The Light & Wonder Inc. (ASX: LNW) share price is in focus today after the company released its second quarter 2026 earnings, revealing a 2% year-on-year increase in consolidated revenue to US$828 million, and a 9% rise in consolidated AEBITDA to US$383 million.
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What did Light & Wonder report?
- Consolidated revenue: US$828 million, up 2% year over year
- Consolidated AEBITDA: US$383 million, up 9% year over year (46% margin, +200bps)
- Net income: US$120 million, up 26% year over year
- Adjusted NPATA: US$156 million, up 16% year over year
- Adjusted free cash flow: US$156 million, up 50% year over year; conversion rate 41%
- Recurring revenue: US$580 million, representing 71% of total revenue
What else do investors need to know?
Light & Wonder continues to strengthen its recurring revenue streams, with growth across its Gaming and iGaming businesses outweighing continued market softness in SciPlay. Gaming operations posted an 18% revenue increase, particularly through its premium and Grover product lines, while iGaming revenue rose 14% to US$92 million thanks to strong first-party content.
The company returned US$134 million to shareholders through its buy-back program in the quarter and maintains a deliberate focus on investing in R&D and AI initiatives. Net debt leverage sits at 3.4x, with a clear plan to reduce it below 3.0x during the first half of FY27, aiming for an investment-grade profile.
What did Light & Wonder management say?
Light & Wonder's President and CEO, Matt Wilson, said:
Our second quarter results reflect continued execution of our content-centric operating model, with broad-based growth, margin expansion and quality earnings across all three businesses. We continue to see the benefits of our sustained investment in studios and content, as our franchises drive strong game performance across the portfolio. Gaming momentum remained robust, with our North American premium installed base growing for the 24th consecutive quarter, and Grover continuing to scale across existing and new markets.
What's next for Light & Wonder?
Looking ahead, Light & Wonder reaffirmed its outlook for mid- to high-single digit consolidated AEBITDA growth in FY26, expecting earnings to be weighted toward the second half, consistent with prior periods. The company is targeting a net debt leverage ratio below 3.0x by the first half of 2027 and aims for continued expansion in its core gaming and digital businesses, supported by investments in content and new market entries.
Management remains committed to its FY2028 targets of over US$10.55 in EPSa and US$2.0 billion consolidated AEBITDA, maintaining steady capital investment and focusing on recurring, predictable earnings streams.
Light & Wonder share price snapshot
The Light & Wonder share price has underperformed the S&P/ASX 200 index (ASX: XJO) by some distance over the past 12 months with a decline of 20%.
