Light & Wonder Posts Strong Second Quarter 2026 Results with Higher Earnings, Margin Expansion, and Robust Cash Flow
LAS VEGAS – Light & Wonder, Inc. (ASX: LNW) announced its financial results for the second quarter ended reporting continued profitability, expanding margins, and healthy cash generation despite a dynamic market environment. The company credited its performance to its diversified business portfolio, disciplined investment strategy, and continued focus on recurring revenue streams across its Gaming, SciPlay, and iGaming businesses.
During the quarter, consolidated revenue increased 2% year over year to $828 million, supported primarily by double-digit growth in Gaming Operations, Grover, and iGaming. The company’s strategy of expanding recurring revenue sources continued to strengthen earnings quality while creating a more predictable and resilient revenue base.
Net income climbed significantly to $120 million, representing a 26% increase from the same period last year. Diluted earnings per share rose even faster, increasing 38% year over year to $1.53. Operating cash flow also improved substantially, with net cash provided by operating activities reaching $241 million, more than doubling compared with the prior-year quarter and reflecting a 127% increase.
Profitability Continues to Improve
Light & Wonder reported another quarter of expanding profitability across all operating segments. Consolidated Adjusted EBITDA reached $383 million, representing 9% year-over-year growth, while margins improved across Gaming, SciPlay, and iGaming.
The company’s adjusted Net Profit After Tax and Amortization (NPATA) increased 16% to $156 million, demonstrating continued operational efficiency and disciplined cost management. On a per-share basis, adjusted earnings reached $1.99, reflecting an impressive 26% increase over the previous year.
Cash generation remained one of the company’s strongest financial attributes. Adjusted free cash flow totaled $156 million, rising 50% year over year and providing additional flexibility for shareholder returns, debt reduction, and strategic investments.
Management noted that recurring revenue continues to represent an increasingly important portion of overall earnings. This category includes Gaming Operations, Grover leasing activities, Gaming Systems maintenance, table product service agreements, SciPlay, and iGaming operations, all of which contribute to stable and predictable long-term cash flows.
Gaming Business Delivers Another Solid Quarter
The Gaming division remained the company’s largest revenue contributor, generating $554 million, an increase of 5% compared with the second quarter of 2025.
Growth was primarily fueled by Gaming Operations, where revenue climbed 18% to $247 million, reflecting continued customer demand for premium leased gaming machines and expansion across existing casino customers.
Table Products also posted another strong performance, with revenue increasing 13% to $62 million, benefiting from continued adoption of innovative table game technologies and electronic table solutions.
Gaming machine sales experienced a modest decline of 4% year over year. Management attributed this decrease mainly to lower customer purchasing activity related to fewer new casino openings, expansion projects, and adjacent market opportunities during the quarter. Despite shipping fewer machines, average selling prices remained relatively stable, highlighting continued customer willingness to invest in premium gaming products.
Installed Base Continues to Expand
One of the company’s most notable achievements during the quarter was the continued expansion of its premium leased gaming machine footprint.
The North American premium installed base grew for the 24th consecutive quarter, adding 652 units sequentially and more than 2,550 units over the past year. This consistent expansion demonstrates sustained demand for Light & Wonder’s premium content and gaming hardware across casino operators.
Grover, the company’s leased gaming business, also continued its steady growth trajectory by adding 277 installed units during the quarter, expanding its presence across both existing and new customer locations.
From a hardware perspective, Light & Wonder shipped 8,796 new gaming machines worldwide during the quarter. More than 4,900 units were delivered across North America, reinforcing the company’s strong competitive position within one of its most important markets.
iGaming and SciPlay Maintain Positive Momentum
The company’s digital businesses continued to deliver strong operational performance.
The iGaming division recorded another quarter of double-digit growth, with revenue increasing 14% while Adjusted EBITDA improved 18% year over year. Management credited this performance to expanding first-party game content, growing partnerships with online casino operators, and sustained customer demand throughout North America.
Although the United Kingdom introduced higher gaming taxes during the period, the company stated that strong North American growth more than offset these regulatory headwinds.
SciPlay also continued executing its long-term digital strategy. Direct-to-consumer revenue increased further during the quarter as more players engaged directly with the company’s gaming ecosystem. Average revenue per paying user also improved sequentially despite increasingly mature conditions within the global social casino market.
Continued Investment in Content and Innovation
President and Chief Executive Officer Matt Wilson said the quarter highlighted the success of Light & Wonder’s content-driven operating strategy.
According to Wilson, the company’s continued investment in game development studios, original intellectual property, and premium content has strengthened franchise performance across multiple gaming categories. He emphasized that innovative game portfolios remain central to the company’s competitive advantage.
Wilson also noted that Gaming Operations maintained exceptional momentum, with the premium installed base growing for a 24th straight quarter while Grover continued expanding into both established and emerging markets.
Digital businesses likewise remained strong, with iGaming achieving another period of double-digit revenue and earnings growth despite higher gaming duties in the United Kingdom. Meanwhile, SciPlay successfully expanded its direct-to-consumer business, improving player engagement and monetization.
Looking ahead, Wilson said management remains focused on disciplined execution, product innovation, investment in talent, and achieving the company’s previously announced financial targets for both 2026 and 2028.
Capital Allocation Remains Balanced
Chief Financial Officer Oliver Chow highlighted the company’s disciplined approach to capital allocation, emphasizing that strong cash generation has enabled both shareholder returns and continued investment in long-term growth initiatives.
During the second quarter, Light & Wonder accelerated its share repurchase program by returning $134 million to shareholders through stock buybacks. During the first six months of 2026, total repurchases reached $156 million.
Since initiating its repurchase program in March 2022, the company has now returned more than $2.1 billion to shareholders through the repurchase of approximately 26.2 million shares or CHESS Depositary Interests (CDIs). Those repurchases represent roughly 27% of the company’s outstanding shares before the buyback program began.
Approximately 88% of the currently authorized repurchase program has now been utilized, leaving about $180 million available for future repurchases.
Chow also noted that while the company remains committed to returning capital to shareholders, future priorities will increasingly shift toward reducing leverage and strengthening the balance sheet.
Debt Position and Financial Flexibility
At the end of the second quarter, Light & Wonder reported $5.2 billion in principal debt outstanding, resulting in a net debt leverage ratio of 3.4x.
Management indicated that leverage remains comfortably within its previously communicated target range and reiterated its commitment to reducing net leverage below 3.0x during the first half of 2027. Achieving this objective would move the company closer to an investment-grade financial profile while preserving flexibility for future growth opportunities.
The company also continues investing in artificial intelligence initiatives, technology infrastructure, and digital capabilities. Executives believe these investments will improve operational efficiency, enhance product development, and support long-term earnings growth across the business.
Outlook for 2026
Light & Wonder reaffirmed its full-year 2026 financial guidance, expressing confidence that earnings momentum will strengthen during the second half of the year.
Management expects overall business performance to follow a pattern similar to 2025, supported by a steadily expanding recurring revenue base and customer investment cycles related to gaming equipment and technology upgrades.
For the full year, the company continues to forecast mid- to high-single-digit growth in consolidated Adjusted EBITDA. Executives believe ongoing investments in premium gaming content, digital expansion, operational excellence, and disciplined capital allocation position Light & Wonder to achieve its long-term strategic objectives while delivering sustainable value for shareholders.
With a growing installed base, expanding digital operations, strong cash flow generation, and continued investment in innovation, Light & Wonder enters the second half of 2026 well positioned to maintain its growth trajectory and pursue its ambitious financial targets for the coming years.
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