LAWIL 10-K & 10-Q changes, risk factors and insider trading

•Unfavorable U.S. and international economic conditions, decreased discretionary spending, travel or operational disruptions due to other factors such as inflation, rising benchmark interest rates, potentialnew or increased trade tariffs, terrorist activity or threat thereof, armed conflicts or hostilities, civil unrest, health epidemics, contagious disease outbreaks, or public perception thereof, other economic or political uncertainties, or other events beyond our control have adversely affected and may in the future adversely affect our business, results of operations, cash flows and financial condition.

•The Company ishas consideringdelisted a dual primary listing on bothfrom the NASDAQNasdaq and thetransitioned ASXto ora sole primary listing on the ASX, meaning we may choose to delist our securities from NASDAQ, which could negatively affect the liquidity and trading prices of our common stock, and could result in a decline in stock pricesor andCDIs, couldimpacts limitour investors’ ability to trade in our securities and our access to the capital markets and could lead to price variations and other impacts on holders of our common stock, CDIs and other securities.

•Legislative interpretation and enforcement of certain gaming activities could adversely affect our financial performance and reputation.

We continue to execute on our strategy to become the leading, cross-platform global games company (more fully described in in Part I, Item 1 above). Successful execution on our strategy may present unexpected challenges and uncertainties. We may incur integration and optimization expenses to execute and facilitate our strategies.

Our business strategy is to invest in great content and franchises across land-based and digital platforms, expand in high-growth markets, enable a seamless player experience with innovative platforms, deleverage and maximize cash flow to fuel investment and be driven by high-performing talent and culture. Our strategy is focused upon growth including growing our recurring revenue and digital revenue mix and pursuit of acquisitions supportive of our strategic goals. For additional information on risks related to our acquisition strategy, see the risk factor captioned “Our inability to complete acquisitions and integrate those businesses successfully could limit our growth or disrupt our plans and operations.” If we are not successful in accomplishing each component of our new business strategy, we may suffer negative impacts on our results of operations, cash flows and financial condition.

Additionally, the success of our new brand and name will beis integral in allowing our new strategy and business focus to be successful. Developing and maintaining awareness of our Company and our brand is important to attracting new and existing customers to our products. The importance of brand recognition will increaseincreases as competition in our industry intensifies. Successful promotion of our brand will dependdepends on the effectiveness of our marketing efforts. Although we plan to invest substantial resources to promote our brand, there is no guarantee that we will be able to achieve or maintain brand name recognition or status under the newour brand that is comparable to the recognition and status previouslywe enjoyedhave underhistorically our former brand.enjoyed. Even if our brand recognition and loyalty increases, this may not result in increased revenue and profitability. For these reasons, our rebranding initiativeefforts may not produce the benefits expected, could adversely affect our ability to retain and attract customers, and may have a material adverse effect on our results of operations, cash flows and financial condition.

Our operations in foreign jurisdictions subject us to additional risks customarily associated with such operations, including: the complexity of foreign laws, regulations and markets; the uncertainty of enforcement of remedies in foreign jurisdictions; the impact of foreign labor laws and disputes; the ability to attract and retain key personnel in foreign jurisdictions; the economic, tax and regulatory policies of local governments; compliance with applicable anti-money laundering, anti-bribery and anti‑corruption laws, including the Foreign Corrupt Practices Act, U.K. Bribery Act and other anti‑corruption laws that generally prohibit us and our agents from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business; compliance with applicable sanctions regimes regarding dealings with certain persons or countries; import and export restrictions and other trade barriers, including imposition of new or increased tariffs; and increased trade tensions between countries or political and economic unions. Certain of these laws also contain provisions that require accurate record keeping and further require companies to devise and maintain an adequate system of internal accounting controls.

Although we have policies and controls in place that are designed to ensure compliance with these laws, if those controls are ineffective or an employee or intermediary fails to comply with the applicable regulations, we may be subject to criminal and civil sanctions and other penalties. Any such violation could disrupt our business and adversely affect our reputation, results of operations, cash flows and financial condition. In addition, our international business operations could be interrupted and negatively affected by terrorist activity, political unrest or other economic or political uncertainties. Moreover, U.S. and foreign jurisdictions could impose new or increased tariffs, quotas, trade barriers and other similar restrictions on our international sales.

For example, in 2018 the U.S. announced certain trade actions under Section 232 of the Trade Expansion Act of 1962, and Section 301 of the Trade Act of 1974, including tariff increases on several imported products. These U.S. tariffs, along with other U.S. trade actions, have triggered retaliatory actions by certain affected countries, such as the People’s Republic of China (“PRC”). The President has begun to imposeimposed significant tariffs on goods imported from China and other countries. Given the uncertainty regarding the scope and duration of these trade actions by the U.S. and other countries, and trade negotiations between the U.S. and the PRC, we cannot predict whether, or to what extent, tariffs and other trade restrictions may be imposed on or otherwise become applicable to our product offerings or supply chain, and the impact of these trade actions on our business remains uncertain. WhileAlthough tariffs and other trade actions by the U.S. and other countries have not yet had a significant impact on our business and we are implementing measures to limit the impact of tariffs on our cost structure, there is continued uncertainty regarding the level, scope and duration of these trade actions by the U.S. and other countries, and trade negotiations between the U.S. and the PRC remain volatile. Accordingly, we cannot predict furtherwhether, developments.or to what extent, new or increased tariffs and other trade restrictions may be imposed on or otherwise become applicable to our product offerings or supply chain, and the impact of these trade actions on our business remains uncertain. Tariffs and other trade actions could result in increases in our cost of doing business and in the sale prices of certain of our products and could negatively impact demand for our products, which could materially adversely affect our results of operations, cash flows and financial conditions.

Unfavorable U.S. and international economic conditions, decreased discretionary spending, travel or operational disruptions due to other factors such as inflation, rising benchmark interest rates, potentialnew or increased trade tariffs, terrorist activity or threat thereof, armed conflicts or hostilities, civil unrest, health epidemics, contagious disease outbreaks, or public perception thereof, other economic or political uncertainties, or other events beyond our control have adversely affected and may in the future adversely affect our business, results of operations, cash flows and financial condition.

Unfavorable economic conditions, including recession, inflation, rising benchmark interest rates, economic slowdown, decreased liquidity in the financial markets, decreased availability of credit, relatively high rates of unemployment and inflation, have had, and may continue to have, a negative effect on our business. Socio-politicalSociopolitical factors such as terrorist activity or threat thereof, armed conflicts or hostilities, civil unrest or other economic or political uncertainties, or health epidemics, contagious disease outbreaks, or public perception thereof, or other events beyond our control that contribute to consumer unease have resulted, and may continue to result, in decreased discretionary spending or travel by consumers and have had, any may continue to have, a negative effect on our businesses. Such factors out of our control may also have effects beyond discretionary spending or travel, such as disruptions to our operations and productivity, which could also have a negative effect on our businesses. Prolonged or more severe economic weakness, particularly from inflation, rising interest rates, new or increased tariffs and foreign currency volatility, could materially adversely impact our business, including causing our expected expenses to increase materially. We cannot fully predict the effects that unfavorable social, political and economic conditions, economic uncertainties and public health crises and any resulting decrease in discretionary spending or travel would have on us, as they would be expected to impact our customers, suppliers, employees, consultants and business partners in varied ways.

In our Gaming business, especially our Participation gaming business, our revenue is largely driven by players’ disposable incomes and level of gaming activity which may be reduced by unfavorable economic conditions. A further or extended decline in disposable income may result in reduced play levels on our Participation gaming machines, causing our results of operations and cash flows from these products to decline. Additionally, higher travel and other costs may adversely affect the number of players visiting our customers’ casinos. Adverse changes in discretionary consumer spending or consumer preferences, resulting in fewer patrons visiting casinos and reduced play levels, could also be driven by factors such as an unstable job market, recession, new or increased tariffs, outbreaks of contagious diseases or public perception thereof or fears of terrorism or other violence. A decline in play levels has negatively impacted the results of operations, cash flows and financial condition of our casino customers and their ability to purchase or lease our products and services.

Unfavorable economic conditions have also impacted, and could continue to impact, the ability of our Gaming customers to make timely payments to us. These conditions, and the concentration of certain outstanding Gaming segment receivables, may increase our collection risks and materially impact our estimate of receivables allowance for credit losses. A substantial portion of our U.K. gaming business benefits from a contract with the large U.K. bookmaker Entain PLC, which represents a significant portion of our U.K. LBO server-based gaming business. In addition, unfavorable economic conditions have caused, and may cause in the future, some of our Gaming customers to temporarily close gaming venues or ultimately declare bankruptcy, which adversely affects our business. Consistent with other suppliers in the gaming industry,Further, our Gaming businesscustomers offerscould extendedelect paymentto termmodify financingtheir forreplacement gamingcycles machineor purchases,otherwise delay purchases and wecapital expectexpenditures tothey continuewould tohave provideotherwise extended payment term financing in this business until demand from our customers for such financings abates or our business model changes. These financing arrangements may increase our collection risk, and if customers are not able to pay us, whether as a result of financial difficulties, bankruptcy or otherwise, we may incur provisions for bad debt related to our inability to collect certain receivables. In addition, both extended payment term financing and operating leases result in a delay in our receipt of cash, which reduces our cash balance, liquidity and financial flexibility to respond to changing economic events.made. Unfavorable economic conditions may also result in volatility in the credit and equity markets. The difficulty or inability of our customers to generate or obtain adequate levels of capital to finance their ongoing operations may reduce their ability to purchase our products and services. Refer to Note 6 for international locations with significant concentrations of our receivables with terms longer than one year.

In our iGaming business based on a Participation model, our revenue is largely driven by disposable incomes and level of player activity. Unfavorable economic conditions have previously reduced and may laterin the future reduce the disposable incomes of end users consuming the services, which could negatively impact revenues for the iGaming business. Suppliers to our iGaming business may suffer financial difficulties and may not be able to offer their services and products, which could restrict the provision of our services and negatively impact our revenues. Various gambling regulators have implemented additional responsible and safer gambling measures relating to online casinos, including the implementation of bet limits, spin speeds, deposit limits and bonusing, which could negatively impact our revenues, particularly if additional gambling regulators follow suit or additional measures are introduced.

In our SciPlay business, while we maintain offices in the U.S., we have employees and consultants operating in foreign jurisdictions, including Israel, Turkey and Ukraine.Israel. In the foreign jurisdictions in which SciPlay operates, conditions such as political instability, inflation, slower growth or recession, new or increased tariffs, terrorist activity or threat thereof, armed conflicts or hostilities and civil unrest could adversely affect our business and results of operations. For example, political, economic and military conditions in Israel, including acts of terrorism, war or other armed conflicts, which have impacted our employees and operations in Israel, could in the future cause business interruptions or other spillover effects that could materially adversely affect SciPlay’s business and results of operations.

There are ongoing concerns regarding the debt burden of certain countries, particularly in Europe and South America, and their ability to meet their future financial obligations, which have resulted in downgrades of the debt ratings for these countries. We currently operate in, and our growth strategy may involve pursuing expansion or business opportunities in certain of these jurisdictions, such as Argentina, Brazil, Greece, Italy, and Puerto Rico, Turkey and Ukraine among others. These sovereign debt concerns, whether real or perceived, could result in a recession, prolonged economic slowdown, or otherwise negatively impact the general health and stability of the economies in these countries or more broadly. In more severe cases, this could result in a limitation on the availability or flow of capital, thereby restricting our liquidity and negatively impacting our results of operations, cash flows and financial condition.

Additionally, we are subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC, the Nasdaq Stock Market,ASX, the Australian Securities and Investment Commission (“ASIC”) and the FASB. These rules and regulations continue to evolve in scope and complexity, making compliance difficult and uncertain. Additionally, we or our suppliers may become subject to new laws enacted with regards to climate changechange, greenhouse gas emissions and other environmental issues. If new laws are enacted, or current laws are modified in countries in which we or our suppliers operate, we could face increased costs to comply with these laws.

The outbreak of a novel strain of coronavirus, COVID-19, and public perception thereof, had contributed to consumer unease and led to decreased discretionary spending and consumer travel, which, in turn, had a negative effect on us, especially in our Gaming business. Other future health epidemics or contagious disease outbreaks could do the same. We cannot predict the ultimate effects that the outbreak of COVID-19,COVID-19 or any similar contagious disease, any resulting unfavorable social, political and economic conditions and decrease in discretionary spending or travel would have on us, as they would be expected to impact our customers, suppliers and business partners in varied ways in different communities. In our Gaming business, especially our Participation gaming, SciPlay business segment and iGaming business segment, our revenue is largely driven by players’ disposable incomes and level of gaming activity. The outbreak of COVID-19 led to economic and financial uncertainty for many consumers and reduced, and may continue to reduce or maintain at low amounts, the disposable incomes of players across all of our business units. This resulted in fewer patrons visiting casinos, whether land-based or online, and lower amounts spent per casino visit.

Our Gaming business faces significant competition, not only from traditional gaming suppliers, but also from a number of other domestic and foreign providers, some of which have substantially greater financial resources and/or experience than we do. In some cases, we compete against gaming operators, including illegal or unregulated operators. Additionally, we face competition from smaller gaming companies that have established certain competitive products in recent years and are able to focus their resources on developing a smaller number of high-performing products. In addition to competition from traditional gaming suppliers, the Gaming business also faces competition from other suppliers of electronic pull-tab equipment in charitable gaming.

Successful execution of our strategy depends on our continuous ability to attract and retain players, adapt to the emergence of new mobile hardware or operating systems, expand the market for our games, maintain a technological edge and offer new capabilities to players. We also compete with social gaming companies, including those that offer social casino games such as Playtika, Playstudios, Product Madness/Big Fish Games (subsidiaries of Aristocrat), DoubleU Games Co., Ltd/Double Down Interactive, GSN Games/Bash Gaming (subsidiaries of Scopely, Inc.), AppLovin Corporation and Huuuge Games, some of which have no connection to regulated real money gaming, and many of those companies have a base of existing players that is larger than ours. In some cases, we compete against real money gaming operators who have expanded their games to include social casino games and have in the past leveraged their land-based gaming relationship with us to license social casino game content from us. In those cases, customers of such real money gaming operators may choose to play our content as it is offered by the operator and not as it is offered by our social casino games, detrimentally impacting our results. Additionally, the overall online casino industry (including our SciPlay and iGaming segments) increasingly competes with sweepstakes operators, which could adversely affect our results.

We may not be able to successfully integrate any businesses that we acquire or do so within the intended timeframes. We could face significant challenges in managing and integrating our acquisitions and our combined operations, including acquired assets, operations and personnel. Our recent acquisition of the remaining approximately 17% equity interest in SciPlay not already owned by us pursuant to the SciPlay Merger has required us to take certain actions to appropriately integrate into our operations in compliance with the terms of the merger agreement. In addition, the expected cost synergies or any other anticipated benefits associated with such acquisitions may not be fully realized in the anticipated amounts or within the contemplated timeframes or cost expectations, which could result in increased costs and have an adverse effect on our prospects, results of operations, cash flows and financial condition. We expect to incur incremental costs and capital expenditures related to our contemplated integration activities.

The acquisition of Grover Charitable Gaming subjects us to a number of risks and uncertainties, including lack of assurance regarding the timing of completion of the transaction, whether it will yield additional value for our stockholders and whether it will adversely impact our business, financial results, results of operations, cash flows or stock price.

On FebruaryMay 17,16, 2025, we enteredcompleted intothe aacquisition purchase agreement withof Grover Gaming, Inc. and G2 Gaming, Inc. (together, “Grover Gaming”) to acquire certain assets and assume certain liabilities constituting Grover Gaming’s charitable business for an upfront consideration of $850 million, subject to certain customary purchase price adjustments as set forth in the purchase agreement, and up to $200 million in cash in the aggregate in the form of contingent acquisition consideration payments over a four-year period based on achievement of certain revenue andmetrics businessover expansiona metrics.four-year period.

The proposed Grover Charitable Gaming acquisition exposes us to a number of risks and uncertainties, including the possibility that the conditionsCompany may be unable to achieve the completionexpected financial, operational and strategic benefits of the proposed Grover Charitable Gaming acquisition, including the receipt of regulatoryacquisition and gaming approvals, may not be satisfied;able thatto asuccessfully materialintegrate adverseGrover change, event or occurrence may affectinto the CompanyCompany’s and Grover Charitable Gaming prior to the closing of the proposed Grover Charitable Gaming acquisition and may delay the proposed transaction or cause the companies to abandon the proposed transaction; that significant expenses associated with the review, pursuit and consummation of the proposed Grover Charitable Gaming acquisition will be incurredoperations; that the proposed Grover Charitable Gaming acquisition may involve unexpected costs, liabilities or delays, including as a result of increased exposure to potential litigation; that the businesses of the Company and Grover Charitable Gaming may suffer as a result of uncertainty surrounding the proposed Grover Charitable Gaming acquisition; that management’s time will be diverted to the processes associated with evaluating and consummating the proposed Grover Charitable Gaming acquisition; that the Company will have difficulties in attracting, retaining or motivating key management personnel of Grover; Charitable Gaming;and that disruptions from the proposed Grover Charitable Gaming acquisition will harm relationships with customers, employees and suppliers; and that the Company may be unable to achieve the expected financial, operational and strategic benefits of the proposed Grover Charitable Gaming acquisition and may not be able to successfully integrate the Grover Charitable Gaming charitable business into the Company’s operations.suppliers. Any of these factors could disrupt our business and could have a material adverse effect on our business, financial condition, results of operations, cash flows or stock price. There can be no assurance that the proposedThe Grover Charitable Gaming acquisition will provide greater value to our stockholders than that reflected in our current stock price. The proposed Grover Charitable Gaming acquisition and its anticipated benefits are dependent upon a number of factors that are beyond our control, including among other factors, market conditions, industry trends, regulatory developments, litigation and the interest of third parties in this business.

Similarly, the manufacture and maintenance of our gaming machines and gaming systems are dependent upon a regular and continuous supply of raw materials and components, many of which are manufactured or produced outside of the U.S. Certain of the components we use are customized for our products. The assembly of certain of our products and other hardware is performed by third parties. Any interruption or cessation in the supply of these items or services or any material quality assurance lapse with respect thereto could materially adversely affect our ability to fulfill customer orders, results of operations, cash flows and financial condition. We may be unable to find adequate replacements for our suppliers within a reasonable time frame, on favorable commercial terms or at all. The impact of the foregoing may be magnified as we continue to seek to streamline our gaming supply chain by reducing the number of our suppliers. Further, manufacturing costs may unexpectedly increase and we may not be able to successfully recover any or all of such cost increases. Additionally, in 2021,prior periods, we experienced pressures on the supply chain related to parts sourcing, whichand contributedthese topressures approximatelyhave $5in millionthe ofpast resulted, and may in the future result, in inventory obsolescence charge.charges. Because of the use of certain shared parts in some of our gaming machines in both old and new cabinets, supply chain pressures on availability of these parts may require us to re-allocate shared parts, rendering further units obsolete if such conditions sustain for an extended period of time.

Our results of operations can fluctuate due to seasonal trends and other factors. Sales of our gaming machines to casinos are generally strongest in the second half of the year and slowest in the first half of the year, while revenue from our Participation gaming machines is generally highest in the spring and summer.summer, and for Grover revenue is generally highest in the spring. Player activity for SciPlay is generally slower in the second and third quarters of the year, particularly during the summer months. Player activity for our iGaming business, specifically digital casino operators, is generally slower in the third quarter during the summer months and is generally higher in the fourth quarter. Certain other seasonal trends and factors that may cause our results to fluctuate include: the geographies where we operate; holiday and vacation seasons; climate and weather; economic and political conditions; timing of the release of new products; significant equipment sales or the introduction of gaming activities in new jurisdictions or to new customers; and other factors.

Changes in, progress under, or the elimination of,of our share repurchase program could have an adverse effect on the price of our common stock.stock or CDIs.

As part of our capital allocation strategy, our Board of Directors has authorized a share repurchase program under which the Company is authorized to repurchase, from time to time, through June 12, 2027, up to an aggregate amount of $1.0$1.5 billion of our outstanding stock.stock (including CDIs). Decisions regarding share repurchases are within the discretion of the Board of Directors and can be influenced by a number of factors, including the price of our common stock,stock or CDIs, general business and economic conditions and our financial condition and operating results and may be suspended or discontinued at any time. Even if fully implemented, our share repurchase program may not enhance long-term stockholder value. Changes in, progress under (including failure to meet any previously disclosed target amount), or the elimination of,of our share repurchase program could have an adverse effect on the price of our common stock.stock or CDIs. For more information on our share repurchase program, refer to Note 16.

We have a history of significant indebtedness. As of December 31, 2024,2025, we had total indebtedness of $3.9$5.2 billion, net of unamortized discounts and deferred financing costs, consisting primarily of borrowings under the LNWI Credit Agreement, LNWI Credit Agreement A and the Senior Notes. As of December 31, 2024,2025, our total available liquidity was $936$927 million, which included $740$760 million of undrawn availability under the LNWI Revolver. On February 10, 2025, we amended the LNWI Credit Agreement which provides for new revolving commitments of $1.0 billion, replacing the existing revolving commitments of $750 million, and extends the maturity of the revolving commitments. On January 22, 2026, we further amended the LNWI Credit Agreement and reduced the applicable margin on the LNWI Term Loan B. See Note 14 for further details. On May 15, 2025, LNWI entered into the LNWI Credit Agreement A, pursuant to which LNWI borrowed an aggregate principal amount of $800 million in term loans under the LNWI Term Loan A facility. Loans under the LNWI Term Loan A will mature on May 15, 2028.

We may not have sufficient cash flows from operating activities,activities to service all of our indebtedness and other obligations, and may be forced to take other actions to satisfy our obligations, which may not be successful.

Agreements governing our indebtedness, including the LNWI Credit Agreement, LNWI Credit Agreement A and the indentures governing our Senior Notes, impose, and future financing agreements are likely to impose, operating and financial restrictions on our activities that may adversely affect our ability to finance future operations or capital needs or to engage in new business activities. Subject to certain exceptions, our credit facilities and/or indentures restrict our ability to, among other things:

TheBoth the LNWI Credit Agreement containsand the LNWI Credit Agreement A contain a covenant that is tested at the end of each fiscal quarter and requires us to not exceed a maximum Consolidated Net First Lien Leverage Ratio (as defined in the LNWI Credit Agreement) of 4.50x Consolidated EBITDA (as defined in the LNWI Credit Agreement); provided that such Consolidated Net First Lien Leverage Ratio is only tested under the LNWI Credit Agreement if the aggregate revolving extensions of credit (excluding certain letters of credit) exceeds 30% of the aggregate revolving commitments under the LNWI Credit Agreement.therein.

Various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants. Accordingly, we cannot assure that we will continue to maintain liquidity sufficient to satisfy our current obligations or comply with the Consolidated Net First Lien Leverage Ratio covenant set forth in the LNWI Credit Agreement.Agreement and LNWI Credit Agreement A.

Under LNW’sthe LNWI Credit Agreement, LNWI Credit Agreement A and the indentures governing our Senior Notes, we currently have restrictions on our ability to incur indebtedness and liens, make restricted payments and investments and prepay junior indebtedness, subject to certain exceptions.

The Company ishas consideringdelisted a dual primary listing on bothfrom the NASDAQNasdaq and thetransitioned ASXto ora sole primary listing on the ASX, meaning we may choose to delist our securities from NASDAQ, which could negatively affect the liquidity and trading prices of our common stock, and could result in a decline in stock pricesor andCDIs, couldimpacts limitour investors’ ability to trade in our securities and our access to the capital markets and could lead to price variations and other impacts on holders of our common stock, CDIs and other securities.

Our commontransition stockto isa publiclysole tradedprimary inlisting bothon the UnitedASX Stateshas and Australia, which causessubjected us to incurextensive significantnew legal,regulation accounting,enforced insurance and other expenses related to compliance with applicable regulations. To meetby the challengesASX posedas bywell beingas publiclyASIC, tradedwhich in the United States and Australia,requires our management and other key personnel to devote significant time and effort on compliance initiatives. In addition, although we have delisted from the Nasdaq, we remain a reporting company under SEC rules and therefore subject to the SEC’s disclosure requirements as well. Reporting requirements and stakeholder expectations may overlap, differ, or conflict between the two jurisdictions, which further increases the difficulty, cost and risks associated with compliance. Our compliance efforts increase our legal and financial costs and could require our personnel to devote greater time to ensure compliance with the relevant rules and regulations in both jurisdictions. In addition, our failure to successfully satisfy our obligations in one or both jurisdictions could subject us to delisting of our common stock, fines, sanctions, andor other regulatory action andin potentiallyeither or both jurisdictions, civil litigation.litigation and suspension or delisting from the ASX.

Moreover, to comply with the ASX Listing Rules, we have policies and procedures that we believe are designed to successfully satisfy our obligations under the ASX Listing Rules.Rules and Australian securities law. Failure or inability to follow these procedures and policies, or if they are not sufficient to prevent non-compliance, could subject us to liability, finesfines, andsanctions, regulatory action or lawsuits. We intend to invest resources to comply with evolving laws, regulations and standards, which could result in increased general and administrative expenses and a diversion of management’s time and attention from revenue generating activities to compliance activities. If, notwithstanding our efforts to comply with new laws, regulations and standards, we fail to comply, regulatory actions against us could harm our business.

We believe that our success depends, in large part, on providing secure products, services and systems to our customers, and on our ability to avoid,identify, protect against, detect, replicaterespond to and correctrecover from security threats and breaches, including software and hardware anomalies and fraudulent manipulation of our productsproducts, services and services.systems. Our businesses sometimes involve the storage, processing and transmission of players’ proprietary, confidential and personal information. We also maintain certain other proprietary and confidential information relating to our business, the business of our customers and personal information of our personnel. All of our productsproducts, services and servicessystems are designed with security features to prevent fraudulent activity. However, we cannot guarantee that these security features will effectively stop all fraudulent activities. Despite our security measures, our products, services and systems are vulnerable to attacks by hackers, customers, retailers, vendors or employees and could be breached due to malfeasance or other disruptions. Any security breach or incident that we experience, or that our third-party vendors and service providers or our customers experience, could result in unauthorized access to, misuse of, or unauthorized acquisition of our or our players’ data, the loss, corruption or alteration of this data, interruptions in our operations, or damage to our computers or systems or those of our players or third-party platforms. Any of these could expose us to claims, litigation, fines and other potential liability.

Our ability to prevent anomalies and monitor and ensure the quality and integrity of our products and services is periodically reviewed and enhanced, but may not be sufficient to prevent future attacks, breaches or disruptions. Similarly, we regularly assess the adequacy of our security systems, including the security of our gameshardware and software, including our games, to protect against any material loss to any of our customers and our players, as well as the integrity of our products and services to end users and the integrity of our games to players. We develop and maintain an information security program to identify and mitigate cyber risks, but the development and maintenance of this program is costly and requires ongoing monitoring and updating as technologies change and efforts and techniques to overcome security measures become more sophisticated. Accordingly, expanded use of the Internet and other interactive technologies may result in increased security risks for us and our customers. We cannot assure that our business orbusiness, a business we acquire or the businesses of our third party vendors and service providers will not be or hashave not been affected by fraudulent activities or a security breach or lapse, which could have a material adverse impact on our results of operations, cash flows and financial condition.

Online transactions may be subject to sophisticated schemes to defraud, launder money or other illegal activities. There is a risk that our products or systems may be used for those purposespurposes, including by our customers’ players. There is also a risk that we will be subject to fraudulent activitiesactivities, including by our employees. In addition, our gaming machines have experienced anomalies and fraudulent manipulation in the past, and may experience anomalies and fraudulent manipulation in the future. Games and gaming machines may be replaced by casinos and other gaming machine operators if they do not perform according to expectations, or they may be shut down by regulators. The occurrence of anomalies in, or fraudulent manipulation of, our gaming machines or our other products and services (including our SciPlay and iGaming products and services) has given, and may again give, rise to claims from players or customers; has led, and may again lead, to claims for lost revenue and profits and related litigation by our customers; and has subjected, and may again subject, us to investigation or other action by regulatory authorities, including suspension or revocation of our licenses or other disciplinary action. Additionally, in the event of the occurrence of any such issues with our products and services, substantial engineering and marketing resources may be diverted from other projects to correctaddress these issues, which may delay other projects and the achievement of our strategic objectives.

An increasing number of online services have disclosed security breaches, some of which have involved sophisticated and highly targeted attacks on portions of their services. If our information or cybersecurity systems or data are compromised, our ability to conduct our business may be impaired, we may lose profitable opportunities or the value of those opportunities may be diminished. If personal information of our players, customers or employees is misappropriated, our reputation with our players, customers and employees may be damaged resulting in loss of business or morale. The gaming industry, specifically, has been, and couldis expected to remain, a common target of cyber-attacks. We, and the gaming industry as a whole, expect to face continued attempts to gain unauthorized access to or through our information systems,systems and data, including cyber-attacks by computer programmers and hackers who may develop and deploy malicious software programs to gain access to the information of our users’players, information.customers and employees. These attacks could target our information systems as well as those of our business partners, employees, service providers, or other third parties. To date, attacks in the gaming industry have not had a material impact on our operations or financial results. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security, or the security of a business we acquire, occurs, public perception of the effectiveness of our security measures and brand, or the security measures and brand of a business we acquire, could be harmed, and we could lose customers or players. Data securitySecurity breaches and other data security incidents may also result from non-technical means, for example, actions by employees or contractors. Any compromise of our security, the security of our third-party vendors and service providers, the security of our customers or the security of a business we acquire, could result in a violation of applicable privacy and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability that ismay not always limited to the amountsbe covered by our insurance. Any such compromise could also result in damage to our reputation and a loss of confidence in our security measures. Any of these effects could have a material adverse impact on our results of operations, cash flows and financial condition.

We rely on information technology systems that are important to the operation of our business, some of which are managed by third parties. These third parties are typically under no obligation to renew agreements and there is no guarantee that we will be able to renew these agreements on commercially reasonable terms, or at all. These systems are used to process, transmit and store electronic information, to manage and support our business operations and to maintain internal control over our financial reporting. In addition, we collect and store certain data, including proprietary business information and confidential and personal information, and may have access to confidential or personal information in certain of our businessesbusinesses, that is subject to privacy and security laws, regulations and customer-imposed controls. We could encounter difficulties in developing or implementing new systems, maintaining and upgrading current systems and preventing security breaches.breaches and other system outages, disruptions and shutdowns. Among other things, our systems, including those managed by third parties, are potentially susceptible to damage, outages, disruptions or shutdowns due to fire, floods, power loss, technology failures, break‑ins, cyber‑attacks, network penetration, denial of service attacks and similar events. While we have and will continue to implement information security measures and data protection safeguards, our servers and other computer systems are potentially vulnerable to any number of threats, including viruses, ransomware, malicious software, hacking, break‑ins or theft, data privacy or security breaches, third‑party security breaches, employee error or malfeasance and similar events. Failures in our systems or services or unauthorized access to or tampering with our systems and databases, including those managed or controlled by third parties, could have a material adverse effect on our business, reputation, results of operations, cash flows and financial condition. Any failures in our computer systems or telecommunications services could affect our ability to operate our linked games or otherwise conduct business.

We are a leading cross-platform global games company with a focus on content and digital markets. Our portfolio of revenue-generating activities primarily includes supplying game content and gaming machines, CMSs and table game products and services to licensed gaming entities, and electronic pull-tabs and related services to charitable gaming entities; providing social casino and other online games, including casual gaming, to retail customers; and providing a comprehensive suite of digital gaming content, distribution platforms, player account management systems, as well as various other iGaming content and services. We also gain access to technologies and pursue global expansion through strategic acquisitions.

•On February 10, 2025, we entered into an amendment to the LNWI Credit Agreement which, among other things, (i) provides for new revolving commitments in an amount of $1.0 billion, replacing the existing revolving commitments of $750 million, (ii) extends the maturity of the revolving commitments, and (iii) reduces the applicable margin for the revolving loans by up to 50 basis points. See Note 14 for further details.

Inflation and supply chain logistics. Inflationary pressures, macroeconomic uncertainty, trade tariffsuncertainty and potential disruptions in our supply chain have caused and may again cause shortages of inputs/outputs, which in turn put inflationary pressures on the economy as a whole. Inflationary pressures may also have an impact on discretionary income as people allocate more of their disposable income toward higher priced necessity goods and services, which could impact our customers. These circumstances may change in the future and such changes could be material.

A high level of competition, with competitor expansion. Our major competitors are expanding their product and service offerings with integrated products and solutions that compete directly with ours. For example, competition in our Gaming business segment is highly competitive and is characterized by the continuous introduction of new games, gaming machines and related technologies. Our iGaming business segment is facing challenges related to expanding our market share within new and emerging markets, while our SciPlay business segment continues to be highly competitive with low barriers to entry, rapid evolution,evolution and a fragmented market and is subject to changing technology, shifting needs and frequent introductions of new games, development platforms and services.services, and pressures from sweepstakes operators. See Part I, Item 1 of this Annual Report on Form 10-K and Business Segment Results below describing competition and factors impacting each of our business segments.

For additional trends and uncertainties impacting our reportable business segments, refer below to Reportable Business Segment Results, specifically the Current Year Update section for each reportable business segment.

We report our operations in three reportable business segments — Gaming, SciPlay and iGaming — representing our different products and services. See Notes 2 and 3 for additional information.

iGaming revenue increased by $24$38 million, or 9%,13%, primarily due to growth in both the North American andmarket, European markets, drivenunderpinned by the strength of our originalfirst-party content (“1PP”) proliferation, and growth in our partner network, while the prior year benefited from $6 million in certain termination fees.network.

Our 20242025 consolidated revenues were impacted by $3$20 million of favorable foreign currency exchange impactimpact, compared to $9$3 million of unfavorablefavorable impact in the prior year.

Cost of revenue for the year ended December 31, 20242025 increaseddecreased, as a direct result of higher revenue as described above,primarily driven by $56$47 million in higherlower cost of products primarily associated with higherlower gaming machine sales, while cost of services remained relatively flat, primarily due to favorable margins on SciPlay direct-to-consumer revenue.sales.

R&D increaseddecreased primarily due to higherlower salariespayroll and benefitsrelated expenses of $31$4 million,million mostlyalong inwith ourvarious Gamingother andindividually SciPlayinsignificant segments.drivers.

Other Factors Affecting Net Income Attributable to L&W

REPORTABLE BUSINESS SEGMENT RESULTS

The following presents information about our reportable business segment results of operations for the year ended December 31, 20242025 compared to 2023.2024. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 20232024 Annual Report on Form 10-K for our reportable business segment results of operations for the year ended December 31, 20232024 as compared to 2022.2023.

Our Gaming business segment designs, develops, manufactures, markets and distributes a comprehensive portfolio of gaming content, products and services. We provide our Gaming portfolio of products and services to commercial casinos, Native American casinos, wide-area gaming operators such as LBOs, arcade and bingo operators in the U.K. and continental Europe, charitable organizations, and government agencies and their affiliated operators.

•WAP Participation games: WAP Participation games are electronically linked gaming machines that are located across multiple casinos within both single and multiple gaming jurisdictions or across Native American gaming jurisdictions. Players across linked gaming machines contribute to and compete for system-wide progressive jackpots that are designed to increase gaming machine play for participating casinos by giving the players the opportunity to win a larger jackpot than on a non-WAP gaming machine. We are responsible for funding WAP jackpots. We create WAP games using our proprietary brands and also using licensed brands. We operate our WAP systems at commercial casinos in states throughout the U.S., where it is approved by the local regulatory bodies and in certain Native American casinos.

•Premium and daily fee Participation games: We offer two categories of non-WAP premium and daily fee Participation games: LAP and standalone. LAP games are gaming machines that are located within a single casino and are electronically linked to a progressive jackpot for that specific casino. Our LAP gaming machines feature games including those offered as WAP and our proprietary brands such as ULTIMATE FIRE LINK®, HUFF N’ PUFF MONEY MANSION™®, INVADERS! ATTACK FROM THE PLANET MOOLAH®, and DRAGONLION TRIOLINK®. Our LAP products leverage both exclusive brand names and game play intellectual property, and typically offer players the chance to win multiple progressive jackpots, all of which tend to result in higher play volumes. We also provide certain standalone Participation games that are not linked to other gaming machines. Our standalone games feature titles under both licensed brands and our proprietary brands. Our standalone Participation gaming machines generally feature larger, more elaborate top-boxes and provide game play experiences not possible on a single screen game or on gaming machines that we sell.

Gaming operations revenue for 20242025 demonstrated continued momentum driven by strong game performance of hit franchises and premium games.games, as well as a contribution of $102 million in revenue from Grover. Gaming operations installed base for U.S. and Canada (excluding Grover) increased from 31,220 units in 2023 to 34,004 units in 2024,2024 alongto with36,692 units in 2025, while Grover had an installed base of 11,634 units as of December 31, 2025. Gaming operations (including Grover) had a slight increase in average daily revenue per unit of $0.79,$0.27, as growth in our premiumexisting gamesU.S. and Canada units was only partially offset by reductionsthe ininclusion ourof publiclower-yielding gamingGrover and leased core products.units. Average daily revenue per unit alsoincreased increasedslightly for International units by $0.68.$0.18 Alternatively,while International ending installed base units decreased from 22,327 units in 2023 to 20,165 units in 2024,2024 to 18,898 units in 2025, primarily due to the expected closure of certain LBOs in the U.K. along with the reduction of certain low-yielding units in Greece and Latin America. Gaming operations generated 33%39% and 36%33% of total Gaming segment revenues for 20242025 and 2023,2024, respectively.

AEBITDA increased by $109$135 million, or 12%,13%, and AEBITDA margin remainedincreased flatto at 50%.53%. These results were primarily driven by increased revenue andrevenue, a maintainedmore favorable revenue mix.mix, margin enhancements initiatives, Grover contributions and the impact of our current year incentive compensation payout structure.

SciPlay currently offers a variety of social casino games, including Jackpot Party Casino, Quick Hit Slots, Gold Fish Casino, Quick Hit Slots, 88 Fortunes Slots, Monopoly Slots and Hot Shot Casino. SciPlay continues to pursue its strategy of expanding into the online games market. Current casual game titles include Bingo Showdown and Backgammon Live. SciPlay continually develops and tests various new games. SciPlay’s social casino games typically include slots-style game play and occasionally include table games-style game play, while its casual games blend solitaire-style or bingo game play with adventure game features. All of SciPlay’s games are offered and played across multiple platforms, including Apple, Google, Facebook, Amazon and Microsoft. SciPlay launched a proprietary direct-to-consumer in-app purchase platform during 2023, with the goals of improving players’ experience and reducing costs of revenue given the lower payment processing fees and other related expenses for in-app purchases made through the proprietary platform, as compared to the platform fee charged by third-party platforms. In addition to original game content, SciPlay’s content library includes recognizable game content across our other platforms within Gaming and iGaming. This content allows players who like playing land-based game content to enjoy some of those same titles in SciPlay’s free-to-play games.

Gaming revenue increased 3%5% for the three months ended MarchJune 31,30, 2026, as compared to the prior year period. Revenue growth was primarily driven by higher Gaming operations revenue of $23$14 million,million supported by our diversified portfolio of high-performing game franchises, along with $43a $24 million increase in revenue from Grover,Grover. andTable $12products contributed $7 million in Tablegrowth Productsdriven growth.by Thisan wasincrease in global utility sales. These increases were partially offset by a decrease in Gaming machine sales of $52$7 millionmillion, as the prior year period benefited from the timing of international and North America VLT shipments, and a decrease in Gaming systems revenue of $9$12 million,million for the three months ended June 30, 2026, primarily due to lower hardware sales as compared to the prior year period.

SciPlay revenue decreased 7%by $18 million and $34 million, or 9% and 8%, for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the prior year period,periods. These decreases were primarily due to a softer social casino free-to-play market and a decline in average monthly payers primarily attributable to JACKPOT PARTY® Casino, partially offset by an increase in average monthly revenue per paying user, which increased 8%.4% and 6% for the three and six months ended June 30, 2026, respectively. Revenue generated via the proprietary direct-to-consumer platform continues to increase and represented approximately 27%29% and 18% of total SciPlay revenue for the three months ended MarchJune 31,30, 2026.2026 and 2025, respectively, and 28% and 16% for the six months ended June 30, 2026 and 2025, respectively.

iGaming revenue increased 18%by $11 million and $25 million, or 14% and 16%, for the three and six months ended MarchJune 31,30, 2026, respectively. Revenue growth was driven primarily by continued momentum in the North American markets underpinned by first-party content (“1PP”) proliferation and the expansion of our partner network.

Total cost of revenue decreased 8%4% and 6% for the three and six months ended MarchJune 31,30, 2026, respectively, primarily as a result of lower cost of products and services in correlation with lower gamingGaming machine sales and SciPlay revenue.

SG&A increasedwas 9%relatively flat for the three months ended MarchJune 31,30, 2026, as compared to the prior year period,period. SG&A increased 5% for the six months ended June 30, 2026, as compared to the prior year period. This was primarily due to higher salaries and benefits (including stock-based compensation) of $14 million, higher bad debt expense of $6 million (as the prior year reflected recoveries of certain balances), and higher legal and professional services of $7$5 million, partially offset by a decrease in marketing expense of $5$11 million.million, primarily driven by SciPlay.

D&A increased 19%18% for both the three and six months ended MarchJune 31,30, 2026, primarily due to depreciation related to Gaming operations installed base investments and growth, as well as D&A associated with assets acquired from the Grover acquisition.acquisition and a $9 million impairment charge related to a SciPlay studio restructuring.

Restructuring and other increased for the threesix months ended MarchJune 31,30, 2026, primarily due to $50 million in legal reserve contingencies associated with certain legal matters, while thecosts threerelated monthsto endedstrategic Marchreview 31,and 2025related includedtransactions decreased, including prior period legal and professional service fees associated with the acquisition of Grover of $5$14 million,million and $7$9 million in iGaming chargescharges, primarily related to the discontinuation of our iGaming Live Casino operations. The six months ended June 30, 2026 also included higher employee severance and related costs of $7 million and the revaluation of the Grover contingent acquisition consideration of $11 million.

REPORTABLE BUSINESS SEGMENT RESULTS (for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025)

Gaming revenue for the three and six months ended MarchJune 31,30, 2026 increased by 3%5% and 4%, respectively, as compared to the prior year period, primarilyperiods, driven by growth in Gaming operations revenue of 38%,revenue, which benefited from a $23 million, or 13%,an increase supported by our diversified portfolio of high-performing game franchises, along with $43an millionincrease in revenue from Grover, which currently operates in six states with over 12,200 units.Grover. The increase in Gaming revenue also benefited from Table Productsproducts growth of 24% for the three and six months ended MarchJune 31,30, 2026. Gaming machine sales decreased by $52 million or 25%,decreased, as the prior year periodperiods primarily benefited from the timing of international and North America VLT shipments,shipments and timing of international shipments impacting the six-month current year period, while Gaming systems revenue decreased by $9 million or 14% due to lower hardware sales as compared to the prior year period.periods.

Our growth is driven by the continued strength and success of our diversified portfolio of successful game franchises and the success of our COSMIC®, COSMIC UPRIGHT, LIGHTWAVE® and HORIZON®LIGHTWAVE SOLARTM cabinets. While demand remains strong, we are actively monitoring any impact of tariffs, inflationary pressures, supply chain disruptions, geopolitical uncertainty, and macroeconomic uncertainty that may impact our operations and financial results. See Part I, Item 1A “Risk Factors” within our 2025 10-K for further information regarding these factors which may have an impact on our Gaming business.

Gaming operations revenue growth for the three and six months ended MarchJune 31,30, 2026 was primarily driven by aincreases $23of $14 million, or 13%,7%, increaseand $37 million, or 10%, respectively, from strong game performance of hit franchises, including our premium games, as well as a contributionincreases of $43$24 million and $67 million, respectively, in revenue from Grover. Gaming operations for U.S. and Canada (excluding Grover) had a 1,805-unit2,271-unit increase in installed base from MarchJune 31,30, 2025 to MarchJune 31,30, 2026,2026 while Grover had a 12,294-unit installed base as of March 31, 2026. Gaming operations (including Grover) hadand an increase in average daily revenue per unit of $1.33$2.83 and $1.46 for the three and six months ended MarchJune 31,30, 2026, respectively, as average daily revenue per unit growth related to our existingpremium U.S. and Canada units was partially offset by the inclusion of lower-yielding Grover units. Average daily revenue per unit for Internationalinternational units increaseddecreased by $0.89$0.59 for the three months ended MarchJune 31,30, 2026,2026 whileand increased by $0.15 for the six months ended June 30, 2026. International ending installed base units decreased by 1,1861,118 units from MarchJune 31,30, 2025 to MarchJune 31,30, 2026, primarily due to the expected closure of certain LBOs in the U.K.

Gaming machine sales revenue decreased by $52$7 millionmillion, or 25%,4%, and $58 million, or 15%, for the three and six months ended June 30, 2026, respectively, as the prior year periodperiods benefited from the timing of international and North America VLT shipments, with the six-month prior year period also benefiting from the timing of international shipments.

Gaming systems revenue decreased 14%16% to $54$61 million for the three months ended MarchJune 31,30, 2026 and by 15% to $115 million for the six months ended June 30, 2026. The majority of the decreasedecreases waswere due to lower hardware sales as compared to the prior year period.periods.

Table Productsproducts revenue increased 24%13% to $63$62 million for the three months ended MarchJune 31,30, 2026 and by 18% to $125 million for the six months ended June 30, 2026. The majority of the increaseincreases waswere due to higher utility salessales, as compared to the prior year period.periods.

Operating expenses increased by $22$6 million and $25 million for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the prior year period,periods, primarily due to $18$8 million and $27 million in higher D&A, respectively, of which $16$7 million and $24 million is related to Grover, and the remainder of which is related to increased Gaming operations investment,investment. coupledOperating withexpenses $14also increased due to $2 million and $16 million in higher salaries and benefits (including stock-based compensation). for the three and six months ended June 30, 2026, respectively. These increases were partially offset by $13$5 million and $18 million in lower cost of revenuerevenue, respectively, primarily associated with a decrease in Gaming machine sales.

AEBITDA increased by $17$27 million and $44 million for the three and six months ended MarchJune 31,30, 2026, respectively, while AEBITDA as a percentage of revenue (“AEBITDA margin”) increased to 53%55% and 54% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to 51%53% and 52%, respectively, for the prior year period,periods, primarily due to margin enhancement initiatives and a more favorable revenue mix.

SciPlay currently offers a variety of social casino games, including JACKPOT PARTY® Casino, QUICK HIT® Slots, GOLD FISH® Casino, 88 FORTUNES® Slots, MONOPOLY Slots and HOT SHOT CASINO®. SciPlay continues to pursue its strategy of expanding into the online games market. Current casual game titles include BINGO SHOWDOWN® and BACKGAMMON LIVE. SciPlay continually develops and tests various new games. SciPlay’s social casino games typically include slots-style game play and occasionally include table games-style game play, while its casual games blend solitaire-style or bingo game play with adventure game features. All of SciPlay’s games are offered and played across multiple platforms, including APPLE, GOOGLE, FACEBOOK, AMAZON and MICROSOFT. Revenue generated via SciPlay’s proprietary direct-to-consumer platform continues to increase and represented approximately 27%28% of total SciPlay revenue for the threesix months ended MarchJune 31,30, 2026. In addition to original game content, SciPlay’s content library includes recognizable game content across our other platforms within Gaming and iGaming. This content allows players who like playing land-based game content to enjoy some of those same titles in SciPlay’s free-to-play games.

SciPlay continues to deliver steady results and quality payer engagement and monetization. Revenuerevenue decreased by 7% for the three and six months ended MarchJune 31,30, 2026, primarily due to a softer social casino free-to-play market and a decline in average monthly payers, largely attributable to Jackpot Party® Casino, partially offset by an increase in average monthly revenue per paying user. Additionally, theThe overall social casino industry is experiencing pressures from sweepstakes operators and remains challenged amid a mature social casino market. SciPlay continues to deploy strategic game updates, utilize enhanced analytics, pursue international expansion and benefit from the proprietary direct-to-consumer platform.

SciPlay revenue decreased by 7%9% and 8% for the three and six months ended MarchJune 31,30, 2026, primarilyrespectively, due to a softer social casino free-to-play market and a decline in average monthly payers, primarily attributable to Jackpot Party® Casino andCasino, partially offset by an increase in average monthly revenue per paying user. Direct-to-consumer revenue increased by 51% and 63% for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods.

Average MAU and average MPU for the three and six months ended MarchJune 31,30, 2026 decreased due to the turnover in users. ARPDAU decreased slightly while AMRPPU increased, despite payer conversion decreasing slightly, as SciPlay continues to improveenhance content and features, resulting in steady paying player interaction.features.

Operating expenses decreased 10%1% and 7% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the prior year period,periods, which was primarily driven by lower cost of revenue and higher margin on our direct-to-consumer platform revenuerevenue, andas well as lower user acquisition costs of $6 million.million and $12 million for the three and six months ended June 30, 2026, respectively, partially offset by higher D&A costs of $9 million and $11 million, respectively.

AEBITDA for the three months ended MarchJune 31,30, 2026 increaseddecreased by $2 million to $66$72 million as compared to the prior year period, while it remained flat for the six months ended June 30, 2026, as compared to the prior year period. SciPlay AEBITDA margin increased by 3 and 4 percentage points to 35%,40% and 38%, respectively, primarily due to revenue generated via our proprietary direct-to-consumer platform, which generatesyields higher margins.

Our iGaming business segment provides a comprehensive suite of digital gaming content, distribution platforms and player account management systems, as well as various other iGaming content and services. The majority of our revenue is derived from casino-style game content, including a wide variety of internally developed and branded games as well as popular third-party provider games. These games are made available to iGaming operators via content aggregation platforms, including Open Gaming System, remote gaming servers and various other platforms. We also provide our Open Platform System, a player account management system which offers a wide range of reporting and administrative functions and tools providing operators full control over all areas of digital gaming operations. Generally, we host the play of our game contentcontent, which is integrated with the online casino operators’ websites.

In November 2025, the U.K. Government’s Autumn Budget increased gambling duties that will increase tax liabilities for our customers and consequently impact our revenue and earnings, which became effective April 1, 2026. We arecontinue stillto assessingassess the impact on our iGaming segment, which includes U.K. revenue representing approximately 15% to 20% of total iGaming revenue subject to this tax. See Part I, Item 1A “Risk Factors” within our 2025 10-K for further information regarding U.K. Government gaming tax changes.

Results of Operations iGaming revenue for the three and six months ended MarchJune 31,30, 2026 increased 18%,14% and 16%, respectively, as compared to the prior year period,periods. Revenue growth was primarily driven by continuing momentum in the North American market underpinned by 1PP growth and the expansion of our partner network.network, despite increased U.K. gambling duties, which became effective on April 1, 2026. Wagers processed through our Open Gaming System for the current yearthree-month period ended June 30, 2026 increased to $29.9$31.3 billion from $25.2$26.6 billion during the prior year period.

Operating expenses increased 1%9% and 4% for the three and six months ended MarchJune 31,30, 2026, respectively, as higher costs in correlation with higher revenues were partially offset by $7$2 million and $9 million, respectively, in restructuring costs in the prior year period,periods, largely related to the discontinuation of our Live Casino operations. AEBITDA increased 22%18% and 20% for the three and six months ended MarchJune 31,30, 2026, respectively, and AEBITDA margin increased to 36% for both the three and six months ended MarchJune 31,30, 2026, primarily due to operational efficiencies and higher margin1PP onrevenue 1PP.mix.

As of MarchJune 31,30, 2026, our principal sources of liquidity, other than cash flows provided by operating activities, were cash and cash equivalents as well as amounts available under the LNWI Revolver.

Total cash held by our foreign subsidiaries was $147$143 million and $156 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. We believe that substantially all cash held outside the U.S. is free from legal encumbrances or similar restrictions that would prevent it from being available to meet our global liquidity needs.

Our ability to make payments on and to refinance our indebtedness and other obligations depends on our ability to generate cash in the future. We may, from time to time, repurchase or otherwise repay, retire or refinance our debt, through our subsidiaries or otherwise. We may also repurchase shares of our outstanding common stock (including CDIs) through our Board-approved share repurchase program, up to an aggregate amount of $1.5 billion through June 12, 2027. During the six months ended June 30, 2026, we repurchased approximately 1.8 million CDIs at an aggregate cost of $156 million (excluding excise taxes). On February 19, 2026, we retired all existing treasury shares and restored such shares to the status of authorized but unissued shares in accordance with the Nevada Revised Statutes. All future shares (including CDIs) repurchased under our share repurchase program will also be retired and restored to the status of authorized but unissued shares.

Net cash provided by operating activities decreasedincreased primarily due to unfavorableearnings growth coupled with favorable changes in working capital accounts. Changes in working capital accounts for the threesix months ended MarchJune 31,30, 20262026, as compared to the threeprior monthsyear endedperiod, March 31, 2025 were negatively impactedimproved by $137$73 million paidprimarily due to settle certain legal matters, including the Aristocrat matter, and higher cash paid for interest and the timing of expenditures,receivables collections and payment of expenditures over the current year period, partially offset by the$65 timingmillion ofin collectionhigher oflegal receivables.settlement payments during 2026.

Net cash used in financing activities decreased primarily as a result of lower purchases of our outstanding common stock (including CDIs) under our share repurchase program, partially offset by increased debt repayments, net of borrowings. During the threesix months ended MarchJune 31,30, 2026 and 2025, we paid $22$163 million and $166$270 million, respectively, to purchase our common stock (including CDIs) (excludingincluding $7 million and $4 million in excise taxtaxes paid, respectively). The prior year included $800 million of borrowings incurred under the LNWI Term Loan A, which was used to fund the Grover acquisition.

For additional information regarding our credit agreements and other debt, interest rate risk and interest rate hedging instruments, see Notes 14 and 15 and Part II, Item 7A “Disclosures About Market Risk” in our 2025 10-K as well as Notes 10 and 11 and Part I, Item 3 “Quantitative and Qualitative Disclosures About Market Risk” below in this Quarterly Report on Form 10-Q.

As of MarchJune 31,30, 2026, we did not have any significant off-balance sheet arrangements.