Light & Wonder’s second quarter results fell short of Wall Street’s expectations, prompting a significant negative market reaction. Management attributed the revenue decline primarily to delayed game sales in international markets and cautious purchasing by North American operators. CEO Matthew Wilson noted, “We experienced some operator apprehension on slot purchases early in the quarter and saw a pushout of timing for some of our units sold into Canada.” The integration of Grover Charitable Gaming contributed positively, but these gains were offset by external factors, including macroeconomic uncertainty and evolving tariff policies, which created a more complex decision cycle for customers.
Is now the time to buy LNW? Find out in our full research report (it’s free).
Light & Wonder (LNW) Q2 CY2025 Highlights:
- Revenue: $809 million vs analyst estimates of $846.2 million (1.1% year-on-year decline, 4.4% miss)
- Adjusted EPS: $1.11 vs analyst expectations of $1.40 (20.8% miss)
- Adjusted EBITDA: $352 million vs analyst estimates of $351.8 million (43.5% margin, in line)
- Operating Margin: 25%, up from 21.4% in the same quarter last year
- Market Capitalization: $7.29 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Light & Wonder’s Q2 Earnings Call
- Rohan Gallagher (Jarden) asked about the rationale and timing for transitioning to a sole ASX listing. CEO Matthew Wilson explained the process followed extensive investor engagement and aims to optimize shareholder value by consolidating liquidity in a market with deep gaming sector expertise.
- Barry Jonas (Truist) sought details on the new guidance range and visibility into the cadence of results. Wilson clarified the broadened range reflects both Grover’s contribution and potential externalities like tariffs, while reiterating commitment to long-term targets.
- Matthew Ryan (Barrenjoey) questioned the pace of Grover integration and whether recent unit growth was sustainable or one-off. Wilson described the 600 net adds as organic and highlighted strong cultural alignment and operational momentum in the acquired business.
- David Fabris (Macquarie) probed operator purchasing delays and the likelihood of improved buying in the second half. CFO Oliver Chow pointed to improved market sentiment and noted increased shipments to Canada and Asia as positive signs for upcoming quarters.
- Ryan Sigdahl (Craig-Hallum) asked about the impact of sweepstakes gaming on SciPlay and whether marketing spend could be shifted to more favorable states. Wilson acknowledged the competitive impact but emphasized a focus on direct-to-consumer growth and targeted user acquisition.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of Grover integration and expansion into new markets like Indiana, (2) the rebound in international hardware sales and realization of delayed shipments, and (3) margin sustainability amid ongoing operational optimization. Additionally, we will watch regulatory developments affecting both land-based and digital gaming, as well as the execution on new content launches and digital platform growth.
Light & Wonder currently trades at $86, down from $90.98 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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