LNW -8.34% was hit today, down as much as 12.5% at the lows after delivering a mixed March-quarter update, with revenue and earnings missing expectations, though margins held up better than feared and management reiterated confidence in the FY26 growth profile. The market focused on the revenue miss across Gaming and SciPlay, while iGaming was the bright spot. Management also framed the year as being second-half weighted, similar to FY25.
March Quarter Highlights
- Revenue US$790m, below consensus expectations for US$842.3m.
- Gaming revenue was US$512m, below expectations for US$552m.
- SciPlay revenue was US$187m, also below expectations for US$200.4m.
- iGaming revenue was US$91m, ahead of expectations for US$86m.
- Adjusted EBITDA was US$327m, a 5.6% miss to consensus
- Adjusted EPS was US$1.45 per share, ~6.4% below consensus
Clearly a miss, but the market sold the stock too aggressively this morning – down ~12.5% at the lows, before ending down ~8% – which is about right.
The obvious negative was the top-line miss, particularly in Gaming, which remains the core earnings driver. That said, the margin outcome was solid, which is important for a business where operating leverage, recurring revenue and cash conversion are central to the investment case. CFO Oliver Chow highlighted continued margin expansion, scaling cash flow and a stronger cash conversion profile, while also noting deliberate investment in AI and infrastructure to support both growth and efficiency over time.
Management’s outlook was also positive, expecting full-year consolidated adjusted EBITDA growth in the mid- to high-single digits, which is aligned with current consensus (+8.3%)
Clearly a softer quarter, but the stock has been weak leading into it, and FY guidance is pretty much where we hoped. The key will be whether the promised second-half earnings momentum comes through, but we’ll remain patient holders for now.
MM is cautiously bullish LNW
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