Light & Wonder Q2 Earnings Beat Estimates Despite Lower Revenues

Light & Wonder, Inc. LNW reported modest second-quarter 2025 results, wherein adjusted earnings beat the Zacks Consensus Estimate while revenues missed the same.

The Las Vegas-based cross-platform games and entertainment company reported a year-over-year revenue decline, owing to weakness in some verticals and macroeconomic headwinds. However, management’s strong emphasis on implementing automation, standardization, AI tools and process development to drive organizational efficiency and scalability is a tailwind.

LNW’s Bottom Line

Net income for the reported quarter was $95 million or $1.11 per share compared with $82 million or 90 cents in the prior-year quarter. This uptick was driven by lower cost of revenues and operating expenses.Adjusted earnings were $1.58 per share, which comprehensively beat the Zacks Consensus Estimate by 14 cents.

LNW’s Revenues

Total revenues for second-quarter 2025 fall to $809 million from $818 million in the prior-year quarter, owing to weakness in multiple business segments. Services revenues increased to $566 million from $526 million and Products revenues declined to $243 million from $292 million. The top line missed the Zacks Consensus Estimate of $860 million.

Gaming revenues were $528 million, down 2% year over year, due to a decline in gaming machine sales of 16% and a systems revenue decline of 11% year over year. Growth in gaming operations revenues partially cushioned the net sales in this segment.

SciPlay generated $200 million in revenues, down 2% year over year, yet continued to outperform the broader social casino market, supported by strong player engagement.

iGaming revenues increased 9% year over year to $81 million. Healthy traction in North America, record content launch and continued global market growth fueled net sales in this segment.

Other Details of LNW

Non-GAAP consolidated AEBITDA improved to $352 million from $330 million in the year-ago quarter. This improvement was primarily driven by contributions from the acquisition of Grover and sustained margin strength across multiple verticals. AEBITDA margin improved to 44% compared with the prior-year quarter’s 40%.

Cash Flow & Liquidity of LNW

The company generated a cash flow of $106 million from operating activities in the second quarter compared with $141 million in the prior-year quarter. As of June 30, 2025, it had $136 million in cash and cash equivalents with $4.81 billion of long-term debt.

Guidance

For 2025, the company expects adjusted EBITDA in the range of $1.43-1.47 billion, while adjusted NPATA is projected in the range of $550-575 million.

LNW’s Zacks Rank & Other Stocks to Consider

Light & Wonder currently has a Zacks Rank #2 (Buy).

Ubiquiti Inc. UI sports a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last reported quarter, it delivered an earnings surprise of 61.29%. Ubiquiti spends significantly on research and development activities for developing innovative products and state-of-the-art technology to expand its addressable market and remain at the cutting edge of networking technology. The company believes its new product pipeline will help to increase average selling prices for high-performance, best-value products, thus raising the top line. Ubiquiti is witnessing healthy traction in the Enterprise Technology segment.

Jabil, Inc. JBL currently sports a Zacks Rank #1. In the last reported quarter, it delivered an earnings surprise of 9.44%.

Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target of “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. This initiative should position Jabil well on the growth trajectory.

Motorola Solutions, Inc. MSI currently carries a Zacks Rank 2. The company delivered an earnings surprise of 8.19% in the trailing four quarters.

Motorola expects to record strong demand across video security and services, land mobile radio products and related software while benefiting from a solid foundation. MSI intends to boost its position in the public safety domain by entering into strategic alliances with other players in the ecosystem.

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This article originally published on Zacks Investment Research (zacks.com).

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