Grover Integration Poses Execution Risks as Light & Wonder Sets Bold Growth Goals

Investor Day Highlights Ambitious Growth

Light & Wonder (ASX: LNW), a global leader in gaming technology and services, presented a comprehensive update at its 2025 Investor Day, outlining a clear path to sustained growth and operational excellence. The company set a 2025 consolidated Adjusted EBITDA (AEBITDA) target of $1.4 billion, reflecting confidence in its diversified portfolio and strategic initiatives.

CEO Matt Wilson emphasized the company’s robust foundation, driven by a unique cross-platform business model that spans land-based gaming, social gaming through SciPlay, iGaming, and the recently acquired Grover Charitable Gaming. This acquisition marks a significant step into the charitable gaming market, which offers sizeable growth opportunities supported by favorable legislative trends and a loyal customer base.

Financial Momentum and Market Leadership

Since 2022, Light & Wonder has delivered a 13% compound annual growth rate (CAGR) in consolidated revenue and a 17% CAGR in AEBITDA, underscoring strong operational execution. The company’s strategic investments in research and development (R&D) have fueled innovation, with a $434 million R&D spend in 2024 alone, up 28% from 2022.

Market share gains are notable, with Light & Wonder holding the #1 position in North American premium installed base and global game sales. The company’s portfolio includes top-performing titles like "Huff N’ Puff" and "Double Blazing 777," supported by a high-performance culture and a global network of 23 R&D studios.

Grover Charitable Gaming Integration and Growth

The integration of Grover Charitable Gaming is a strategic priority, leveraging Grover’s vertically integrated model and extensive distribution network across multiple U.S. states. Grover’s 2024 revenue reached approximately $135 million with a 29% CAGR since 2022, and adjusted EBITDA of $111 million, reflecting a strong margin profile.

Light & Wonder plans to expand Grover’s device footprint, increase profitability per device, and enter additional jurisdictions, including newly legalized states like Indiana. This move diversifies Light & Wonder’s revenue streams and positions it well in a fast-growing adjacency with meaningful social impact.

Strategic Focus on Operational Efficiency and Shareholder Returns

Alongside growth ambitions, Light & Wonder is committed to disciplined capital allocation and operational efficiency. The company has reduced net leverage to 3.0x from a peak of 10.5x in 2020 and maintains a healthy EBITDA margin of around 40% as of Q1 2025.

Shareholder value remains a priority, with a $1 billion share repurchase program underway following the completion of a $750 million program in 2024. These initiatives reflect confidence in the company’s cash flow generation and long-term financial profile.

Looking Ahead: Targets to 2028

Light & Wonder’s vision extends to 2028, targeting $2.0 billion in consolidated AEBITDA and doubling adjusted NPATA per share to over $10.55. The company aims to grow market share by 400 basis points in North America’s premium installed base and expand its global footprint across gaming verticals.

With a strong leadership team, a culture of innovation, and a diversified product offering, Light & Wonder is well-positioned to capitalize on evolving market dynamics and regulatory opportunities worldwide.