Light & Wonder (L&W), a leading name in the gaming industry, has recently confirmed that its Board of Directors has authorized a new share repurchase program. This announcement, made on Thursday, signifies a robust strategic move by the company to repurchase up to $1 billion in outstanding common stock under the terms of a new three-year program set to expire on June 12, 2027. This initiative follows the completion of a previous $750 million repurchase program, highlighting L&W’s commitment to enhancing shareholder value.
New $1 Billion Share Repurchase Program by Light & Wonder
Completion of Previous Repurchase Program
The new buyback program comes on the heels of a prior repurchase initiative that was scheduled to conclude on February 26, 2025. However, as of June 13, 2024, L&W confirmed the full exhaustion of this $750 million share repurchase program. Through this initiative, the company successfully acquired 11.2 million common shares at an average purchase price of $66.72 per share. This purchase price represents a significant 28% discount on the closing price of L&W shares, which stood at $92.35 as of June 13.
Strategic Importance of the New Repurchase Program
L&W’s statement regarding the new program emphasized that the timing and amount of repurchases will be determined by the company based on various factors. These include market conditions, share price, and potential opportunities for inorganic growth. This strategic approach underscores L&W’s prudent financial management and its focus on optimizing capital allocation.
Financial Insights from Oliver Chow
Oliver Chow, the Chief Financial Officer of L&W, elaborated on the positive momentum the company has gained. He highlighted that this momentum, combined with L&W’s net debt leverage ratio, creates significant opportunities for capital allocation. Chow noted, “Our prior program was an effective value creation tool and moving forward the new program will allow us to deliver further value to our shareholders while underscoring our commitment to driving profitable growth and upside beyond 2025.”
Vision and Commitment from Leadership
Statement from Matt Wilson
L&W’s CEO, Matt Wilson, expressed his excitement regarding the new share repurchase program. He stated, “I am pleased to announce that the Board has approved a new, upsized share repurchase program as we continue to successfully execute our growth strategy and return meaningful capital to our shareholders.” Wilson’s confidence in the program reflects the company’s strategic foresight and commitment to long-term growth.
Future Projections
Wilson further emphasized that L&W will continue to invest in its future. He predicted that based on current operating performance, the company is on track to achieve $1.4 billion in consolidated AEBITDA for 2025. This projection aligns with the company’s broader vision of sustained growth and profitability.
Implications for Shareholders
The new share repurchase program represents a significant opportunity for L&W to enhance shareholder value. By repurchasing shares, the company can effectively return capital to shareholders, thereby increasing the value of remaining shares. This strategy not only boosts shareholder confidence but also underscores L&W’s commitment to maintaining a strong financial position.
Conclusion: The Repurchase Program
Light & Wonder’s new $1 billion share repurchase program is a testament to the company’s strategic vision and commitment to shareholder value. Following the successful completion of a previous $750 million program, this new initiative highlights L&W’s proactive approach to capital management. With strong leadership, a clear strategic direction, and robust financial projections, L&W is well-positioned for continued growth and success in the coming years.
FAQs About the Light & Wonder’s New $1 Billion Share Repurchase Program
1. What is the new share repurchase program announced by Light & Wonder (L&W)?
L&W has announced a new share repurchase program authorized by its Board of Directors, allowing the company to repurchase up to $1 billion in outstanding common stock. This program will run for three years and is set to expire on June 12, 2027.
2. How does this new program compare to L&W’s previous share repurchase program?
The new program follows a previous repurchase initiative that allowed L&W to buy back up to $750 million in common shares. The prior program, which was exhausted as of June 13, 2024, involved the repurchase of 11.2 million shares at an average price of $66.72 per share, a 28% discount on the closing price of $92.35 on that date.
3. What are the factors influencing the timing and amount of share repurchases under the new program?
The timing and amount of share repurchases will be determined by L&W based on market conditions, share price, and other factors, including potential opportunities for inorganic growth.
4. What did Oliver Chow, L&W’s CFO, say about the new share repurchase program?
Oliver Chow highlighted the positive momentum and financial position of L&W, stating that the new program provides significant opportunities for capital allocation. He emphasized that the program will deliver further value to shareholders and supports the company’s commitment to driving profitable growth beyond 2025.
5. What are Matt Wilson’s views on the new share repurchase program?
Matt Wilson, L&W’s CEO, expressed excitement about the new program, noting that it complements the company’s growth strategy and returns meaningful capital to shareholders. He also projected that L&W is on track to achieve $1.4 billion in consolidated AEBITDA by 2025, indicating strong future growth.
6. How does the share repurchase program benefit L&W’s shareholders?
The share repurchase program benefits shareholders by returning capital to them, which can increase the value of the remaining shares. This strategy boosts shareholder confidence and underscores L&W’s commitment to maintaining a strong financial position.
7. What are L&W’s future financial projections based on the new repurchase program?
L&W’s CEO, Matt Wilson, predicted that the company is on track to achieve $1.4 billion in consolidated AEBITDA by 2025, indicating a strong outlook for continued growth and profitability.
8. Why is the share repurchase program important for L&W’s growth strategy?
The share repurchase program is important for L&W’s growth strategy as it allows the company to manage capital efficiently, enhance shareholder value, and demonstrate a commitment to long-term profitability and financial health.
9. How does L&W’s financial performance influence its ability to initiate share repurchase programs?
L&W’s strong financial performance, positive momentum, and net debt leverage ratio provide the company with the flexibility to allocate capital effectively and undertake significant share repurchase programs, underscoring its robust financial health and strategic foresight.
10. What should investors and stakeholders expect from L&W moving forward?
Investors and stakeholders can expect L&W to continue executing its growth strategy, delivering value through the new share repurchase program, and investing in future opportunities. The company’s strong financial projections indicate a promising outlook for sustained growth and shareholder returns.
