Light & Wonder (LNW) reported its Q4 results on Tuesday, indicating a net loss due to the impact of a settlement with rival game developer Aristocrat. Revenue increased by 12% year-on-year in the quarter, making it the strongest period of the year. Overall, revenue for the year increased 4%, while net income decreased 18%.
LNW agreed to pay Aristocrat $127.5 million to settle a dispute between the companies last month. Aristocrat claimed LNW used stolen math algorithms to develop its games Dragon Train and Jewel of the Dragon.
That payment led to a loss this quarter, but the company continues to grow. For the three months ending December 31, it generated $891 million in revenue, up from $841 million in the previous quarter and $791 million in Q4 2024.
Post-Settlement Forecast
The company attempted to put a positive light on the payment to Aristocrat, stating, “This settlement protects the interests of our customers, employees, and shareholders, and allows us to continue our focus on developing and delivering the market-leading content our customers expect, without distraction or disruption.”
Discounting the penalty, the company had a good year with revenue growing each quarter to its peak in Q4. For the full year, it generated $3.3 billion, up 4% from $3.2 billion in 2024. The impact of the Aristocrat settlement reduced full-year income from $336 million to $276 million.
Gaming revenue increased 17% in the quarter, with machine sales generating $234 million, up 20%. Gaming operations revenue also increased considerably, up 35% to $237 million.
In a press release, Matt Wilson, President and CEO of LNW, said, “We closed out 2025 with another strong quarter, delivering double-digit year-over-year growth in both revenue and cash flows.”
Its SciPlay arm continues to struggle as more and more states target social and sweepstakes casinos. In Q4, revenue in the social gaming sector fell 4%.
The company’s stock price fell following the results. Its price dropped from AU$145 to AU$133. That represents a decline of over 27% from its price in January, before the Aristocrat settlement was announced.
Its price is now back to around the same value as when it left the NASDAQ for a sole listing on the Australian Securities Exchange in November last year.
Company Investing in Product & Talent
The Aristocrat scandal emerged after LNW hired Emma Charles, a former company employee. She brought confidential documents that enabled LNW to develop games using Aristocrat’s company secrets. LNW said Charles did this “without our knowledge and in direct violation of our policies.“
The company said it will continue to invest in product innovation and talent, with Wilson adding, “Looking ahead, we will remain focused on investing in product innovation and talent to strengthen our recurring revenue model, build on this momentum, and enhance our global competitive position as we progress toward our 2028 financial targets.”
LNW is targeting an Adjusted EBITDA of $2 billion by 2028, up from the $1.4 billion target for 2025, which it exceeded by $40 million. It also aims to increase Adjusted NPATA per share to $10.55. For 2025, this was $6.69.
Debt High, but Manageable, Says CFO
The company’s principal face value of debt outstanding was $5.2 billion, translating to a net debt leverage ratio of 3.5x.
CFO Oliver Chow said, “Importantly, we maintained our net debt leverage ratio within our targeted range following the Grover acquisition and ASX listing transition, and we expect to continue deleveraging throughout 2026, supported by the strength of our business profile, absent any high return capital allocation opportunities.”
LNW acquired Grover Gaming last year for $850 million in cash plus a four-year revenue-based earn-out of up to $200 million in cash. To finance the acquisition, it secured an $800 million loan. It said it has now been able to reprice its loan, reducing applicable interest rates by 25 basis points. This will result in a decrease in annualized interest costs of approximately $5 million.
Chow added, “Our priorities remain unchanged: disciplined cost management, sustainable margin growth, and continued improvement in both the quality and quantum of cash flows over time.”
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Light & Wonder (LNW) reported its Q4 results on Tuesday, indicating a net loss due to the impact of a settlement with rival game developer Aristocrat. Revenue increased by 12% year-on-year in the quarter, making it the strongest period of the year. Overall, revenue for the year increased 4%, while net income decreased 18%. LNW
The post Light & Wonder Q4 Results: Aristocrat Settlement Leads to Loss Despite Period of Growth appeared first on CasinoBeats.