Fitch upgrades Light & Wonder outlook after leverage improves; IDR affirmed at BB

Fitch Ratings revised its rating outlook for Light & Wonder Inc to positive from stable on 21 October 2026, citing an improving EBITDA leverage profile and voluntary debt reduction. Fitch expects leverage to decline to approximately 2.9 times by the end of 2027, driven by debt repayments and EBITDA growth across all business segments. The agency affirmed the long-term Issuer Default Rating at BB for both Light & Wonder and Light & Wonder International Inc.

Fitch's rationale

Fitch said the leverage improvement was one factor behind the outlook change and noted the company's "moderately diversified product mix, solid free-cash-flow margins, and disciplined capital allocation strategy." The agency calculated that Light & Wonder's EBITDA leverage had "improved modestly" to 3.5 times as at 30 June 2026, down from 3.6 times at the end of 2025.

"This trajectory advances Light & Wonder’s goal of maintaining a lower leverage profile," Fitch wrote.

Fitch added that near-term deleveraging will likely be driven by voluntary repayments on Light & Wonder's 2030 senior secured revolver facility and existing term loans. The rating note said share repurchases, which were significant in 2025 following Light & Wonder's Nasdaq delisting and its November 2025 transition to a sole primary listing on the Australian Securities Exchange, could moderate as stronger cash flow is directed toward debt reduction.

Forecasts and targets

The agency expects the group's total revenue to grow at a mid-single-digit compound annual growth rate over the medium to long term, supported by enhancements across traditional gaming, iGaming, and social casino segments. Fitch forecasts that, over the longer term, Light & Wonder's leverage could decline to about 2.5 times as the company advances towards its 2028 adjusted EBITDA target of US$2 billion.

Light & Wonder reported a 2.4% year-on-year increase in second-quarter revenue in August 2026, while net income rose 26.3%. At that time the company said it expected full-year 2026 consolidated adjusted EBITDA growth "to be in the mid- to high-single-digit percentage range," reflecting continued execution of its long-term strategy.

Executive appointment

In early August 2026, Light & Wonder named Mike Smith as managing director for Asia, with the appointment taking effect in October 2026. Fitch noted the company's installed base should continue growing as it expands its premium-game portfolio, broadens presence across gaming adjacencies and enters additional product markets.