Light & Wonder (NASDAQ: LNW) reported its third-quarter 2026 financial results late Wednesday, signaling a strategic pivot toward aggressive debt reduction. The company achieved a $156 million reduction in debt while maintaining a focus on recurring revenue, which now accounts for 71% of total consolidated revenue, according to Benzinga. The call began with an introduction from Rohan Gallagher, Executive Vice President and Global Chief Corporate Affairs Officer, who welcomed participants before handing the proceedings to CEO Matt Wilson and CFO Oliver Chow.
Strategic Financial Priorities for 2027
- Leverage Targets: Management is targeting a net debt leverage ratio below three times cash flow by the first half of 2027.
- Capital Allocation: No share repurchases were executed during the third quarter as the company prioritized balance sheet deleveraging.
- Operational Shifts: The company is reallocating capital away from the underperforming SciPlay subsidiary toward higher-return business segments.
Executives Pause Share Buybacks to Accelerate Debt Repayment
During the earnings call, CEO Matt Wilson and CFO Oliver Chow outlined a path toward financial consolidation. The company reported a net income of $133 million, a 17% increase year-over-year, and consolidated EBITDA of $383 million, a 2% increase. Oliver Chow confirmed that while share buybacks remain a long-term feature of the company’s capital strategy, they were paused in the third quarter to accelerate debt repayment. Chow promised that the firm would never compromise the foundational R&D structure of the business
in its pursuit of short-term goals.
Fitch Ratings recently upgraded the company’s outlook to “Positive,” a move management highlighted as validation of their current trajectory. The company aims to reach a debt-to-cash-flow ratio of three times by June 2027.
Performance Metrics Across Business Segments
The company’s revenue composition continues to shift toward recurring streams. Recurring revenue now represents 71% of total consolidated revenue, as noted by Benzinga. Systems sales experienced a 24% decline, while table game sales were down 7%. Wilson characterized the systems business as being in a “rebuild phase.” Wilson also noted solid performance in the Class II segment and reported that customers responded positively
to the company’s offerings at the Global Gaming Expo and the Australasian Gaming Expo.
| Metric | Q3 2026 Performance |
|---|---|
| Net Income | $133 Million (Up 17% YoY) |
| Consolidated EBITDA | $383 Million (Up 2% YoY) |
| Recurring Revenue Mix | 71% of Total Revenue |
| Debt Reduction | AU$153 Million ($107.7 Million) |
Challenges in the SciPlay Subsidiary
The social casino segment, operated under the SciPlay subsidiary, faced significant headwinds during the quarter. Revenues for the unit fell 12%, and user count decreased by 17%, though average spend per user increased by 5%. Wilson attributed this softness to competition from sweepstakes casinos. To address these results, the company has appointed a new COO, Matt LaBatt, who is currently reviewing the unit’s strategy in Tel Aviv. The company plans to move capital away from SciPlay into segments with higher projected returns. Regarding the leadership change, Chow remarked, We’ve lost some of innovation over the last few years. It’s going to be a bit of journey for us.
Executives Target Florida Online Market Entry by Late 2026
Wilson identified Chicago’s slot route rollout as a “sizable opportunity,” using the company’s 15-year performance history in Illinois. While the company has disabled all Brazil-facing content following that country’s new iGaming ban, executives remain confident in the strength of their North American and European portfolios. The company expects to enter the Florida online market by the end of 2026.
The transition in leadership and the ongoing optimization of the product floor—where operators have increased premium game space from 9% to 15%—are intended to maintain momentum. Wilson emphasized that the company is not forecasting based on variables outside its control, such as legislative delays in Pennsylvania, but is instead focusing on product agility and the continued expansion of its high-performing gaming content. Wilson also mentioned that the company’s Grover Gaming subsidiary is targeting charitable gaming in Maryland, with a planned debut in late 2027.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
