contribute to that.

Matt Wilson: One of the big ones from a narrative perspective is coming out of COVID. If you remember, the casinos when they reopened, they shut down all their amenities, they shut down their buffets, their entertainment, their F&B outlets. And what was left was this core nucleus of a business really driven by the games and the casino floor. And the margins that were generated from that from an operator perspective were exceptional.

Speaker Change: One of the big ones, from a narrative perspective, is coming out of COVID, if you remember the casinos when they reopened, they shut down all their amenities, they shut down their buffets, their entertainment, their F&B outlets, and what was left was this core nucleus of a business.

Speaker Change: really driven by the games and the casino floor and the margins that were generated from that, from an operator perspective, were exceptional. So I think it really shined a light back on the fact that

Matt Wilson: So I think it really shined a light back on the fact that the games, the slot machines on casinos floor are really the economic engine of this industry. And so there has been a cute focus on the best games. And so I think operators also know that their best players generate a lot of their profits. And so the best players want to play the best games. And so I think giving access to players for those best games is something they've been really acutely aware of. So adding more premium lease games has been a consequence of that.

Matt Wilson: So I think it really shines a light on the fact that, you know, the games, the slot machines on casino floors are really the economic engine of this industry. And so there has been an acute focus on the best games. And so I think operators also know that their best players generate a lot of their profits. And so the best players want to play the best games. And so I think giving access to players for those best games is something they've been really acutely aware of.

Speaker Change: The games, the slot machines on casino floors, are really the economic engine of this industry. And so there has been an acute focus on the best games. And so I think operators also know that their best players generate a lot of their profits and so...

Speaker Change: The best players want to play the best games and so I think giving access to players for those best games is something they've been really acutely aware of. So adding more premium lease games has been a consequence of that. I think also the supply side of the industry, us and others, are spending a lot of R&D dollars

Matt Wilson: So adding more premium lease games has been a consequence of that. I think also the supply side of the industry, us and others, are spending a lot of R&D dollars, you know, premiumizing our great franchises. Things like Huff and even more Puff are a great example of that, or Squid Games, Dragon Train, you know, really putting a lot of effort, putting great game designers to work, building games for this category So it naturally drives demand. And again, the best players want to play the best games. And I think that's been the focus of the operators. That's our explanation for why the market's been expanding.

Matt Wilson: I think also the supply side of the industry, often others, spending a lot of R&D dollars, premiumizing our great franchises, things like Huff and even Morepuff is a great example of that or Squid Games, Drag and Train, really putting a lot of effort, putting our great game designers to work, building games with this category. So it naturally drives demand. And again, the best players want to play the best games. And I think that's been the focus of the operators. That's how explanation for why the market's been expanding.

Speaker Change: Yeah, premiumizing our great franchises, things like Huff and even more Puff is a great example of that, or Squid Games.

Speaker Change: a dragon train a really win a lot of effort puttingout great amazdesignoners to work building gains to this category so it naturally drives demand and again the best players more play the best gains and i think that's been at the focus of the operators that's our explanation for why the markethas been expanding

Matt Wilson: Thank you very much, Pat. Thank you.

Matt Wilson: Great. Thank you very much, Pat.

Speaker Change: Great, thank you very much, Pat.

Justin Barratt: We have a question from Justin Barratt with CLSA. Your line is now open. Hi, Matt. Thanks very much for your time today.

Operator: We have a question from Justin Barratt with CLSA. Your line is now open.

Speaker Change: We have a question from Justin Barratt with CLSA. Your line is now open.

Justin Barratt: Hi Matt, hi Oliver, thanks very much for your time today. Look, I think there's been a lot of focus on your growth trajectory out to 2025, but I wanted to ask a little bit more about growth thereafter and how you see growth playing out thereafter. And then, second of all, I just wanted to ask specifically about iGaming, your investment there, your continued investment there in order to grow the business long term and what that should mean for margins in the near term. Yeah, I think it's a fair question, and we have been fixated on the $1.4 billion.

Matt Wilson: Look, I think there has been a lot of focus on new growth trajectory out to 2025, but I wanted to ask a little bit more about growth. If there are after and how you see growth playing out there after.

Justin Barratt: Hi Matt, hi Oliver, thanks very much for your time today. Look, I think there's been a lot of focus on your growth trajectory out to 2025, but I wanted to ask a little bit more.

Speaker Change: about growth.

Matt Wilson: And then, second of all, I just wanted to ask specifically about eye gaming, your investment there, your continued investment there in order to grow the business long term, what that should mean for margins in the near term. Yeah, I think it's a fair question. And we have been excited on the 1.4 billion. It was a number that seemed very ambitious just a few years ago. And now, you can see the forecast kind of catching up to that level of ambition. We're making significant investments that will feel growth beyond 2025. I guess a really good example, practical example of that is investment in the new studio around Kelsey Foster up in Reno.

Speaker Change: thereafter and how you see growth playing out thereafter. And then second of all, I just wanted to ask specifically about iGaming, your investment there, your continued investment there in order to grow the business long-term and what that should mean for margins in the near term.

Matt Wilson: Yeah, I think it's a fair question, and we have been fixated on the $1.4 billion. It was a number that seemed very ambitious just a few years ago, but now, you know, you can see the forecast kind of catching up to that level of ambition. We're making significant investments that will fuel growth beyond 2025. I guess a really good example, practical example of that is the investment in the new studio around Kelsey Foster up in Reno. Kelsey starts later this year.

Speaker Change: Yeah, I think it's a fair question and we have been fixated on the $1.4 billion. It was a number that seemed very ambitious just a few years ago and now you can see the forecast kind of catching up to that level of ambition. We're making significant investments that will fuel growth beyond 2025. I guess a really good example, practical example of that, is the investment in the new studio around Kelsey Foster up in Reno. Kelsey starts later this year, she was one of IGT's biggest producing studios.

Matt Wilson: She was one of IGT's biggest producing studios. Yeah, she'll build a range of games that will hit the market late in 2025 or early in 2026. So making investments that pay, you know, over that time horizon beyond 2025. And so really setting this business up for success in perpetuity. We think we're still in the early stages. We have, you know, relatively low share positions in the majority of our market. So we can continue to take share in a market that is looking for, you know, great games. And that's what we focus on.

Matt Wilson: Kelsey starts later this year. She was one of IGTs. Not biggest producer in the world. She's producing studios. She'll build a range of games. They'll hit the market. They're late in 25, early in 26. So making investments that pay over that time horizon beyond 2025. And so really setting this business up to success in perpetuity. We think we're still in the early stages. We're relatively low share positions in the majority of our market. So we can continue to take share in a market that is looking for great gains. And that's what we focus on. So, to your point about eye gaming, if we go back to 2022, there's no false precision about the 1.4 billion.

Speaker Change: She'll build a range of games that will hit the market late in 2025, early in 2026. So making investments that pay.

Speaker Change: over that time horizon beyond two thousand and twenty five and so really settingin this business up for success

Speaker Change: in perpetuity. We think we're still in the early stages.

Speaker Change: We're relatively low share positions in the majority of our market, so we can continue to take share in a market that is looking for great gains, and that's what we focus on. To your point about iGaming, if we go back to 2022, there's no false precision about the $1.4 billion. The mix of contribution across our businesses is slightly different.

Matt Wilson: You know, to your point about iGaming, if we go back to 2022, there's no false precision about the $1.4 billion. But the mix of contribution across our businesses is slightly different than what we had anticipated back in 2022. I think at that point in time, you know, industry pundits and analysts forecasted a rate of expansion across iGaming that hasn't actually eventuated to this point. So we've seen a bit of a stalling in legalization.

Matt Wilson: The mix of contribution across our businesses is slightly different than what we had anticipated back in 2022. I think at that point in time, industry pundits analysts forecasted a rate of expansion across eye gaming that hasn't actually eventuated to this point. So we've seen a bit of a stalling in legalization. The good news is we still believe that that is going to happen. It'll likely happen on the other side of 2025. So that kind of hyper growth optionality that eye gaming presents us is a great growth opportunity for us in the years beyond 2025. So our job now is to really position our eye gaming business to be the leader in slots, which is now and ready to capture as much share as possible in those markets as they come online.

Speaker Change: than what we had anticipated back in 2022, I think at that point in time.

Speaker Change: You know, industry pundits, analysts forecasted a rate of expansion across iGaming.

Speaker Change: that hasn't actually eventuated to this point, so we've seen a bit of a stalling in legalisation. The good news is, you know, we still believe that that is going to happen. It'll likely happen on the other side of 2025, so that kind of hyper-growth optionality that iGaming presents us.

Matt Wilson: The good news is, you know, we still believe that that is going to happen. It'll likely happen on the other side of 2025. So that kind of hyper growth optionality that iGaming presents us is a great growth opportunity for us in the years beyond 2025. So our job now is to really position our iGaming business to be the leader in slots, which it is now, and ready to capture as much share as possible in those markets as they come online.

Speaker Change: is great growth opportunity for us in the years beyond 2025. So our job now is to really position our iGaming business to be the leader in slots, which it is now.

Matt Wilson: So, you know, we'll guide the market more specifically over time. For example, we've got the guidance out to $1.4 billion in 2025. We'll come back at some point in the future and reframe that. But from my vantage point, you know, these businesses have been set up in a way that growth is perpetual. There are opportunities across all three businesses, specifically iGaming, which we think will come online in a more material way beyond that time horizon of 2025. Our next question is from Andre Fromyhr.

Matt Wilson: So we'll guide the market more specifically over time. We've got the guidance out to 1.4 billion in 2025. We'll come back at some point in the future and reframe that. But I will say, from my vantage point, these businesses have been set up in a way that growth is perpetual. There's opportunities across all three businesses, specifically eye gaming, but we think we'll come online in a more material way beyond that time horizon of 2025.

Speaker Change: and ready to capture as much share as possible in those marke ters as they come online so we'll guide the market more specifically over time 'was the guid out the 's one point four bill in two thousand andtwentyfive well back at some point in the futureandreframe that

Speaker Change: But I will say, from my vantage point, you know, these businesses have been set up in a way that growth is perpetual. There's opportunities across all three businesses, specifically iGaming, but we think we'll come online in a more material way beyond that time horizon of 2025.

Speaker Change: © 2020 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Department of Agriculture

Oliver Chow: Our next question is from Andre from your with UBS your line is now open. Thank you. Hello. I just wanted to ask what you're seeing in terms of the health of the U.S. consumer and the sort of playing behavior, maybe an outlook for that and an expanding on that. How do you think that might be shaping the operators' willingness to invest in other replacements or growth at the moment? We're living in a very volatile news cycle, no doubt about that earlier. This week was a great example of that. I'm reminded that the macro, the markets, it's not the gaming industry, it's not the end market that we operate in.

Operator: Our next question is from Andre Fromyhr with UBS. Your line is now open. Thank you.

Speaker Change: Our next question is from Andre Frommier with UBS. Your line is now open.

Andre Frommier: Thank you. Hello. I just wanted to ask what you're seeing in terms of the health of the US consumer and their playing behaviour, maybe an outlook for that, and expanding on that, how you think that might be shaping the operators' willingness to invest in either replacements or growth at the moment?

Andre Fromyhr: Yeah, we're living in a very volatile news cycle, no doubt about that. Earlier this week was a great example of that.

Speaker Change: Yeah, we're living in a very volatile news cycle. No doubt about that. Earlier this week was a great example of that. But, you know, I'm reminded that, you know, the macro, the markets...

Matt Wilson: But, you know, I'm reminded that, you know, the macro, the markets, it's not the gaming industry, it's not the end market that we operate in. And so the specific areas that we're focused on, you look, you look at GGR numbers, they're looking very healthy; they're significantly above 2019, which is the pre-COVID era. You're seeing GGR levels being held on to by operators

Matt Wilson: The specific areas that we're focused on: you look at GGR numbers, they're looking very healthy. They're significantly of up to 2019, which is the pre-COVID era. You're seeing GGR levels being held on to by operators. We feel like the outlook is still in very good shape. I think it speaks to the natural resilience of our end markets. Gaming has proven to be a powerhouse that can operate through the cycles. We're looking into the order book. We're not seeing any deterioration in the forward-looking funnel. We're looking at our gaming office install base. You can see our RPDs are up year on year.

Speaker Change: It's not the gaming industry, it's not the end market that we operate in and so the specific areas that we're focused on...

Speaker Change: You look at GGR numbers...

Speaker Change: They're looking very healthy. They're significantly above 2019, which is the pre-COVID era. You know, you're seeing GDR levels being held onto by operators. So we feel like the outlook is still in very good shape, and I think it speaks to kind of the natural resilience of our end markets. Gaming has proven to be a powerhouse that can, you know, operate through the cycles. And so we're looking into the order book, we're not seeing any deterioration in the forward-looking funnel. You're looking at our Gaming Ops install base, you know, you can see our RPDs are up year on year.

Matt Wilson: So we feel like the outlook is still in very good shape. I think it speaks to kind of the natural resilience of our end markets. Gaming has proven to be a powerhouse that can, you know, operate through the cycles. And so, we're looking into the order book; we're not seeing any deterioration in the forward-looking funnel. You're looking at our gaming office install base, and you can see our RPDs are up year on year. You know, if you look at the site plan numbers, our RPDs are up.

Matt Wilson: You look at the cycling numbers, up to ours, up. All the lead indicates that we have a specific to our sector. We're in growth mode. We watch it with a healthy level of paranoia. If you go back through the cycles, gaming is an industry that is resilient. They can power through the cycles. We're going to continue to invest. If we hit with a massive macro shock wave, we know the levels to pull to navigate through that. But at the moment, our end markets look healthy. We're taking share. We're building great games. We're doing all the things that great companies do.

Matt Wilson: So, you know, all the lead indicators that we have that are specific to our sector are green. And so we're in growth mode; we watch it with a healthy level of paranoia. But if you go back through the cycles, gaming is an industry that is resilient and that can power through the cycles. And, you know, we're going to continue to invest. And if we are hit by a massive macro shock wave, you know, we know the levers to pull to navigate through that.

Speaker Change: you know, if you look at the CyFly numbers, yeah, Aftow's up, so you know, all the lead indicators that we have that are specific to our sector.

Speaker Change: Green. And so we're in we're in growth mode. We watch it with a healthy level of paranoia.

Speaker Change: But if you go back through the cycles, gaming is an industry.

Speaker Change: that is resilient and they can power through the cycles and you know we're going to continue to invest and if we hit with a massive macro shock wave you know we know the levers to pull to navigate through that but at the moment you know our end markets look healthy, we're taking share, we're building great games, we're doing all the things that great companies do and um you know again we'll continue to look at that and monitor it but I think the setup's

Matt Wilson: But at the moment, you know, our end markets look healthy. We're taking share, we're building great games, we're doing all the things that great companies do. And, you know, again, we'll continue to look at that and monitor it. But I think the setup is pretty opportunistic for us at the moment. Our next question is from Sriharsh Singh with Bank of America. Your line is now open.

Matt Wilson: Again, we'll continue. You'll look at that and monitor it. But I think they set up pretty opportunity for us at the moment. Okay, thanks.

Speaker Change: Yep, pretty opportunistic for us at the moment.

Speaker Change: Okay, thanks.

Sriharsh Singh: Our next question is from Srihar Singh with Bank of America. Your line is now open. I'm ask Oliver. Thank you. Just shift and focus is Australia. Quick question from my side.

Speaker Change: Our next question is from Sriharsh Singh with Bank of America. Your line is now open.

Sriharsh Singh: Hi Matt, Oliver, thank you. Just shifting focus to Australia, a quick question from my side is how do you plan to defend your number one market position in Australia now going forward and with respect to that

Sriharsh Singh: Have you planned to defend your number one market position in Australia now going forward? And what's expected of that? What are some of the games that you've commercialized beyond Drag and Shine in the last few months? And what's your plan for EGE to expect some big launches there? Thank you. Yeah, got a great question, AGE. Obviously, next week, I'm on a plane tonight to Sydney to be part of that. It's an exciting time to be a part of that Australian business. You know, if you go back a year, we didn't invest in the presentation at AGE.

Speaker Change: What are some of the games that you've commercialized beyond Dragonshine in the last few months, and what's your plan for AGE? Should we expect some big launches there? Thank you.

Operator: Yeah, great question, AGE. Obviously, next week, I'm on a plane tonight to Sydney to be part of that. It's an exciting time to be a part of that Australian business. You know, if you go back a year, we did an investor presentation at AGE. We talked about Dragontrain.

Speaker Change: no

Speaker Change: Yeah, great question AGE, obviously next week I'm on a plane tonight to Sydney to be part of that. It's an exciting time to be a part of that Australian business, you know, if you go back a year, we did an investor presentation at AGE, we talked about Dragontrain, we talked about the investment in Australia.

Matt Wilson: We talked about drag and train. We talked about the investment in Australia. Suddenly, we've gone to number one in that market. I think if we go back to, we had no false precision about how we'd get to the 1.4 billion. We had an ambition for the Australian business. We didn't really expect we'd be in the number one position in that market so quickly. So again, testament to what great games can deliver. Drag and train has been a huge feature of the result in Australia. I've said publicly, that's a multi-year story. These types of games have a very long tail on them.

Sriharsh Singh: We talked about the investment in Australia. Subsequently, we've gone to number one in that market. I think if you go back, we had no false precision about how we'd get to $1.4 billion.

Speaker Change: Subsequently, we've gone to number one in that market. I think it goes back to we had no false precision about how we'd get to the $1.4 billion. We had ambition for the Australian business. We didn't really expect we'd be in the number one position in that market so quickly. So again, testament to what great games can deliver. Dragon Train has been a huge feature of the result in Australia. I've said publicly that's a multi-year story. These types of games have a very long tail on them. If you look at the penetration rates across the key markets in Australia, we've got a lot of runway to execute that game.

Matt Wilson: We had ambitions for the Australian business, but we didn't really expect we'd be in the number one position in that market so quickly. So again, testament to what great games can deliver. Dragontrain has been a huge feature of the results in Australia. I've said publicly, that's a multi-year story.

Matt Wilson: These types of games have a very long tail on them. If you look at the penetration rates across the key markets in Australia, we've got a lot of runway to execute that game. Importantly, games five and six were approved overnight.

Matt Wilson: If you look at the penetration rates across the key markets in Australia, we've got a lot of runway to execute that game. Importantly, games five and six were approved overnight. So we go into the AGE show. We'll give it games five and six of Drag and Train. Ready to sell. We're taking orders down there. So that'll be just another kind of wind in our sail as we continue to execute in Australia. But beyond that, we're making huge investments to be a number one supply down there. We've got Jewel of the Dragon. Again, we built for the US market.

Matt Wilson: So we go into the AGE show, we'll be with games five and six of Dragontrain ready to sell. We'll be taking orders down there. So that'll be just another kind of wind in our sail as we continue to grow in Australia. But beyond that, we're making huge investments to be a number one supplier down there. We have Jewel of the Dragon.

Speaker Change: Importantly, Games 5 and 6 were approved overnight, so if we go into the AGE show, we'll be with Games 5 and 6 of Dragon Train, ready to sell, we'll be taking orders down there, so that'll be just another kind of wind in our sail as we continue to execute in Australia. But beyond that, we're making huge investments to be a number one supplier down there. We've got Jewel of the Dragon, a game we built for the U.S. market that we've taken to Australia. It's doing very well on the charts.

Matt Wilson: Again, we built it for the US market, and we've taken it to Australia. It's doing very well on the charts in its early days, but we see great opportunity there. We've got Shenlong Unleashed, a great game by a great young game designer, Jack, down there in Australia. He did Dragon Unleashed, which really was one of the first games to build the momentum that we had in the Australian market. So we took that game, we built some learnings into it, and we launched that at AGE. That's also been approved.

Matt Wilson: It was taken to Australia. It's doing very well on the chart early days. But we see great opportunity there. We've got Shen Long Unleashed, a great game out of a great young game designer, Jack down there in Australia. He did drag and unleashed, which really was one of the first games to build the momentum that we had in the Australian market. So we take that game. We build some learnings into it. We launch that at AGE. That's also approved. So it's really a broad and deep portfolio of games. And we've got to this number one share position in the market.

Speaker Change: early days, but we see great opportunity there.

Speaker Change: We've got Shenlong Unleashed, a great game out of a great young game designer, Jack.

Speaker Change: down there in Australia. He did Dragon Unleashed, which really was one of the first games to build the momentum that we had in the Australian market. So we take that game, we build some learnings into it, we launch that at AGE, that's also approved. So it's really a broad and deep portfolio of games. And we got to this number one share position in the market and we like it. We want to stay there, so we're investing appropriately.

Matt Wilson: So it's really a broad and deep portfolio of games. And we got to this number one share position in the market, and we like it. We want to stay there, so we're investing appropriately. But I mean, back to the idea that this business is set up in a really unique way that we build great games for a market like Australia. We take them to the US; we deploy them in gaming operations like we do with Dragon Train.

Matt Wilson: And we like it. We want to stay there, so we're investing appropriately.

Matt Wilson: But I mean, back to the idea of this business is set up in a really unique way that we build great games for a market like Australia. We take them to the US. We deploy them in gaming ops like we have with Drag and Train. We then take those games, deploy them in the cycle. We take those games and build them into the Eye gaming platform. So every dollar investment we push through the R&D engine, we can sweat those assets across a range of businesses that really fit together. So you're feeling good about the lineup for AGE next week.

Speaker Change: i mean back to the idea of this business has set up in a really unique way that we build great games for a market like australia

Matt Wilson: We then take those games and deploy them into CyPlay. We take those games and build them into the iGaming platform. So every dollar investment we push through the R&D engine, we can use those assets across a range of businesses that really fit together. So you're feeling good about the lineup for AGE next week. It's going to be exciting to be with the team down there. They've done a lot of work to get us into the number one position. We want to make sure we hold on to that.

Speaker Change: We take them to the US, we deploy them in gaming ops like we have with Dragontrain.

Speaker Change: We then take those games, deploy them into CyPlay, we take those games and build them into the iGaming platform, so every dollar of investment we push through the R&D engine, we can sweat those assets across.

Speaker Change: A range of businesses that really fit together, so you're feeling good about the line-up for AGE next week. It's going to be exciting to be with the team down there that have done a lot of work to get us into the number one position. We want to make sure we hold on to that.

Matt Wilson: It's going to be exciting to be with the team down there that done a lot of work together into the number one position. We want to make sure we hold onto that. Thank you.

Matt Wilson: I'd now like to hand the call back to Matt for any closing remarks. Thank you. This quarter marks our one year anniversary on the ASX. I am also pleased to announce that we were added to the Russell 1000 Index in late June. So, selecting our Continuum Mentor and Market Confidence in Light & Wonder, I'm very proud of what was accomplished along the way and the recognition of our strong performance with the index inclusion on both exchanges. Thank you again for your continued support.

Matt Wilson: I'd now like to hand the call back to Matt for any closing remarks. Thank you.

Speaker Change: like it

Matt Wilson: Thank you. This quarter marks our one-year anniversary on the ASX. I am also pleased to announce that we were added to the Russell 1000 Index in late June, reflecting our continued momentum and market confidence in Light & Wonder. I am very proud of what we have accomplished along the way and the recognition of our strong performance through the inclusion of the Russell 1000 Index on both exchanges. Thank you again for your continued support. On behalf of everyone on the Light & Wonder team, we look forward to achieving additional milestones and creating greater value for all of our stakeholders. Thank you, and have a great rest of your day.

Speaker Change: I'd now like to hand the call back to Matt for any closing remarks.

Matt Wilson: Thank you. This quarter marks our one year anniversary on the ASX.

Speaker Change: I am also pleased to announce that we were added to the Russell 1000 Index in late June . Reflecting our continued momentum and market confidence in Light & Wonder, I am very proud of what was accomplished along the way and the recognition of our strong performance with the index inclusion on both exchanges. Thank you again for your continued support. On behalf of everyone on the Light & Wonder team, we look forward to achieving additional milestones and creating greater value for all of our stakeholders. Thank you and have a great rest of your day.

Matt Wilson: On behalf of everyone on the Light & Wonder team, we look forward to achieving additional milestones in creating greater value for all of our stakeholders. Thank you, and have a great rest of your day.

Operator: Thank you, Cluj, today's call. Thank you all for your participation. You may now just

Operator: That concludes today's call. Thank you all for your participation. You may now disconnect your lines.

Matt Wilson: hi

Speaker Change: That concludes today's call. Thank you all for your participation. You may now disconnect your line.