Fitch revises Light & Wonder outlook to positive on lower leverage

Fitch Ratings revised the credit outlook for Light & Wonder Inc to ‘positive’ from ‘stable’, saying the company’s EBITDA leverage is strengthening and “is expected to decline to approximately 2.9 times by end‑2027.” The agency attributed the change to voluntary debt repayments and EBITDA growth across all segments, in a note published on Monday.

Rating confirmation and rationale

Fitch affirmed the long‑term Issuer Default Rating (IDR) of Light & Wonder and Light & Wonder International Inc at 'BB', below investment grade. The firm cited the “moderately diversified product mix, solid free cash flow margins and a disciplined capital allocation strategy” as bases for the affirmation.

“This path advances Light & Wonder’s objective of maintaining a lower leverage profile,” Fitch said in its note.

Fitch stated the company’s traditional gaming segment contributes roughly 65% of revenues, based on the latest available data, and that the company operates in traditional gaming, iGaming and social casino.

Leverage, deleverage and cash‑flow data

According to Fitch’s calculations, EBITDA leverage improved modestly to 3.5 times at 30 June this year, versus 3.6 times at year‑end 2025. The agency expects near‑term deleveraging to be driven by voluntary repayments on the senior secured revolver maturing in 2030 and outstanding term loans.

Fitch added that share buybacks, which were significant in 2025 in the context of Light & Wonder’s delisting from Nasdaq and its November transition to a single primary listing on the Australian Securities Exchange, could moderate as cash flow is directed to debt reduction.

The agency projects that, over the longer term, leverage could fall to around 2.5 times as the company progresses toward its adjusted EBITDA target of US$2.0 billion for 2028. Fitch also expects total revenues at Light & Wonder to grow at a mid‑single‑digit compound annual rate over the medium to long term, supported by improvements across all segments.

In August, Light & Wonder reported year‑over‑year revenue growth of 2.4% in the second quarter and a 26.3% increase in net income. The company said in that report it expects consolidated adjusted EBITDA for 2026 to grow in the mid‑to‑high single‑digit range. In August it also appointed Mike Smith as managing director for Asia, effective in October.