© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Welcome to the Scientific Games Fourth Quarter and Full Year 2021 Earnings Conference Call. May name is Ruby, and I will be your moderator for today's call. [Operator Instructions]
I will now hand over to your host, Jim Bombassei, Senior Vice President of Investor Relations, to begin.
Thank you, operator. Good afternoon, everyone. During today's call, we will provide a business strategy update, along with a discussion of our fourth quarter and full year 2021 results and operating performance, followed by a question-and-answer period.
With me today are Chairman, Jamie Odell; Vice Chair, Toni Korsanos; CEO, Barry Cottle; and CFO, Connie James. In terms of our prepared remarks, Jamie, Toni Barry and Connie will first provide a business strategy update. This will then be followed by Barry and Connie discussing our fourth quarter and full year results. We will then take your questions.
Our call today will contain statements that include forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call. For information regarding these risks and uncertainties, please refer to our earnings release issued earlier this afternoon, the materials related to this call posted on our website and our filings with the SEC.
We will also discuss certain non-GAAP financial measures. A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings release as well as in the Investors section on our website.
On September 27, 2021, we announced that we had entered into a definitive agreement to sell our Sports Betting business to Endeavor. And on October 27, we announced that we had entered into a definitive agreement to sell our Lottery business to Brookfield Business Partners.
Beginning in the third quarter of 2021, we have reflected these businesses as discontinued operations in our consolidated statement of operations and reflected the assets and liabilities of these businesses as held for sale in our consolidated balance sheet for all periods presented.
We are reporting our results of continuing operations in 3 business segments: Gaming, SciPlay and iGaming. iGaming is our former digital business segment, excluding Sports Betting. Amounts and disclosures referring to combined include both our continuing and discontinued operations.
As a reminder, this conference call is being recorded. A replay of this webcast and accompanying materials will be archived in the Investors section of our website at scientificgames.com. Supplemental reference slides are available on our Investor Relations website to help facilitate your review of the company's results, including an earnings presentation and historical recast business segment information.
Now let me turn the call over to Jamie.
Thank you for joining the call today. Before we get to today's update and the earnings presentation, Toni and I wanted to share our perspective on this company's journey over the last 1.5 years, the insights which drove our investment thesis and the material changes in financial outcomes, which will result.
From the outset, we recognize the enormous opportunity to drive increased shareholder value through restructuring the balance sheet, redefining the portfolio and becoming a sustainable growth company. Very encouragingly, we've already seen the early stages of this strategy successfully executed and starting to deliver improved metrics and the associated increased value we target for our investors, our customers and our employees.
We originally joined the team as consultants to the gaming business, partnering with Barry and the senior leadership team. We've quickly developed a highly effective relationship with Barry. The complementary nature of combining our land-based experiences with his exceptional mobile gaming experience, proved immediately powerful.
As we developed our collective thinking, we became fully aligned that the company was ready for and capable of transformative change, beginning with optimizing the portfolio. Scientific Games was essentially functioning as a holding company for a diverse set of assets. And while many of these assets were incredibly valuable, they were poorly integrated. There was no core vision of how they fit together or how they could complement each other and thereby deliver incremental value. There was no clear and coherent argument for investments. And importantly, the company was hamstrung by high levels of debt and plagued by recurring leadership changes.
The debt burden resulted in gearing levels of around 10x AEBITDA, limiting the ability to invest in growth and distracting management from focusing on some core fundamentals. The company lacked strategic vision and direction due to the complexity of the portfolio and the debt burden it carried.
Despite these limitations, we were convinced that the company had the potential for enormous growth. And most importantly, we had the right team and that they were energized and ready to drive a positive change program at all levels. While we were immediately impressed by the potential of key leaders and creative talent already in the business, the company has also added significant new talent during the last 18 months. We've been attracted by the excitement of this transformational change.
Within that mix of assets, we saw a well-established leading positions in land-based game as well as leading positions in a number of other key strategic areas by mobile games and iGame which provided a strong platform for transformation and a clear pathway for success.
Now I will turn it over to Toni.
The assets Jamie outlined were clearly tied together by content. The company's greatest strength was its underlying IP and we saw a game-changing opportunity to unlock value by using that content as a foundation and building our strategy from there across land-based gaming, mobile games and iGaming. The company already has established positions in growth segment.
First, however, we would need to dramatically simplify the company's operations. We would need to liberate it from its [ pricing ] debt. To us, cash is king. And it was clear that divesting the noncore assets would immediately delever the business to allow it to drive higher returns to shareholders as well as create space for the pursuit of strategic growth investments, both organic and inorganic.
The opportunity to do so came when the MacAndrews & Forbes decided to divest their interest in the company. And we seized the opportunity. We introduced new long-term growth-oriented investors to purchase the shares, and we joined a new board with a majority of independent directors with a wide range of experience so we could help to guide and drive transformational change under Barry's leadership. This was also reflected in the appreciation of the share price at the time of these changes.
And here, our plan was to accelerate and progress the transformation. The reason we had such strong conviction about the potential transformation of the business was that we had done something similar before. During our time at Aristocrat, we executed a successful turnaround that created enormous shareholder value during our combined tenures by following a similar playbook. We created a high-performance culture, we redoubled our commitment to attracting talent. We expanded into new distribution channels, accelerating our digital capability. We drove operational excellence and we developed a disciplined M&A strategy that drove highly accretive returns.
But at the heart of it all was our adherence to a clear, simple idea of who the company was and what the company did. We've built great games with industry-leading content. Everything grew from that foundation. In executing this strategy, we consistently applied strong discipline, focused on optimizing returns and managing debt throughout this journey. The results of the transformation spoke for themselves, shareholder return of nearly 700% an eightfold increase in market cap, over 200% growth in revenue, EBITDA growing by over 4x to top $1 billion.
We believe the similar success story was possible for Scientific Games. And in fact, the starting point was actually stronger. The portfolio was robust but misaligned, realizing the value of the lotteries and sports businesses enabled us to pursue the broader content opportunity. What's more, we believe that Scientific Games with balanced leadership composed of new and existing talent was capable of altering such a story. Barry's experience in building digital businesses from past executive roles at companies like Zynga and Electronic Arts and his record of leading SG Digital's growth, made him the ideal leader for this strong group of executive talent at the company and on the Board and the perfect partner for this turnaround.
Thank you, Toni. With our previous experience firmly in mind, working closely with Barry and the leadership team, we embarked on a comprehensive head-to-toe strategic review. Since the change in control, we have seen our market capitalization increase threefold as investors begin to recognize the potential for ongoing share price growth, and we're still at the beginning of this journey.
A strategic review led us to announce a game plan for the company's transformation, one that relied on 3 key strategic pillars. First, we would optimize our portfolio by divesting the Lotteries and Sports Betting business units. Then with the proceeds from these transactions, we would significantly delever, shifting from a debt to an equity story, allowing us to position the company for superior returns, driving sustainable growth and strong cash generation.
All this results in a better aligned portfolio, which will also provide the opportunity to invest in growth opportunities that fit with our new clearer vision for the company, a vision which can drive sustainable growth and cash generation. These actions will result in gearing levels that immediately reduce our net leverage significantly below the levels we underwrote in our investment thesis and with double-digit revenue and AEBITDA growth a higher mix of digital revenue within our portfolio, targeting 50% and higher sustainable cash flow generation going forward.
This provides us with the optionality to drive long-term shareholder value in multiple ways. The clear goal is for the company to come out on the other side, a more focused company with a strong balance sheet, a concrete idea of its corporate identity, a laser-focus on creating the world's greatest content and attracting and retaining the best talent. In summary, a clear pathway for growth.
12 months later, we couldn't be happier with the way the team have executed on our transformation strategy and our initial expectations are already being exceeded. The divestment of Lotteries and Sports Betting are poised to significantly resolve the complexity within our portfolio. And at more than $7 billion of combined gross proceeds, they will deliver cash proceeds well beyond our expectations.
We want to be very clear on our capital priorities following the Lottery sale. One, immediate debt reduction to a net debt leverage ratio below 4x. Two, share buybacks to return capital to shareholders now and in the future. At current share price levels, buybacks will be highly accretive to shareholder value. Three, disciplined M&A. We will always prefer using our capital for buybacks, debt reduction and organic investments, and as we're convinced that M&A will deliver greater long-term shareholder value than other uses of our capital.
Bad debt reduction means we can write a new chapter in this company's history, one defined not by debt, but by our work to sustain our double-digit growth profile, achieve a 50% digital mix, drive sustainable earnings and cash generation while maintaining lower gearing levels and establishing ourselves as the employer of choice in the games industry.
This pivot is a hugely exciting moment for us, and we're marketing it with a debut of an exciting new brand. But none of this would have been possible without the tremendous hard work of our teams around the world. Going into this, we knew it would be a monumental effort, but we had confidence in the brilliance, creativity and determination of our people. And that confidence has only grown stronger as we watch them execute this transformation. So I'd like to offer not just my deepest gratitude but also my congratulations to every member of our team.
And now to provide an update on how we're operationalizing our strategy and progress to date, I'd like to turn things over to Barry.
Thank you, Jamie and Toni for your leadership and your partnership. Let me start with the news. We embarked on a path to rebrand the business following the decision to transform the portfolio. After extensive consultation with key stakeholders, we've chosen a new brand that reflects our focus on creating great game franchises and technologies that support cross-platform game play.
I'm really excited to announce that our new name is Light & Wonder. This name evokes the feelings we want to capture in the work we do every day: excitement, inspiration, imagination, surprises, maybe even a little bit of magic and certainly a lot of fun. We are fortunate to make games for a living.
Our new name is a constant reminder that our future will be defined by the fun we're able to build into those gains and the experiences we're able to create for our players. As we begin this new phase of our transformative journey, we're grateful to be able to focus our energy on creating those experiences.
Turning to an update on our progress today. We are very pleased with the strong performance we achieved in the quarter, which capped what was an outstanding year. As we reflect on what a difference the past year has made for our organization, we sit here today with an enviable position with incredibly strong financials and with a rapidly transformed balance sheet. We navigated exceptionally well in a dynamic environment and delivered on our key promises.
Our results this past year are evidence of our momentum and our ability to drive sustainable, long-term growth and profitability. In fact, we're already delivering the double-digit growth and robust cash generation that Jamie laid out.
In 2021, year-over-year, our revenue grew 27%. Our AEBITDA grew 112% over last year, and we generated $443 million in free cash flow. 7 months into our transformation, we are tracking well ahead of our original expectations. We are on the cusp of closing the sale of our Lottery business, announcing today that we anticipate that it will close this month pending final regulatory approvals.
We continue to be on track to close our Sports Betting sale by the end of the second quarter. As Jamie said, the Lottery and Sports Betting transactions have the effect of resolving the complexity within our portfolio and they're bringing in substantially more than we expected, over $7 billion combined.
With the $5 billion of net after-tax cash proceeds from the sale of lottery coming this month, we want to be really clear on our capital priorities. Debt reduction to a target net debt leverage range of 2.5x to 3.5x. We will dedicate 90-plus percent of the lottery proceeds to pay down debt. And by the end of Q2, with our sale of sports, we will be squarely in our target range.
Share buybacks. The Board has authorized a 3-year $750 million share repurchase program. We see buybacks at the current share price levels as highly accretive to shareholder value. Disciplined M&A that delivers superior financial value to shareholders. As Jamie said, we will always prefer using our capital for buybacks, debt reduction and organic investments unless we're convinced that M&A will deliver greater long-term shareholder value than other uses of capital.
Taking a look at our new organization, we offer investors a clear, coherent and compelling investment thesis. We are committed to driving sustainable double-digit growth with a focus on cash generation and using that cash to drive shareholder value. Growth, cash and shareholder value are our touchstones. We will make that happen by building on our company's core strengths.
We're the world's leading game content and platform provider, positioned in markets with a collective TAM of over $60 billion. We're a streamlined organization singularly focused on developing cross-platform games and franchises. We're uniquely positioned to take advantage of the convergence between land-based and digital gaming, both because our IP and because of our best-in-class systems business. All of this, with a healthy balance sheet and disciplined approach to managing operations and capital. And best of all, we can finally organize all our efforts around a clear and compelling strategic goal, becoming the leading cross-platform global game company.
And the great news is that we have all of the major pieces in place today. We are the leading end-to-end gaming solutions provider with leadership positions in gaming ops and game sales. As we look forward to the land-based gaming industry bouncing back this year and next, we will benefit as the #1 provider for casino systems, table games and table utilities. With a robust product road map and recent hardware and game releases, we are already achieving share gains.
We also have the leading position in digital gaming, with the world's largest collection of iGaming content, the #1 gaming aggregation platform and the leading PAM. We're enjoying strong tailwinds as U.S. iGaming proliferate, and we're riding those tailwinds by expanding on our original content offerings, bringing our great land-based games to digital and also creating digital native content. In addition to first-party content, we're leveraging our best-in-class aggregation platform to identify and target key third-party studios, as we've successfully done with Lightning Box and Elk. These acquisitions are already exceeding our investment thesis as both have achieved record GGR since acquisition, expanding our content capabilities and delivering long-term shareholder benefits.
And in late 2021, we acquired Authentic Gaming, entering the fast-growing live casino space. Meanwhile, SciPlay is positioned as one of the top-ranked social casino players globally, with sticky player cohorts driven by our expertise in player engagement and monetization, providing a strong foundation as we look to diversify into casual gaming. SciPlay has a strong core social casino business and we're going to build on that success by leveraging our expertise in data analytics, user acquisition and live services to keep growing.
With our growth in iGaming and SciPlay, we are making great progress toward increasing the digital share of our revenues to 50% with investments in our existing game studios and targeted M&A focused on content. We also have an exciting new side play acquisition to tell you about, Alictus. This acquisition substantially expands SciPlay presence in the casual market and supports further growth, thanks to Alictus' talented group of developers, deep pipeline of hyper-casual games and entry into the fast-growing mobile ad market.
Alictus represents just the kind of M&A that we believe best delivers superior value for shareholders. Disciplined, strategic and value-accretive acquisitions that complement our skills and accelerate our strategies. Together, our Gaming, iGaming and SciPlay businesses are even stronger as we leverage our games fully cross-platform for a seamless player experience as digital converges with land-based.
And we have a great team in place who are executing on our vision with speed and urgency as demonstrated by our progress today. Over the past 3 years, we've made more than 25 executive and senior management hires across game design and development, technology, finance, sales and marketing and data and analytics to augment the team that was in place. And just since September 2020, we've added the company's Chief Financial Officer, Chief Strategy Officer, Chief Product Officer and Chief Technology Officer.
We have been seizing on the opportunity to invest in our people and culture that is the foundation of our success and attract great talent by becoming the employer of choice. We will also continue to invest in our own technology and capabilities to create innovative solutions that drive value for our customers and players as the industry converges.
With that, let me turn things over to Connie.
Thanks, Barry. I want to take a moment to talk about our improving financial flexibility, our capital allocation framework and our commitment to driving shareholder value. Our approach to capital allocation will be balanced and opportunistic. The significantly strengthened financial position we will gain with the proceeds from the divestments, coupled with our strong cash flow, will allow us to materially delever, return substantial capital to shareholders while continuing our disciplined approach to investment, all aligned to our commitment to create a sustainable and profitable growth company.
As Barry mentioned, by the end of the second quarter with the sale of Lottery and Sport, we will be squarely in our target net leverage range of 2.5x to 3.5x. This will significantly strengthen our credit profile and enhance our financial flexibility and access to capital markets. We will have the opportunity to very quickly [ pull turn ] high coupon bonds and pay down and refinance our credit agreement.
As we delever, we will see dramatically lower interest expense, driving significant cash flow per share and ultimately, value for our shareholders. The authorization of a 3-year $750 million share repurchase program underscores a clear commitment to return capital to shareholders. It reflects our strength in balance sheet, the recurring nature of our revenues, our strong cash flow generation and the tremendous value we see in our shares.
Of course, another significant part of the value we generate stemmed from our strong and durable growth profile. Approximately 75% of our revenues are recurring in nature. Additionally, our focus on increasing our digital mix through organic investment and disciplined M&A will accelerate the digital component of our growth strategy, further enhancing our recurring revenue mix.
The combination of our debt paydown, share buyback program and value-accretive investment focus is another testament to executing the strategy we outlined. With a strategic and disciplined approach to capital allocation, we will regularly review and assess the most productive ways to deploy our capital to create significant value for our shareholders. We will do this with a commitment to retaining a strong balance sheet and liquidity position.
This is an exciting time for us as we make these transformational changes to our balance sheet and capital structure. Now I will turn it back to Barry for the fourth quarter and full year highlights.
Thanks, Connie. 2021 was a tremendously successful year. We benefited from the key strategic initiatives we have set in motion and the continued recovery in the gaming market as we strengthened our leading positions and laid the foundation for sustainable growth.
Let's get into the breakdown by business. First, Gaming. Let me share some headlines. North America game ops revenue exceeded 2019 levels, both for the quarter and for the full year. Our North American premium ops installed base grew for the sixth consecutive quarter and again exceeded 2019 levels. And it stands at a record 42% of our total North American installed base, giving us a high-margin recurring revenue stream.
In addition, North American game sales continued to accelerate, with nearly 3,500 units sold this quarter and replacement units approaching 2019 level. We spent the last 2 years working relentlessly to build the best games and cabinets. And so when the market began to recover, we were in a position to drive share gains. A great example of this is Kascada. In its very first year, Kascada's North American casino floor footprint already exceeds 8,000 units, and it's our first cabinet to scale internationally, a strong proof point for our strategy of driving operational efficiency by transitioning to a global product road map.
We talked earlier about how excited we are to focus our energy on making great games. While the performance of games like Dancing Drums Explosion, Coin Combo, MONOPOLY Lunar New Year, Willy Wonka Dreamer of Dreams and Ultimate Fire Link along with upcoming titles, like Golden Fire Link, Ultimate Fire Link Explosion and [indiscernible] is why we're so excited.
Looking ahead, we entered 2022 with a fully refreshed portfolio of cabinets, showcasing our evergreen franchises. And as operator CapEx continues to grow, so will we.
Here are some upcoming highlights. Kascada Dual Screen is expected to launch in Q2 across our gaming ops and global outright sales portfolios with a robust portfolio of games, including Double Money Link, 88 Fortunes Money Coins, Lock it Link Riches and Gold Fish Feeding Time. In fact, Gold Fish Feeding Time is expected to launch fully cross-platform in Q3 this year, giving players the ability to play in land-based, social and digital channels.
The Landmark 7000 stepper is scheduled to launch in early Q3 with beta testing underway, and will feature our hit evergreen Blazing 7s franchise.
I'd also like to mention Australia, another key market for us. We made great progress there, with our ship share nearly doubling to 14% in 2021.
Moving over to systems. We continue to maintain strong momentum as the market leader. This past quarter, we had particularly strong sales of our state-of-the-art iVIEW 4 player interface, which enables operators with cashless capabilities and whose success enabled us to drive sequential growth in Q4.
Cashless is increasingly becoming a focus for us. That's why we're expanding our offering with AToM, the #1 cashless solution in table games, which enables players to use their debit cards to buy chips right at the table.
Our tables business, also a market leader, continued to strengthen against the backdrop of the recovery in domestic live table games. The tables business is also on its way to becoming a recurring revenue stream thanks to growth in our vault subscription-based bundled service.
Looking ahead, we anticipate continued strong performance from our new games and cabinets, and we're continuing to invest in growth, with a strong pipeline of product launches planned for 2022 and 2023.
Let's move on to iGaming. I talked earlier about the convergence in the gaming industry as players increasingly look to play their favorite land-based games online. In that context, our iGaming business isn't just a market leader. They're truly differentiated. We have the leading aggregation platform integrated with major operators. We have the leading PAM. We can offer more than 3,500 games and they're not just any games.
In Q4, it was our own original content accounting for an average of 16 of the top 20 performing games on our iGaming platform in the U.S. So the trend towards convergence, where content is the engine is just more wind in our sails, and we're building off a strong Q4 in which we more than doubled U.S. revenue. Overall, it's up 112% over last year, and 6% sequentially.
We continue to lead in market share in the states where we operate. And in Q4, we added another to the list with Connecticut launching an iGaming. We are now live in 6 states.
Looking internationally, Q4 growth was impacted by the easing of lockdowns and restrictions as well as regulatory changes in certain countries. Still, we had continued momentum in Canada, and we launched with NLO in the Netherlands for both our iGaming platform and AMP. I mentioned that the core of our iGaming success is the games themselves, and this ties in with our inorganic investments and growth strategy.
Looking at our acquisitions. Lightning Box, our #1 digital native studio on OGS is performing strongly with 5 consecutive months of GGR growth. And there's more opportunity ahead as we launch a new game every month in the U.S. and as we launch in Ontario.
Meanwhile, in our first month with Elk Studios, they posted record GGR. And we're targeting a U.S. and Canada launch of Elk content in the second half of 2022. Between the ramp-up in production at Lightning Box and Elk and a number of land-based games launching from our new Las Vegas studio, this coming year, we'll see a significant increase in the number of original game launches.
Additionally, with the acquisition of Authentic Gaming, we believe we have a unique opportunity in live dealer, combining our well-known proprietary land-based table brands and content with Authentic's capability and technology to create a truly differentiated offering. Stay tuned. It's coming later this year.
Bottom line, with iGaming GGR achieving a new U.S. record in December, Ontario scheduled to launch iGaming next month and a robust content road map for 2022 and beyond, we feel great about the path forward and are poised to strengthen our leadership position in the market.
Finally, SciPlay, which is quickly evolving to become the diversified global game developer. The core business continues to perform exceptionally well with our industry-leading engine, live services capabilities as well as player focus continue to drive improved engagement and monetization. SciPlay capped the year with strong performance, posting the second highest ever quarterly revenue and record revenue for the full year.
Meanwhile, payer conversion achieved record levels for the year. Several important highlights in the quarter and for the year. Jackpot Party rebounded strongly in Q4 and achieved record revenue for the full year, and this is a game that's been around for 12 years. The new version of Quick Hit drove 14% sequential revenue growth, and this was also a record revenue year for the game.
Gold Fish marked its fifth consecutive quarter of record revenue and posted a record year. Solitaire Pets Adventure launched worldwide in Q4 and is off to a good start with strong user engagement. And SciPlay is investing in its capabilities. We're making both organic and inorganic investments in SciPlay because we see it as core to our cross-platform vision with a real change to significantly grow and scale the business, driving value for shareholders.
With SciPlay acquisition of Alictus, this strengthens their foothold in the casual market, providing a deep pipeline of games and entry into the mobile advertising market. So lots of exciting results and momentum here.
But let me now turn it over to Connie to discuss some financial highlights.
Thanks, Barry. Before I speak about the overall financial performance, I want to remind you that with the pending sales of our Lottery and Sports Betting businesses, we have classified those as discontinued operations.
Let me begin with the key financial highlights. Fourth quarter consolidated revenue increased 21% and consolidated AEBITDA grew 67% with the continued momentum in our gaming business as well as the strong growth at iGaming and at SciPlay.
For the full year, consolidated company revenue was up 27% and AEBITDA was up 112%, more than doubling. Full year consolidated revenue and AEBITDA benefited from the $44 million VAT recovery in gaming while the prior year consolidated AEBITDA includes inventory and credit loss charges of $102 million.
We generated $685 million in combined net cash flow from operations in 2021 and $443 million of free cash flow on a combined basis more than double the cash we generated last year, translating to a free cash flow conversion rate of 33%. We continue to make great progress deleveraging organically, reducing leverage by 4.3 turns or over 40% to 6.2x, down from 10.5x at the end of 2020.
Turning to the business unit results. In Gaming, we continue to cement the turnaround in the business and the foundation for long-term growth and share gains as we achieved sequential growth across key metrics. Revenue in the quarter grew 30% year-over-year and 10% sequentially while AEBITDA increased 81% year-over-year and 8% sequentially.
On a full year basis, Gaming grew revenue by 43% and AEBITDA by 175%. Growth was positively impacted by the $44 million VAT recovery benefit this year, and the prior year was impacted by inventory and credit loss charges of $102 million.
In terms of driving efficiency, the business delivered 50% AEBITDA margin, both in the quarter and for the year. The VAT benefit impacted full year margin by 2%. We saw continued momentum in North America gaming operations with North American premium installed base growth of 14% in the quarter, exceeding 2019 levels both for the quarter and for the full year as our premium installed base hit an all-time high of 42% of our mix.
Growth was driven by performance of our great games, and we have a robust pipeline of game launches in the coming quarters. North American game sales continued to see strong demand with the successful launch of our Kascada cabinet driving year-over-year and sequential growth. Our North American replacement unit sales approached 2019 levels in the fourth quarter, further solidifying our successful turnaround progress.
Once again, content is at the center, fueling the success of our cabinet performance. Looking at Systems and Tables, we saw a 12% sequential rise in systems revenue driven by strong iVIEW harbor sales and increased connected EGM and a 15% sequential rise in tables revenue, benefiting from our market-leading position and the continued recovery.
While we are seeing strong demand for our products, we continue to navigate the supply chain environment, which remains dynamic noting that the impact has principally been limited to the timing of deliveries. Looking ahead, we feel great about our Gaming business and how it is set up for long-term success.
Turning to iGaming performance. The fourth quarter was the seventh consecutive quarter we more than doubled our [ U.S.A. ] gaming revenue, growing 112% from the last year and 6% sequentially. Overall, the business grew year-over-year revenue 15% and AEBITDA 25%. While for the full year, revenue was up 18% and AEBITDA was up 29%.
iGaming continues to expand its content offering, growing the number of land-based and digital native new game launches this year and is expected to launch live dealer in Q4. With our iGaming platform and leading PAM, iGaming participates in multiple parts of the value chain and is set up for outsize success as the marketplace continues to expand.
Now turning to SciPlay's performance. The business delivered strong year-over-year and sequential growth, both the top and bottom line in the fourth quarter. For the year, we delivered record revenue of $606 million, up 4% year-over-year. SciPlay's core business has real momentum with improved key metrics, including payer conversion hitting an all-time high of 8.9% and strong average monthly revenue per paying user.
AEBITDA was $186 million for the year, as SciPlay continues to invest in talent and capabilities to evolve into a diversified game developer. This business is highly cash generative, with operating cash flow of $38 million in the fourth quarter and $164 million for the full year.
Building on Barry's comments on the Alictus announcement, the acquisition checked all the boxes strategically and financially for us. It is a capital-efficient transaction that furthers our casual strategy, diversifies our revenues while minimizing risk with the earnout structure.
Finally, I'm excited to speak to you about our balance sheet and cash flow. We made significant progress deleveraging organically, ending the year with a total debt of $8.7 billion, net debt of $8.2 billion and net leverage of 6.2x, a 40% reduction from net leverage at 10.5x at the beginning of the year. And we ended the quarter with $1.4 billion of available liquidity. In the fourth quarter, we paid down $145 million of debt, which brings total 2021 debt repayment to $577 million.
Now moving to our strong cash flow and our focus on driving value for our shareholders. We generated $226 million of combined operating cash flow in the quarter and $685 million for the year, driving $100 million of combined free cash flow in Q4 and $443 million for the year. This translates to a full year free cash flow conversion rate of 33% as we continue to focus on driving productivity to the bottom line.
Cash flow was bolstered by the great strides we made improving DSOs, particularly at Gaming as well as the catch-up and collection from COVID-related accounts receivables.
As we look ahead, we see a number of positive trends in the business this year. With a healthy balance sheet in our near future, we will scale our investment in line with increasing customer demand and build additional flexibility into our global supply chain.
With the swift progress we are making on closing the divestiture, in the near term, we will incur one-off transaction costs that will temper our first half cash flow. As we substantially reduced our debt, we will materially lower our interest expense, providing significant benefits to cash flow in the back half of the year.
Before we take your questions, let me say that I'm really proud of all that we've accomplished. It is a testament to the caliber of the team and the speed at which they execute as well as our focus on operational excellence and our commitment to driving shareholder value. Thank you. Operator, we are ready to take your questions.
[Operator Instructions] Our first question is from Barry Jonas of Truist.
If I may, I'd like to ask my first question to Jamie and Toni. You and the team have orchestrated significant change since you joined Scientific Games. Management changes, sale of Lottery and Sports Betting and now rebranding. I guess the question is, is everything in place strategically at this point? And is it more a matter of execution here?
Barry, it's Jamie. Thanks for your question. Yes, I think largely, the strategy is now in place. And those key action is to rebalance the balance sheet and get strength to go forward are in place. We've put strong disciplines in place about this cash, as you all heard from all of the speakers during the presentation. So those disciplines are now fully understood by management. There's strong guidelines. And it means that we've now got a strong platform for growth, and that growth -- and cash generation.
What we're particularly pleased of is in the last 12 months, we've already seen early signs of great execution from this team. We've seen that focus. We have to become share takers. We have to get better product through our people. And those results, which Barry and Connie just talked about, will amplify the fact that we've already started that journey, but we now need to accelerate that as the new teams settle and technology comes in and we can start to grow further. But I think we're in a very strong position to go forward from here.
And as we mentioned during the commentary, we've vastly exceeded our expectations in terms of our ability to get cash for those great assets. And so that's actually accelerated our position even further than we thought originally.
Great. And a follow-up maybe for Barry or Connie, I guess. But look, it's very helpful to see the new net leverage target. I guess, can you give any color on how you landed on 2.5 to 3.5x?
Sure. Barry, thanks for your question. First of all, how great is it that we can actually have this conversation compared to where we were a year ago. Just amazing transformation, and we're really excited to be able to make the announcements that we did today.
Look, with the cash coming in with the divestitures and the operating cash that we generated, we've actually developed a framework on capital management, which is really simply this ranking order. Number one, to pay down debt to create a healthy balance sheet with a long-term range of 2.5 to 3.5x. Number two, beyond that, we -- the way we think about it, we always think about deploying our cash for the highest shareholder return on a per share basis. Obviously, given the upside that we see in our stock, we're delivering significant returns to shareholders with our announced $750 million buyback that we announced today.
Last, as we go forward, we're going to make disciplined investments both organically and inorganically to ensure that we can be sustainable and profitable over the long term. So to be clear, what that means is any M&A we pursue must outperform the hurdle of what that return would be to shareholders on a per share basis.
Connie, would you like to add?
Sure. Thanks, Barry, and very great to be with you today. As we really thought about the actual range, there are a couple of elements that came into play. The first was we clearly wanted to shift very quickly from a debt to an equity story, and that range really ticks the box growth there.
It's important also for us to have the financial flexibility to return capital to shareholders, as Barry just mentioned, and also to have the ability to invest for growth. Financial wherewithal, I think, is incredibly important as well as we just know that there is volatility within market. So we want to have a profile that allows us to see us through the good times and the challenging times.
We took some time to also just think about benchmarking our peers that both the land-based side of the competitive base as well as our digital peers. And the great news is, I think that we're aligned with industry standards. And importantly, what's really exciting for us is here very quickly with the proceeds coming in from Lottery and Sports, we're going to be squarely within that range.
So we're really thrilled with being able to provide you with more guidance on how we think about our net leverage range. And as Barry mentioned, it's pretty amazing to think about very quickly where we're going to be just to have the balance sheet that will truly act as an asset. Thank you.
I'll just add as well. [indiscernible] so I'd just add, I think we're also particularly thrilled about the timing of the lotteries closure, as we expect to -- as Barry said, that we expect that to close this month, subject to regulatory approvals. And that is, I guess, accelerating from where we originally thought.
Our next question is from Ryan Sigdahl of Craig-Hallum Capital.
Congrats on all the positive change. Curious, first question for maybe Jamie and Toni to start. I mean, on gaming ops, a lot of good things happening. I appreciate your remarks on this call as well. But what are you most excited about in the next, say, 12 months and the next 3 to 5 years, so do you think is most underappreciated by the market?
Thanks, Ryan. Ryan, it is very much about building Light & Wonder. It's delivering to our plans. We have -- I think we have a very clear strategy for growth and driving superior returns. And I think we're very well positioned on our journey today. We're still on a journey, and we're still at the front end of transforming this company. But I think we've got the right disciplines in place. And I think we've demonstrated both today.
We are well positioned in the collective markets that are worth more than $60 billion. We've got great IP and a streamlined organization, and that is very exciting. The fact that we are a much cleaner and more focused organization with a repaired balance sheet shortly. And the right disciplines in place on how we invest.
I'm excited about building our culture, and I'm very excited about the talent that exists in this business. What we had and what we've built over the last 18 months. I think the collective team is very strong. And our focus on developing and delivering great games across our distribution channels.
So definitely front end of the journey. But as the team have referenced, there are already great proof points. And our focus is late -- we're laser focused, I should say, on delivering this plan.
Great. Then maybe one for you, Connie, but great to see the buyback authorization be in a position for that and to see it authorized. Are you able to buy back shares prior to the Lottery and/or Sports Bet divestitures? Or do you have to wait for those to close?
Sure. Thanks, Ryan. Great to be with you today. First, I'd say that we're really excited to announce the share buyback program. We see tremendous value in terms of upside of where we are today in the organic growth profile we know we have here in the new future.
In terms of timing, to your question. We've actually been very proactive in looking at how we could manage some of our credit agreements. So we will now have the flexibility very quickly to go out into the market and be opportunistic about purchasing those shares. So we're really thrilled to have the opportunity to deliver shareholder returns. And importantly, we'll always do that in the context of having a healthy balance sheet.
Our next question is from David Katz of Jefferies.
First for Jamie and Toni. I -- this may seem unusual, but I first heard about you're getting involved with Sci Games very early in the process. And I'm wondering how this came together, what compelled you to get involved here because at that point in time, there was still what seemed like a mountain of work to do.
Yes. David, I guess I've been at -- from a [ risk cap ] of 2 or 3 years and Barry and I are going to know each other a little bit through various interactions. And I got to really understand that Barry wanted to take this business forward in a different direction. So that was the first thing. I joined as a consultant with Toni to really help that first time journey, working on strategy and me being a thought partner for Barry.
Then when the opportunity came from the MacAndrews & Forbes, as Toni says, we just seize that opportunity because we could see that this business was worth so much more than the sum of the parts. And frankly, we were just ready for another adventure and this is just a huge adventure. It's a great opportunity. These are a wonderful assets. And I'd say Lottery and Sports are great assets, too, but we just couldn't have that debt burden. So for us, we were, I think, swift to seize that opportunity with the value that could be created for shareholders. So we're encouraged that Barry saw exactly the same vision.
And he pressed it, if we knew where we are, we kind of got to the point where we were able to come strongly into the business as Chair and Vice Chair and take it forward. And we really feel the start we've had has been accelerated from our original views and has a long way to go.
Toni, your reflections?
Yes. From our perspective, I suppose, the assets was here, the IP was here, the talent was here but the business couldn't invest. And as we referenced in our previous comments, there had been a lot of leadership change. And so high leverage, leadership changes, not a clear strategy, yet great assets underlying the business.
I think also additionally, the changes required here really drew on our broad skill sets that we did learn in gaming but also bought from other industries prior to gaming. So we have had transformation experience. We've worked in multinational corporations and build high-performance cultures. We've expanded into new business segments and driven operating efficiency in our past experience, and we could see we could bring that talent here, that skill set here as well.
So it was -- we could see the gems. We could see that could be realigned. And as Jamie says, I think that the combined business today is worth more than the sum of the parts because of the ability to leverage content across those distribution channels. With every dollar we invest in one goes across to each of the other channels. So -- and again, great positions in iGaming, gaming and social.
Yes. I just want to add, this relationship that we developed with Barry, there's a lot of fun. We are in a games business. There's a lot of energy. There's a lot of fun that we are fully aligned on the journey. And frankly, during a pretty struggling couple of years for everybody to have the opportunity to do something so material with so many great people is quite extraordinary. So that was a compelling piece of the argument as well.
I appreciate that. Barry, if I can just follow up, and I'll -- I guess I'll only speak for myself. I understand what it takes to be successful, I believe, in the gaming machine business and iGaming as well. But if you could talk about the social piece of it and how you see the critical success factors there for it to achieve the vision that you've laid out.
Absolutely, David. First of all, it's actually fairly consistent, honestly, building great games that attract players, engage them is at the heart of, really, quite frankly, any gaming business, whether it's land-based gaming, whether it's iGaming or whether it's social.
The slight difference in the social business is they're live operating systems. And so you engage them with your core loop and then you build a meta game around them, but it still appeals to the player motivation, which is again, very consistent to how we develop and design and think about games in the gaming and iGaming space as well.
I think that SciPlay is, quite frankly, an important part of our strategy, and we partnered with them, great. They're at the heart of what we want to be, which is a game company. They add to our digital mix and ultimately, we want to build -- we're going to be the leading cross-platform global game company, and they want to build games that can be taken completely cross-platform as well.
We learn and we test together, we build and share IP. We coordinate launches to help maximize and their entry into casual is going to do nothing but help us. It's going to help us attack the $20 billion-plus casual space. It's going to broaden the audience that we can expose to our IP. And we're also very consistent in how we think about capital management. As we think about -- we lean in and look at organic and inorganic growth, we have the same views that we have to invest in things that have the hurdle of comparing it versus returning capital to shareholders.
So it's a different venue in the sense that it's free to play. But at the heart of it, people love to play games. And so it's very similar to what we do holistically at Sci Games.
Our next question is from Chad Beynon of Macquarie.
First, I just wanted to start with, I guess, it's a capital allocation question for everybody. With the share repurchase plan and I guess, the reduction of some sales multiples in the digital and the social space, how dynamic can you be? And how are you thinking about the best use of cash flow when -- post the Lottery transaction, you'll have a pretty chunky free cash flow yield, but then certainly if the multiples of some of these higher growth, hyper growth content business has come down, maybe it's a good time to kind of act on that and hit your goal of 50% digital? Just kind of a broad one there.
Perfect. I'm happy to take that one. And as we think about capital allocation, I think we're in a very privileged position, in fact. To the point that we're going to have a significant amount of proceeds coming in, which is going to allow us to very quickly delever. It's the heart of what we're trying to achieve, to your point, is to take a balanced and opportunistic approach.
With the proceeds again being able to quickly delever, we also know that we're going to have a business which will yield strong cash flows, which will allow us to also think about our share repurchase program and act swiftly in that space. And then also importantly, grow organically. I think when we think about investment, we're going to continue to scan the marketplace and see what might make sense when. But as Barry outlined before, we're going to have a very disciplined approach to how we think about deploying every dollar of capital.
But again, the great news is we're just going to have so much flexibility, not only from the proceeds coming in, but also with the organic cash flow that we're going to generate.
Yes. And I'd like to add in as well on the 50% -- I'd like to add in on the 50% digital. So the great news is we're in a great place now. We're at 40% today in terms of our digital mix, and we're very confident that we can achieve our target.
We have all the major pieces in place today. And our iGaming and SciPlay businesses are very well positioned and pointed at the $50 billion digital TAM. And each of them have great momentum in the space today. You've got iGaming with 112% year-over-year growth in the United States. You have SciPlay outperforming the market in social casino and now with some really strong shots on goal on casual, we've made some very strategic organic investments in content as well as our Las Vegas digital studio. And we've made some really smart targeted investments on the inorganic side with Lightning Box, Elk, Authentic moving us into the live dealer space as well as the recently announced Alictus.
So when we layer all that in, and then you think about our cross-platform approach will really help accelerate that. So we're in a really good position. We feel very confident about our ability to achieve that goal.
Appreciate it. And then on the iGaming business, understanding that a lot of it is going to be based on legislative approval, particularly in the United States and North America. How are you thinking about what a long-term goal could be for your content given how well your games are performing, particularly on your platforms?
And then also, as we think about a very unique platform that you have, the PAM, are there still lots of opportunities for that piece of the business to expand?
Yes, great question. So yes, first of all, we're obviously very excited about our position now as we sit in the iGaming space, as I just got through mentioning, we're basically a few states into it at this point. But with the current pace of regulation, we have a 112% year-over-year growth. And while we believe that obviously, it's going to -- the pace of the legislation is going to vary state by state, we think ultimately, it's inevitable that iGaming is going to be legal everywhere that gaming is and there's 2 major reasons.
Number one is that's what players want, that players want to play. They want to listen to their music, they want to bet and they want to do that in mobile. And second, where iGaming and sports are legal in the state, iGaming actually outperformed Sports Betting by 2 to 3x, which means 2 to 3x the state tax that's available to the state government.
So we believe those states are incentive. They want it as well. Obviously, we've got Ontario launching next week. We've just recently heard the New York iGaming bill that has been sent to legislature, and we believe there's 5 to 10 states possibly legalizing over the next few years.
So our focus is really building great content that's is going to continue us to continue to be the market leader everywhere a state goes live. And then as you say, continue to build our product portfolio by being the largest aggregator in the space, which we've done with OGS. And so the great thing is we participate in every part of the value chain today in iGaming. We have first-party content where you have the distribution platform. And then we have our PAM as well. And that gives us great insight into the small studios that are moving up and down the charts.
And we recently, as you just noted, we acquired Lightning Box and Elk. Lightning Box has been on board for 5 to 6 months now. They've had record GGRs every single month that has been a part of our platform. And Elk who's been on board a month now, achieved a record GGR as well. And we're going to be bringing them to the United States in the second half of this year.
So our playbook, we're going to continue to lean into our playbook. And we believe because we have that great view of OGS, we're going to continue to see great teams and great gains and leverage them, again, where it makes sense on a disciplined and financially rigorous basis to see if they make sense to complement our portfolio. But yes, we're extremely well positioned and looking forward to leading the iGaming space as it continues to go forward.
If I can, too, Barry, I might just fix in there. And just I think it's also worthy of noting that we're in a really privileged position with our #1 system, CMS and also with the #1 PAM in digital. And I think we have a really unique opportunity that as the businesses start to converge to create that 360 view of the players. So we're really also excited to lead in the space of also the platform segment, as iGaming expands. Thank you.
Thank you very much, and looking forward to the Investor Day in May.
Our next question is from Zach Silverberg of Berenberg.
Maybe one for Jamie and Toni, a follow-up on Chad's question. You guys stated a few times in the prepared remarks about the convergence of games is the future of gaming as a whole. Can you sort of just walk us through what that means strategically for Light & Wonder and how the convergence will help the firm achieve recurring revenues in a growing digital mix?
Yes. Zach, thanks. Absolutely. It's the way that players play these days is across multiple varieties. They like to play on the phone and then to play on screens and on their pads and then on proper gaming machines. So that's the way that they want to play.
And what we're going to do to facilitate that. Firstly, we have this leading position across social, iGaming and land-based as well, which is still unique at this point. And then it's to get the technology and the studios working together. So you need the technology, the processes and the platforms to allow basically instant realizations on games on these different platforms. So we got a new CTA joining us in September -- sorry, in July, I believe, who is really talented in that respect.
And then Rich Schneider, who took over our product is overseeing now working more closely with the other divisions and has ever happened in the past to really coordinate the road map. So we now look at our product road map as one, and Rich and his team do a portfolio of products, which will work across all platforms. And we're already seeing increasing examples of where games are being launched at the same time across platforms align all that extra dollar to come through and to get the extra excitement of playing the same games on the different platforms and giving players and customers optionality.
So for us, it's in inevitable that that's the way that play is going to go. And we're going to facilitate it with great IP, with great processes, great technology and content, which will be deliberately developed to make sure it can work easily across those platforms and just accelerate our ability to be on all of those streams at one time.
Barry, do you have any final thoughts?
Yes. That's exactly right. The only thing I would add is, first of all, that we look forward to sharing more about this at the Investor Day when we're going to invite out all of our business unit heads and Rich and the like to really dive into this in detail. So we're super excited about sharing more.
But as Jamie said, I think this is what makes us truly unique, being the leading platform of global games company. We're the only competitor today that is a leader across gaming, iGaming and social. And so from a gaming perspective, being able to launch a coordinated launch across all 3, leveraging the audiences and the power to maximize that franchise, to able to optimize our R&D so that we're putting all the wood behind the same franchises and being able to provide more bits to do testing and learning and the like across all of these so that we can, again, optimize our hits over our misses. All of this is in process now.
We've done a -- we've now tested with a couple of operators, which will share some results in our Investor, but we're seeing above-market returns on this approach. And then on the systems platform side, as Jamie highlighted, we're the #1 systems provider today with 50% market share, we're the #1 for digital PAM. So single authentication, recognizing the player wherever they are carrying their unified wallet with them, their loyalty points and being able to provide a seamless experience.
That's what people expect that when you're listening to Spotify, you expect them to know what your playlists are on your phone and on your laptop anywhere you go. That is what people expect when they're doing games -- gaming today, and we uniquely can provide that, and we're super excited about doing so.
Yes. All that enhances the player engagement. All of that increases the relationship that the player has and increases the number of hit games. We're still going to have native studios across these different platforms. We can see instantly on iGaming platform if a new game comes out and it's a winner, and that sells our team, hey, press proceed as soon as you possibly can to get it into your other platforms.
Got you. I appreciate the comprehensive answer. Maybe just a quick one for you, Barry. Can you just maybe give a high-level overview on what the labor market looks like and what it would take to sort of acquire high-level talent and retain that talent and labor appears constrained?
Absolutely. I think the #1 thing that we are focused on is having a high-performance culture that attracts the best talent in the space. We're very blessed to have some really great people here. And we've been able to -- with the -- with Jamie and Toni and the folks that we've brought on continue to attract A-level talent across the board in pretty much every discipline from our game designers to marketing, product management, you name it.
And the thing about when you build the right culture, people want -- they want to work there. And that is, by far and away, the best thing you can do is we focus on people, and we focus on products because that's the core of it. And so that's -- we -- it's our #1 priority, it's culture and building a great culture. And that's what we're so excited about our new brand name of Light & Wonder is having a name that is consistent with the atmosphere and environment that we want to create here.
Most of our M&A, and as we -- I think you mentioned inorganic, our inorganic has been today target is filling out products. But we ensure that the people in those organizations map to our culture, and we believe in the talent that is there. But the core of, I think, of winning in the space and the challenge that COVID has presented to all of us is really we remaining people-focused and culture focused.
Our next question is from Jeff Stantial of Stifel.
It's great to hear from you all and congrats again on all the success in transforming the business and driving value these past couple of years. My first question here is probably best suited either for Jamie or for Toni. Look, clearly, Australia is a key strategic focus for the slot business and a market where this team brings tremendous experience. I was just -- in that light, I was hoping you could talk a bit on what you see as the key drivers of success down there and some of the changes that you've helped oversee in order to begin taking ship share in a market that's really still dominated by our alma mater?
Thank you. Yes. Look, I think -- well, Australia is a great market. It's a great gaming market. And as the team reported, we've seen a good improvement in share there from 8% to 14%. And it really is coming through a redirected and reorganized games road map. It's the talent that we've expanded down there, investment that's coming into games. And we're starting to see that come through. So it is very much doing what we're saying we want to do across our portfolio, but with a focus on Australia.
We had our gaming CEO, who was down in Sydney a couple of weeks ago, [indiscernible] a few weeks and was able to work really with the [indiscernible] to get on the road map, and we're just very excited the way that team are now thinking about how they can get series of games out effectively. And we have underperformed in that market for a number of years and it's time to step up, and we believe we've structured correctly. We've got the right people and the right road map. And I think Matt came away from that with great confidence in our ability to continue to grow in the next few years.
Perfect. That's very encouraging. And then for my follow-up. Barry, I was hoping you could talk to the ongoing supply chain framework. And if you can work in, do you see any implications here from everything that's going on over in Russia and Ukraine, that would be helpful as well.
Sure. I might jump in and take that one, if that's okay. And thanks for the question. Similar to other industries is that we have felt some impacts regarding supply chain. However, they've really been small in nature. We're really fortunate that a couple of years ago, we spent time really building a global supply chain. That wasn't something that had really existed in Scientific Games previously and bolstered the talent. So we've been able to adapt and respond very quickly as things have changed.
The great news is, I think we're seeing strong demand for our products. And so the challenges that we might face are more timing than anything else. I think it's probably also just worthy highlighting that as we think about our portfolio now being 40% with a digital mix that isn't impacted by supply chain, that just helped create overall durability for our financial profile. So all in all, I think we're in good shape there.
And then just regarding the Ukraine. First of all, I'd say that our hearts go out to everybody there. It's a tragic situation that's unfolding. And we've got a handful of contractors and from a financial perspective, don't have any material impacts. But most importantly for us, it's just making sure that those that we partnered closely with are safe, and we'll continue to make sure we can do all we can to put them in the best scenario possible.
Our final question today is from John DeCree of CBRE Securities.
A lot of ground on iGaming so far, and I imagine more at the Analyst Day. So maybe an easy one on slots. We're paying attention to public casino operators, look to have elevated capital investment budgets this year, and it looked like there was a nice recovery in replacement demand in 4Q.
Barry, maybe if you have any thoughts on how confident you are will kind of migrate back to 2019 replacement levels. And if there's maybe some potential for catch-up spend from your kind of public casino -- commercial casino partners, given they've taken a little break during the particularly the early quarters of the pandemic.
John, I'll take that question. Firstly, we're really excited because this is the moment we've been waiting for with operators to open up their capital budgets, we've been spending the last 2 years really getting prepared to see this uplift. And we've now got products in all critical segments the Lock to being the Dual Screen Kascada as well as our stepper product, the Landmark that Barry spoke to in the prepared remarks, now essentially, we'll have a, again, a great cabinet with great content. So we're really optimistic.
I think as we think about it, we do expect to see kind of gaming capital cycles returning to more normalized levels here towards the back end of this year and then obviously a full recovery in '23. So again, it's great to hear that I think that the business is kind of open for -- opening back up, and we're very well positioned to take advantage of that.
Yes. And if I could, John, I would just add on to say part of it, obviously, is as you described, kind of a trend that we're seeing on the operator side. But I also have to tell you, I think our products are just really hitting the market. We view a tremendous success of Kascada, obviously, that you see with over 8,000 on the floor, Mural also with really strong momentum.
And as Connie said, we now have 4 new major cabinets across the big verticals and say, in the categories we want to be in. And Kascada Dual Screen is -- looks amazing. Landmark 7000 looks amazing. And there's just great games that back out -- back up each of these with from Dancing Drums, Ultimate Fire Link, WIZARD OF OZ, Gold Fish, Blazing 7s, some of our best franchises all lined up against these products. So it's just -- it's really great. So the combination of products and the market recovery is creating a lot of momentum.
Thanks, John. Let me turn it over to Barry for some final comments.
Great. Thanks so much. again, I just -- I want to just highlight one thing before we close up, which is, again, the -- we come off a really transformative year over the last 12 months. And we continue to -- as we generate cash from these divestitures and through our operating, we're really focused on disciplined capital management, which is, again, number one, priority to pay down our debt; number two, deploying our cash for the highest shareholder return on a per share basis with share buybacks; and then ultimately, executing wealth with organic and inorganic investment only where our returns are greater than the capital management opportunities that exist.
So again, thank you all for your time and support. You can probably tell that we're super excited about our journey that we've been over the last 12 months, and the position has put us in to achieve those excellent results going forward. Really appreciate you taking the time to hear about it and witness our progress.
I do want to just close by telling you that behind all these exciting numbers in this presentation is a group of people who have never been more dedicated to achieving great things. Our teams around the world are energized, enthusiastic about our strong performance and aligned around the new vision that we've outlined today.
We have a core business that continues to generate momentum, capital allocation priorities geared towards building an even more successful future, a fresh road map for delivering shareholder value going forward, revitalized passion for making great gains and a new name to cap it all off.
So look, we hope to see many of you at our upcoming Investor Day on May 17 in New York City, where we're going to have a lot more on this exciting new chapter in our story. Until then, on behalf of everyone at Light & Wonder, thank you for your time, and have a great rest of your day.
Thanks, everyone, for joining our call. I also want to thank Jamie and Toni for coming over and joining us for this. And I'll turn it back to the operator.
This concludes today's call. Thank you for joining. You may now disconnect.