Light & Wonder posted Q1 2026 consolidated revenue of $790m, up 2% year-on-year, as iGaming and gaming operations each delivered double-digit growth and net income dropped 37% to $52m on roughly $50m in legal reserve charges.
Revenue Holds, Earnings Weighed by Legal Costs
Adjusted EBITDA rose 5% to $327m. Recurring revenue reached $574m, up 13% year-on-year, and now accounts for a growing share of the overall earnings mix. Net income fell from $82m to $52m, reflecting a $50m legal provision rather than operating deterioration. Adjusted EPS came in at $1.45, up 7%.
Adjusted free cash flow rose 86% to $207m. Operating cash flow was $139m, down from $185m in the prior-year period, after $137m in litigation payments cleared during the quarter. Net debt stood at approximately $5.0bn, with leverage at 3.5x adjusted EBITDA.
Gaming: Installed Base Drives Earnings Over Hardware Sales
Gaming revenue rose 3% to $512m. The segment’s composition is shifting: gaming operations revenue climbed 38% to $239m and table products revenue grew 24% to $63m, while machine sales fell 25% to $156m due to the timing of international and North American VLT shipments in the prior-year period. Average selling price per unit held at approximately $19,700.
The North American premium installed base grew for a 23rd consecutive quarter, adding 650 units in the period and more than 2,550 units year-on-year. More than 5,000 North American units were shipped during Q1. Grover charitable gaming contributed $43m in revenue and expanded by 660 units sequentially, with its entry into Indiana adding early momentum.
Systems revenue declined 14%, reflecting softer hardware demand. The broader trend is toward recurring participation-based revenue rather than equipment sales — a shift that provides greater earnings visibility and supports margin stability over time.
iGaming: 18% Growth and Expanding Margins
iGaming revenue grew 18% to $91m. Adjusted EBITDA for the segment rose 22%, with margins reaching 36%. Total wagers processed in the quarter reached $29.9bn.
Growth was driven by first-party content performance, wider operator integrations, and continued US market expansion. At a 36% AEBITDA margin, iGaming is approaching the profitability profile of land-based gaming operations and is becoming a more significant earnings contributor to the overall group. For context on how B2B suppliers are navigating European regulatory pressure, <a href=”https://theigaming.eu/2026/02/17/evolution-fy2025-revenue-flat-ebitda-down-9-as-european-regulatory-pressure-mounts/”>Evolution reported flat FY2025 revenue and a 9% EBITDA decline under similar headwinds.
SciPlay: Margin Expansion Despite Revenue Decline
SciPlay revenue fell 7% to $187m, reflecting softer payer volumes at JACKPOT PARTY Casino. Average revenue per paying user increased 8%, and direct-to-consumer revenue grew to 27% of total segment revenue. AEBITDA margin expanded to 35% despite the revenue decline.
The segment’s profitability held in the quarter, but the path to future growth relies increasingly on monetisation rather than user scale.
CEO: Start of a New Phase
“The first quarter of 2026 marks the beginning of the next phase of the company’s growth trajectory: one defined by our content-centric operating model, deepening customer relationships, disciplined execution, expanding margins and enhanced capital structure,” said CEO and president Matt Wilson.
“We are seeing the benefits of our continued investment in studios and content, as our franchises drive strong game performance across the portfolio.”
Chief financial officer Oliver Chow described the company’s ongoing spend on AI and infrastructure as “deliberate investments” expected to “compound meaningfully over time to support both growth and efficiency.”
Outlook, Headwinds, and Long-Term Targets
Light & Wonder expects mid- to high-single-digit adjusted EBITDA growth for FY2026, with performance weighted toward the second half of the year. The company absorbed approximately $70m in combined headwinds: $40m from external pressures including US tariffs and <a href=”https://theigaming.eu/2025/11/26/uk-confirms-major-gambling-tax-increases-online-casino-rate-to-hit-40-sports-betting-rises-to-25/”>UK gambling duty increases, $20m from strategic investments, and $10m from legacy legal costs.
Management targets leverage below 3.0x by H1 2027. Since 2022, the company has retired approximately 25% of its shares outstanding through buybacks. Long-term targets remain at $2.0bn in consolidated AEBITDA and EPS exceeding $10.55 by FY2028, roughly double the 2024 level. The stock fell 7.18% on the day results were reported, closing at $103.96.
Source: Light & Wonder
