Light & Wonder's 2025 Q2 Earnings Call: Unraveling Contradictions in Sweepstakes, Tariffs, and Cash Flow Efficiency

Sweepstakes impact on social casino markets, impact of tariffs on gaming operations, Grover acquisition and integration, free cash flow conversion and efficiency are the key contradictions discussed in Light & Wonder's latest 2025Q2 earnings call.



Earnings Growth and Business Strategy:
- Light & Wonder reported EBITDA of $352 million for Q2 2025, up 7% year-over-year, with a margin optimization program increasing consolidated AEBITDA margin to 44%.
- The growth was driven by disciplined execution on core business operations, strategic investments, and contributions from the Grover acquisition.

Gaming Segment Performance:
- Gaming operations segment saw $528 million in revenue, with AEBITDA increasing 3% year-over-year, driven by strong North American installed base growth and the contribution from Grover.
- The segment's success was attributed to premium game franchises and effective strategic execution in a dynamic market environment.

iGaming Expansion and Record Revenue:
- iGaming revenue reached a record $81 million, up 9% year-over-year, with AEBITDA margin improving to 35%.
- This growth was driven by a focus on proprietary content and strategic partnerships, which led to increased game performance and expanded market reach.

Challenges and Opportunities in Social Casino:
- SciPlay saw record revenues in Quick Hit Slots and 88 Fortunes, but faced external challenges from sweepstakes gaming impacting social casino market growth.
- The company is mitigating this impact by shifting marketing strategies and focusing on direct-to-consumer platform growth, now contributing 18% of revenue.