Light & Wonder posts strong Q4 revenue growth despite hefty legal costs
Light & Wonder closed out Q4 2025 with higher revenue and stronger cash generation, even as a series of legal and one-time costs cut into its bottom line.
The Las Vegas gaming supplier said Tuesday (February 24) that full-year revenue reached $3.3 billion, a roughly 4% increase from a year earlier. Profit told a different story. Net income for the year fell 18% to $276 million, and the company recorded a $15 million loss in the fourth quarter.
Executives pointed to several large charges behind the quarterly loss, including about $128 million tied to a legal settlement with rival Aristocrat over the Dragon Train slot franchise. The agreement resolved a high-profile lawsuit in which Aristocrat accused Light & Wonder of copying trade secrets related to its Dragon Link games. Light & Wonder also booked $25 million in acquisition-related adjustments and $18 million in expenses connected to shifting its primary listing to the Australian Securities Exchange.
Legal battles reshape the outlook as Light & Wonder posts Q4 results
The Aristocrat settlement, reported at $127.5 million, marked the end of a contentious dispute that had cast uncertainty over one of Light & Wonder’s newer game lines. At the same time, the company continues to face scrutiny from other industry heavyweights. Evolution has pursued trade secrets claims in arbitration and separately filed litigation tied to a roulette title, arguing that certain game features infringed on its intellectual property.
Stripping out one-time items, underlying performance appeared stronger. Consolidated AEBITDA rose 16% for the full year to $1.44 billion, while adjusted NPATA climbed 18% to $567 million. In the fourth quarter alone, AEBITDA jumped 29% to $405 million, and adjusted NPATA increased 27%. Earnings per share were up 38% from the same period a year ago.
Gaming hardware reportedly helped drive that momentum. Revenue in the segment rose 17% as the company shipped a record 7,000 machines across North America. Its installed base in the region grew by more than 700 units sequentially, including 345 units from the recently acquired Grover charitable gaming business.
Digital operations also expanded as iGaming posted quarterly records for both revenue and AEBITDA, fueled by demand for in-house content and a broader partner network. SciPlay continued to build out its direct-to-consumer business.
Cash generation strengthened as well. Operating cash flow increased 26% to $794 million, and free cash flow climbed 42% to $452 million. The company returned $877 million to shareholders through buybacks, with $500 million of that coming in the fourth quarter.
Chief Executive Matt Wilson said the company delivered “double-digit year-over-year growth in both revenue and cash flows” while completing key strategic moves, including the Grover acquisition and the ASX transition. Finance chief Oliver Chow said the company expects to keep reducing leverage in 2026 as it leans into recurring revenue and new game development.
Featured image: Light & Wonder
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