Light & Wonder Lifts Q3 Profit 17% but Steers 2026 Growth to the Low End

Light & Wonder earned more on less revenue in the third quarter, but social casino weakness and slower customer spending have pushed its full-year earnings growth to the bottom of its range. On the same day it hired SciPlay's new chief executive from Aristocrat's Product Madness.

• Light & Wonder reported third-quarter net income of $133 million on 4 November, up 17% on a year earlier, while revenue fell 2% to $824 million
• It now expects 2026 Consolidated AEBITDA growth toward the lower end of its mid-to-high single-digit range, citing social casino weakness and delayed customer spending
• SciPlay revenue fell 12%, and Matthieu Labbat of Aristocrat's Product Madness was named its chief executive after Josh Wilson's departure
• iGaming revenue rose 13% to $97 million, although all Brazilian content has been disabled under the country's betting ban
• No shares were bought back as net debt leverage fell to 3.3 times, and the 2028 target of $2.0 billion in Consolidated AEBITDA stands

Earnings Grew on a Smaller Top Line

Light & Wonder's third-quarter release, published on 4 November, shows revenue of $824 million against $841 million a year earlier. Net income rose to $133 million from $114 million, and diluted earnings per share rose 28% to $1.72, helped by earlier buybacks. The company credits a more favourable revenue mix and operational efficiencies. Consolidated AEBITDA rose 2% to $383 million and operating cash flow 28% to $236 million.

The company now expects full-year Consolidated AEBITDA growth toward the lower end of its mid-to-high single-digit range, citing weakness in social casino and some delayed investment by casino customers, partly offset by recurring revenue and an expected seasonally strong fourth quarter. The presentation restates the 2028 targets of $2.0 billion in Consolidated AEBITDA and EPSa above $10.55.

Gaming Held, SciPlay Fell Again and iGaming Grew

Gaming revenue slipped 1% to $554 million. Gaming operations rose 3% and machine sales 5%, but systems fell 24% on lower hardware sales. The North American premium installed base grew for a 25th consecutive quarter.

SciPlay revenue fell 12% to $173 million and is down 10% for the nine months. Daily active users fell 10% to 1.8 million, while revenue per paying user rose 5% and direct-to-consumer sales reached 31% of the total. The presentation expects SciPlay to trail a category for which the Eilers Social Casino Gaming Tracker forecasts a 6% to 7% decline. On 4 November the company named Matthieu Labbat, previously senior vice president and head of Aristocrat's Product Madness, as SciPlay's chief executive with immediate effect.

iGaming revenue rose 13% to $97 million and segment AEBITDA 9% to $37 million. The presentation says Light & Wonder titles held eight of the top 10 places on its OpenGaming platform, Pirots 5 was the No. 1 game, and trailing 12-month new-game GGR excluding Huff N' Puff rose 46%. It also says all Brazilian content has been disabled and April's UK duty increase remains a headwind.

Deleveraging Comes Before Buybacks

Principal debt outstanding fell by $153 million to $5.0 billion, and net debt leverage to 3.3 times from 3.4. The company targets close to 3.0 times by the end of 2026 and below it in the first half of 2027. No shares were repurchased under the programme in the quarter, although $30 million went on CDIs bought for an employee equity plan trust. Chief Financial Officer Oliver Chow said that "as signaled last quarter, we prioritized deleveraging over share repurchases", as set out in August.

The release does not mention Aristocrat. Under a joint statement of 12 January, Light & Wonder agreed to pay $127.5 million over Dragon Train and Jewel of the Dragon. The 10-Q's remaining Dragon Train matter is a shareholder class action over disclosures, brought by AztecGold Holdings in the Supreme Court of Victoria; Light & Wonder filed its defence on 18 September and says the claims are without merit.

The 2028 Target Now Needs a Step Change

Trailing 12-month Consolidated AEBITDA was $1.50 billion at 30 September. Reaching $2.0 billion in 2028 requires about a third more, or roughly 15% a year through 2027 and 2028, against 5% growth in the first nine months of 2026. Restating it while trimming this year's guidance means management is counting on new cabinets and content, not the current run rate.

The SciPlay Hire Says More Than the Quarter

SciPlay's decline has deepened through 2026, from 7% in the first quarter to 12% in the third, and Light & Wonder has answered by hiring from a direct rival: Product Madness is the social casino arm of Aristocrat. Labbat's record, as the company describes it, is in direct-to-consumer growth and margins, where SciPlay is already improving. Restoring player numbers is the harder task.

iGaming Is Small but Carries the Growth

At 12% of group revenue, iGaming cannot offset SciPlay alone, but it is the only segment growing at double digits. The 46% rise in new-game revenue outside Huff N' Puff suggests the growth does not hang on one franchise, which matters while UK duty and the Brazilian ban remove revenue. Light & Wonder has not quantified what Brazil contributed.

The quarter shows a company converting cash well while its growth drivers narrow. The 2028 target rests on an acceleration the 2026 numbers have yet to show.