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Highlights

  • LNW reported a 2.5% YoY increase in revenue to USD 774 million in Q1FY25, with an EBITDA margin of 36.3% and return on equity of 13.1%
  • Rising wages in Australia and the Reserve Bank’s recent interest rate cuts are expected to boost discretionary spending
  • The company targets a consolidated AEBITDA of USD 2.0 billion by 2028

Light & Wonder, Inc. (ASX:LNW) is an ASX-listed cross-platform global games entity engaged in digital markets and content development. In the first quarter of the financial year 2025 (1QFY25), the company recorded a 2.5% year-on-year growth in revenue, reaching USD 774 million, compared to USD 756 million in the same quarter of FY24. Operating income rose to USD 170 million in 1QFY25, up from USD 165 million. However, net income remained flat year-on-year at USD 82 million.

During the reported period, EBITDA margin stood at 36.3%, significantly higher than the industry median of 19.9%. Return on equity for the period reached 13.1%, compared to the industry median of 2.3%.

Meanwhile, the debt-to-equity ratio stood at 6.30x, higher than the industry median of 0.68x, and the cash conversion cycle increased to 47.9 days.

Macroeconomic Tailwinds

According to the data released by the Australian Bureau of Statistics (ABS), in March 2025 total wages and salaries paid by employers in Australia rose by 5.8% annually to AUD 104.8 billion. On a quarterly basis, compensation increased by 1.1% in March 2025.

Supporting this consumer momentum, the Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points on 20 May 2025. The RBA has shown openness to further reduce the cash rate if economic conditions deteriorate. This monetary easing, coupled with the rise in wages, is expected to stimulate consumer spending, particularly benefiting the consumer discretionary sector.

Recent Updates

In a recent update, the company announced that its New Term Loan A Facility, used to finance the acquisition of Grover Gaming’s charitable assets, will mature in May 2028, with quarterly repayments starting September 2025. The loan carries an interest rate of SOFR + 1.75% or base rate + 0.75% and includes specific covenant limits.

Outlook

Looking ahead, the company has reaffirmed its USD 1.4 billion consolidated AEBITDA target and adjusted NPATA range for 2025, excluding contributions from its recent acquisitions. Furthermore, it aims to achieve a consolidated AEBITDA of USD 2 billion and double its adjusted NPATA per share by 2028, targeting over USD 10.55 per share.

Share performance of LNW

LNW shares gained 5.83% on 26 May 2025 to close at AUD 136.27 per share. Over the last nine months, the share price has decreased by nearly 15.30%, and in a month, it has increased by around 4.42%.

The 52-week high of LNW is AUD 181.25, recorded on 3 March 2025, and 52-week low is AUD 122.00, recorded on 22 April 2025.

Support and Resistance Summary

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 26 May 2025. The reference data in this report has been partly sourced from EODHD/Others.

 

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.