Yet Another Value Podcast - $LNW: a slot machine oligopoly at half Aristocrat's multiple | Zack Buckley

Episode Date: July 24, 2026

Light & Wonder ($LNW) is one of three companies in the slot machine oligopoly, with 70%+ recurring revenue, and it trades at 7-8x EBITDA while Aristocrat, its closest peer and arguably its slower-growing twin, trades at roughly double that. Zach Buckley thinks the market is wrong on almost every count: the stock has traded like a SaaS chart on AI fears even though slot content has almost no AI exposure, the Street doesn't believe 2028 targets from a management team that already hit the last three-year guide it set, and the soft first half is a game-launch timing story (Aristocrat launched in H1, Light & Wonder's slate lands in H2), not share loss. Zach has sized this the largest he's ever sized anything, and you can hear it.I push back where I can: whether Caesars could ever build its own boxes (Zach: Marriott doesn't build elevators), why management is paying down debt to appease Australian shareholders instead of murdering the share count at these prices, what the Dragon Train settlement really cost them, and SciPlay's genuine AI risk. We also cover the move to a sole Australian listing, the Grover charitable-gaming acquisition at ~7.5x EBITDA, and what would actually break the thesis.This episode is sponsored by AlphaSense: https://alpha-sense.com/yavp. Most AI tools are very good at sounding right, but can you trace the answer back to the filing, the transcript, the exact passage that drove it? AlphaSense's AI platform is built for exactly that: over 500 million curated documents, from broker research and expert transcripts to filings and earnings calls, with every answer linked back to an exact, verifiable source. See it for yourself with a free trial at https://alpha-sense.com/yavp.Chapters:(00:00:05) Introducing Light & Wonder(00:03:09) Light & Wonder's transformation(00:05:57) Australian listing creates opportunity(00:08:36) Recurring revenue business model(00:09:39) Why game quality matters(00:11:45) Business quality meets valuation(00:13:31) Explaining Aristocrat's valuation premium(00:17:15) AI offers productivity upside(00:19:08) SciPlay faces greater AI risk(00:21:20) Barriers protect game development(00:23:56) Casinos avoid vertical integration(00:29:05) Why Australia made sense(00:30:25) Dragon Train litigation explained(00:32:14) Assessing lingering litigation impact(00:34:11) Why investors doubt targets(00:36:04) Short-termism drives investor skepticism(00:39:41) Balancing buybacks and deleveraging(00:42:39) Grover acquisition adds growth(00:43:55) Electronic pull tabs explained(00:47:14) What could break thesis(00:50:41) AI fears create opportunities(00:52:32) Zach summarizes investment thesisZach Buckley / Buckley Capital Partners: https://www.buckleycapitalpartners.com/Links:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

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Hello, and welcome to yet another value podcast. I'm your host, Andrew Walker. Today we've got a great one for you. It's my friend Zach Buckley on, you know, this is why I'm not a professional podcast here. I don't know if he's on for the third, fourth, or maybe it's the fifth time and he's qualifying for the exclusive yet another value podcast shirt. But Zach is on to talk about light and wonder. The ticker there is LNW.

It trades in Australia, not the U.S. So there's extra risk there. See the full disclaimer at the end of the podcast or in the show notes, wherever you want. But it is a really interesting one. It's kind of got something for everyone. Right? Do you want a cheap business? Boom, check.

Seven or eight times, EBDA, and there's not a lot of CapEx here. It's quite free cash flow heavy. Do you want share buybacks? Boom, check. Do you want catalyst?

Do you want a good business and oligopoly structure? Check, check, check. And Zex thought a lot about this. And especially turns the middle you can hear it. You can just feel the conviction and he's got confidence

and clarity of his thinking. I think it's going to come through. Oh, by the way, do you want to discount who its best peer who trades for like basically double the valuation? Check. So we've got all that. We're going to get there.

in one second, but first, a word from our sponsors. Today's podcast is sponsored by Alpha Sense. Here's something I've been thinking more and more about recently. Most AI tools are very good at sounding right. The summary is clean, but can you actually trace it back to the filing, the transcript, the specific passage that drove the answer, or are you just trusting the confidence of the output? For investors, that's not a minor concern. My biggest worry is that I'm going to ask AI something, and it's going to tell me something,

and I'm going to build an investment thesis on it, and then I'm going to find out, you know, six months later when I get smashed in the face, that my whole investment thesis was wrong because the AI said something that wasn't true, that I didn't verify, that I trusted and did not verify, and that I can't source. And it sounds minor now, but you know, you work with AI all day. It's easy for one thing to slip through and it's scary. So what's the solution? Well, AlphaCense is the AI platform built specifically for this. They own the content. Over 500 million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer links back to an exact verifiable source,

because the answer is only as good as what's underneath it. And with Alpha Sense, you know exactly what that is. See it for yourself. Try a free trial at Alpha-Sense.com slash YAVP. That's Alpha-Sense.com slash YAVP or see a link in the show notes. All right, hello. Welcome to get another value podcast. I'm your host, Andrew Walker. With me today, I'm happy to have on for I think the fourth time, Zach, I'm not sure. But my friend, Zach Buckley, Zach, how's it going? Hey, good. Thanks, thanks. much for having me on. Good to see you again. Super excited for today's topic. Super interesting one. Before you get there, disclaimer, remind everyone, nothing on this podcast. Investing

advice, there's disclaimers at the bottom of the, in the show notes, and at the end of this podcast. Always true, but we're going to be talking about a stock that is domiciled in Nevada. Used to be U.S. listed, but now it's fully Australian listed. So maybe some extra tax and stuff everybody should keep in mind and do their own research, all that sort of stuff. So, Zach, the company we want to talk about is Light and Wonder. Ticker there is LNW. It trades in Australia. Lots of corporate backgrounds talk about, lots of stuff to talk about going forward,

but I'll just talk to toss it over to you. What is Light Wonder? Why are they so interesting? Yeah, so Light and Wonder is focused on Slaw machines, but they're a conglomerate. So they're basically in oligopoly with IGT and Aristocrat. And they've been around a long time, and those three control the vast majority of the market.

I think the background is super important here. So aristocrat historically, was sort of the darling in the industry. They had a very successful, I would say, 2010 to 2020 timeframe. The stock was a multi-bagger over that timeframe. Now, what's interesting is, you know, Light and Wonder, I think, had the wrong strategy

for a period of time, right? They were over-levered. They weren't investing in game development. And so Aristocrat was able to really take share during that time frame. What was interesting is that a lot of the management team from Aristocrat ended up actually going to Light and Wonder. And so originally I was following Light and Wonder, but the two things that were holding me back was first, the management team I didn't think had the right strategy and they were ultimately losing Market Share to Aristocrat. And secondly, the business was too levered. Those two things changed. And that's when we got involved sort of after those two things changed. So Jamie O'Dell, the former CEO of Aristocrat, came over to Light and Wonder.

Tony also was the former CFO at Aristocrat came over to Light and Wander. And so you basically had the former CEO, former CFO come over. And then Matt Wilson, the current CEO, was brought over as well. And sort of he was like the, we'll say, so you had basically the strategic person in Jamie, you had the finance person in Tony. And then you have sort of the person to go out and execute in Matt. And so I think you really had a powerful team. They brought over about 50 executives from Aristocrat.

in totality. And so you just have this mass migration of talent essentially from aristocrat in the light wonder. And so you went from, again, sort of the wrong strategy to the right strategy. They also sold their lottery business and used that to de lever. So that was a huge part of me getting interested as well. Historically, I just thought it was more levered than I was comfortable investing in. And then they got the leverage down to roughly three times net that divot, which is a level I think is very comfortable, especially for a business that has, you know, 70% plus recurring revenue. And so combine that with it being, you know, under 10 times earnings today, you know, I think it's super attractive.

And maybe I'll just pause there. No, that's perfect. Maybe we could also talk through the most recent like 12 to 18 months because, you know, not to spoil the story, but they relist to Australia. And I think we'll be talking about that. And they also have a big settlement in the past six months. And if anybody pulls off the Australian stock price, you know, starts at 150 the year, pops to 180 right in mid-January.

And it's kind of come back down to. 110. So maybe if we start kind of talking that, it'll help set the frame for kind of the stock as it sits today. Yeah, absolutely. So yeah, our history with it, maybe just going back a little bit farther. So we initially invested in September 22. You know, we bought it around just in the low 40s, and this is all in US dollars, and ended up selling it about two years later, you know, sort of in the 80 to 100 range. So we had a really successful investment. We continued to follow it. And then on the announcement of the sole listing in Australia, the stock sold off pretty dramatically. So if you think about it, there's a ton of funds that just couldn't own it.

And so it's sold off from, again, I'm talking in USDA, about 100 USD to like the low 70s. And so we made it a meaningful position again. You know, that was temporary because you had force selling on the U.S. exchange with really no buying from Australia. And then that flipped. And so the stock very quickly rallied, you know, from kind of the low 70s USD to like 120. you know, USD, which would again be closer to like 180 Australian dollars. And so that was sort of after the litigation was settled in mid-January. Obviously, it's retraced a lot of those gains.

You know, it's come sort of all the way back down to sort of the high 70s USD, you know, which is around 110 Australian dollars. And I think it's super interesting here. I think what really has driven that primarily is like a mismatch and timing of game launches. So Aristocrat launched a bunch of new games in the first half of this year. Light and Wonder is launching a bunch of games in the second half of this year. And so market share and sort of short-term numbers can really fluctuate fairly significantly with game launches.

And so since you had a lot of game launches from Earth to crack in the first half without so much competing offering from Light Wonder. And then in the back half of this year, you have the opposite. We really think it's sort of a back-half-loaded guide, but we think that's appropriately so. No, that's perfect. And I do kick myself just because you mentioned the, they were listed U.S., they go to Australia.

And I remember a lot of people around me, like in the events where we're saying, hey, this is the perfect, uh, the perfect setup because there are a ton of US listed funds that just can't buy. They have to sell because it's going to Australia. And once it goes to Australia, there's a ton of Australian pension money that's going to be forced in. So you have like this forced sell into forced buy setup and it worked out so perfectly. And, you know, hindsight's 2020, but I'm like, that seems like something that would

have been up my alley. Why wasn't I just like all over this? Okay. So the business, you've got this oligoply, IGT, aristocrat. and Led and Wonder. These are selling people who are familiar with casinos, like you can think, hey, you're walking the casino floor. You see, I believe, ERISA has, if you see the monopoly slot machine, right?

That's Aristocrat, right? So they make the slot machine. And if I remember correctly, they're getting a percentage of revenue every time somebody's pulling in one of these boxes, right? A lot of them are least models. I'll pause there if you want to explain it. Yeah, I would say, yeah, the majority is the least model. And that's part of what makes it so attractive is this is a highly recurring revenue

business. So today, Light and Wonder is over 70% recurring revenue. And so, you know, a lot of that is driven by the sort of the game-op section, which is, again, sort of this least model. And so, yeah, very attractive model and gives a high degree of predictability and consistency across the business over time. So it is an oligopoly, but, you know, they are dealing with big players, right? I know there's a long tail of small casino players and stuff. But if you're U.S. and a lot of the business is North America, I mean, you're dealing with Caesars, Boyd, MGM, and one group I'm probably forgetting off the top of my head, right? So it's an oligopoly on kind of both sides.

So how are they competing? Like these are great businesses recurring revenue. You get a slot machine in there and or a slot machine in there. And it's going to last the payoff for that last for a long time. How are they kind of competing and why isn't this a race to Caesars and them saying, hey, well, I don't wonder bring your pricing down by another 1% or else we're going to go with the monopoly machine over there. Like why is, why are they getting such great economics, if that makes sense? Yeah.

I think there while there's only a few players out there, you know, those people. players are developing by far the best games over time. And so if you think about it, like, would you want to be negotiating with Grand Theft Auto, right? Like if, you know, there are games that people are just going to play significantly more than others. And so, like, you know, if you have Grand Theft Auto versus a no name, you know, first person shooter game or like, there's just no competition, right?

Like Grand Theft Auto has brand name. It has, you know, people that have been playing it for years. It has customer loyalty. It's obviously, like, a extremely well. develop game. And so again, it's not a perfect analogy, but like I compare it sort of to video game development. Light and Wonder has the right team in place that are developing the best games and are going to continually bring out the best games over time. And obviously, casino space is valuable and people are trying to maximize, you know, revenue per square foot, just like in retail.

And so having the best games out on the floor is what's going to maximize, you know, sort of the per square foot and negotiating and trying to get the best deal. And like, obviously there's big players on both sides. I'm sure there's plenty of negotiating. But ultimately, there's no need for like a race to the bottom because there's enough for both sides to be really happy. Yeah. No, that's kind of the beautiful thing.

And I've had a lot of people, it's funny because this appeals to, this type of business appeals to people all across the investing spectrum, right? If you want financial engineering, which is more where my mind tends to go, this is just such a beautiful, right? It's like, hey, you install the box. You get a percent of revenue, like completely recession, not completely recession resistant, but these are much more recession resistant than you think. Like, go look at what regional gaming did and the GFC and everything. It's much better than I think people think. You get a cut.

Inflation goes up. Your cuts even bigger. They're installed. You know, to go rip out the box and replace them. It's great. And you're negotiating against, hey, if you don't go with our box, sure, you can get something cheaper, but would you rather pay us 2% more of revenue or would you rather have a box that does 20% more revenue? So it's beautiful there. It's beautiful on the Modi business, the compounder, like, it's just got all sorts of things that are attracted to a bunch of different investors. Yeah, I totally agree. I mean, I think of it as you want a great business, which this clearly is, right,

high recurring revenue, high degree of predictability, high moat, very long growth profile. And I would say a very high degree of being able to predict years out. You know, I think those are all really valuable in terms like the business quality. I think you have a first class management team. And clearly they've done this before. They've done it extremely well in the past. You know, in fact, they did the best of sort of anyone in the industry. And so I think those are really, really attractive.

And then you need a great price, right? And that's usually harder to find in these situations, right? Historically, you know, Aristocrats been trading for around 14 times EBITDA and, you know, sort of in the ballpark of 20 to 25 times free cash flow, you know, light and wonders trading more in the like seven to eight times EBITDA range. And, you know, right now they're trading it like somewhere in the ballpark of like eight to nine times my estimate of free cash flow. So it's really, really attractive. Let's go there because this is a company. Again, I said financial engineering model.

They've published 2028 targets. We can debate where they land. But, you know, it's a pretty narrow band this year's estimates, 20128 targets. They are sell sides well below them, but it's not like hugely off. We talked about great business, huge cash flow. They're saying they're going to start buying back shares. They're trading for a big discount to risk ride. So I guess I just lump all that together and ask you, like, what is the market, what are you seeing that the market's missing or what is the market's concerned? Because, look, there's only three of these companies, right? So it's not like restaurants. There's 100 of them. You say, oh, well, Wendy's trades for 7X discount to Chipotle. And you're like, yeah, that's kind of apples to oranges. It's like,

hey, there's Aristot cat, there's Lidontra, there's IGT. Like, every sell side has going to have these comp. So why such the huge discrepancy? So I think the main thing to compare is just light and one and aristocrats. So I'm going to set aside IGT. I think, I think they should trade very close to parity over time. And I think the management team at Light and Wonder intends and really believes. I think Jamie really thinks they should trade at the same multiple over time. And I think he's right. I think these businesses are extremely similar.

I think that right now, aristocrat has this halo effect because it's been listed in Australia for a long time. There's a lot of investors that have done extremely well. And so it just sort of gets that benefit of having been there for a long time and sort of having rewarded investors. I think in Australia, some investors have to choose between, owning either aristocrat or Light and Wonder. And in some cases, they're choosing for now to own Aristocrat because they've seen the consistency

of the execution over, you know, 10 plus years. And Light and Wander is just a newer story. I look at it much differently. I think Light and Wander is growing faster than Aristocrat fairly significantly. And so if anything, in my opinion, should probably trade at least in parity, if not at a premium to where Aristocrat is because obviously growth is important. Growth drives valuations across multiple different industries. And the fact that Light and Wander is growing faster, like to me, it's shocking.

that it's trading at such a huge discount. And again, that's what I think the opportunity is, is you have, you know, light and wonder down very significantly year-to-date, aristocrats up, you know, slightly year-to-date. And on a multi-year basis, I think light and wonder is going to out sort of outperform them from a growth standpoint. And ultimately, you know, that's kind of my thesis in a nutshell, is catch up to being a parity with them, you know, to put round numbers on it. We think they could do at 13 and 14 and free cash flow per share. Again, this is USD, you know, by 2028. And that's just sort of taking their $2 billion ebids at target, I think they'll achieve that and then just using some, I think, reasonable numbers around

where, you know, Kappa's, interest expense and taxes will be. You know, we're getting to sort of in the ballpark of like a billion dollars of net income in 28 and sort of depending on what the share count is, depending on how many shares they bought back. That gets you just sort of at 13 to 15 to share range. And if it trades at aristocrats multiple, you know, we're talking about, somewhere in the ballpark of $280 stock, again, USD, and then maybe if it trades of 15, which I still think is undervalued, but more reasonable than where it is today.

And then, you know, we're talking more on like the 210 range. But either way, we're talking about several hundred percent upside and a very high IRA from here. You know, it's just a question of does this trade at 15 or 20 times? And I'm not sure, but I'm going to be happy either way. Look, I mean, it's hard to disagree. The company certainly agrees, you know, I was reading the Q1 call, and they start off and they say, hey, we're an omni-channel business with a strong structural remote,

content and R&D group engine that continues to compound, increasingly recurring revenue base. We're a durable, long-term growth engine. You look at that and you look at the numbers. Like, hey, you're getting it for seven times, I bet off. But let me try to ask a few different questions. If I, Light and Wonder, you know, they had the big pop when they settle the Dragon Train litigation. We can talk about that in a second. But if I just kind of ignore that big pop in January, Light and Wonder, last September's 150.

today they're 110. ERISA Krette last September is like 75 or 80. Today they're kind of 65 and they bottomed off 45 in March. They look a lot like SaaS charts, right? Where September is when the AI fears are picking up and March is where the AI fears are going crazy. And then everybody kind of rebounds a little bit. I think Leid Wonder probably hasn't had the rebound Aristocrat has, but they look a lot like SaaS charts.

And Leiden Wonder ends their Q1 earning call. They have a slide that says AI is both offense and defense for us. And they end by talking about AI. I'd love to just ask you about AI overall for Light and Wonder, because when I look at that, I'll go into the wrist in a second, but I'd love to just ask you how you kind of think about AI as it relates to Light and Wonder. Sure.

Yeah, look, I think they can get significantly higher productivity per employee from AI, especially around like game developments. And so I think there's the potential for them to actually either take costs out of the business or just get higher productivity, you know, either way, which I think can lead to higher margins. I think they'll lead towards higher productivity. And so I think that can potentially lead to higher margins for them over time. I think the only place that it's truly a risk is probably CyPlay.

So CyPlay is closer to being commodity. There's less barriers to entry there. And so where I think there's huge moat in terms of casino relationships, it's not like a random VC-funded competitor could just suddenly start going and selling slot machines to, you know, Caesars and some of these bigger groups. Whereas in Sideplay, you know, that is a little bit more realistic. Now, Sideplay has had its own issues that are sort of independent of AI. And so I don't actually think the recent sort of downtrend in Sideplay is really driven so

much by AI. I think it's more driven by sweepstakes. But I guess my point is, is I think they will be most likely in that beneficiary of AI. And so I think the fact that they've traded with SAS is completely unwarranted. And just for those who don't know, Sideplay, is their social? games. So if I'm remembering correctly, this is, you know, it's basically free slot machines on your phone, right? It's free slot play on your phone. And it sounds silly, but these things are like, I, there were Bloomberg articles on these. They can be crazy addictive to people. And there are people

who are spending like thousands of dollars on these free play social machines. You can correct me, I'm wrong, but that's the business. You're basically saying, hey, similar to any app store, the bearer's entry come down. There's not the security regulation. There's not the selling to Seizers and taking up a physical space regulation. So you probably just have an influx of competitors. Am I kind of thinking about that right on the CyPlay side? Yeah. And again, I don't think that's a risk or I don't think that's what's happening today, but I do think that's a risk in the future. I think that is the main risk that AI poses. But look, CyPlay is roughly 20% of EBITDA of the overall business. You know, we're talking about something that could be a small headwind over time. You know,

the point is like, CyPlay doesn't materially change the valuation. And like, you know, side place certainly not going away. It just may grow less or potentially, you know, decline slightly. And so it's not like the value of side place completely impaired. You know, maybe there's a small incremental value difference, but nothing worth justifying what the sell off, you know, both an aristocrat and late wonder was.

And sort of the fear, I think, was vastly overdone in both. So the only other AI risk I could see is like, you know, you're putting these boxes in and the way you're selling, the way you're getting a percent of revenue is you're basically going to Caesar's MGM or obviously there's global casinos, you're saying, hey, if you put our box in with monopoly or with, for these guys, they've got a Roman theme one. I can't remember what the names of the big game are, but you put this in because of the brand name, because they're better engineered, like you're going to increase your revenue by 20%.

I guess the risk, and this might just be me dreaming up risk in my head, right? but Caesar says, hey, we're paying these guys a lot of F and money, right? Like, they have a revenue share on the most profitable thing in our casino, the slot machines. What if we hired, like, we're Cesar's, we have 50 casinos across the U.S. What if we hired 10 really smart scientists, built our own boxes and had AI run the whole things, and AI can kind of like analyze them real time? I don't think that works for several reasons, but I guess I just proposed that risk to you. Like, that is the Sasser's, right?

And it kind of makes more sense that Cesar is who's focus on gaming to me. It's not like design and slot machine is the most crazy thing in the world. It kind of makes more sense to me that Seizers could build their own slot machine, SaaS with a dedicated team and have their own brands and everything they create, then say, Walmart coming and saying, hey, we're going to design our own payroll system and our own CRM and stuff. So what would kind of stop that risk from coming to play? Yeah, so I think it's important to think about the talent in the industry, right?

There are talented developers that are hard to get. and almost all of them are working for either aristocrat or light wonder. So one of the reasons why no one is really competing with them is because they have almost all the most talented individuals. So when you worry about competition, it's not like someone could just compete with them tomorrow, right? Someone would have to steal their team or steal a aristocrat's team, right?

We'll say poach one of the teams or groups of, you know, employees from either Light Wonder or Aristocrat. And then it would take them two years to develop those, right? It's not like you just poach a team and you have a game tomorrow, right? You poach a team and then you spend years developing games. And so it's just the way the industry works and the way game development works. You know, Caesars or whoever it would be would have to poach a team, invest in that team for years. And then hope that sort of the team was able to really put out great games over time.

But it's just a really challenging endeavor to do for an organization that's not built around developing games and already has teams iteratively working on game development constantly. So I think hopefully that explains it well, but I think that's what makes it so difficult for someone to replicate. No, that makes sense. The other thing I was thinking was, and again, maybe I'm too domestic focus and not thinking international, but I don't know if state regulators would love it. if like, you know, the Nevada state regulators, if Sears came to them and said, hey, we built our own team, we created our own thing, we're going to put our own boxes into our casino based on this. Like, it's kind of unproven. I think state regulators, maybe, maybe not. And also, if I was Seizers, you might be looking at saying, hey, you know, the world is kind of a crazy place

and you read about all these stories of guys figuring out like the craziest hacks into any new game that comes out and like ripping casinos off. I'm sure the casino. could monitor it closely, but do they really want to like roll out across a platform invest into this, build their own boxes and stuff and risk like, hey, the monetization is 5% below what we were getting with like what we know at Light and Wonder or there was some flaw in it and we were paying out 108% of what we were taking in or something. Casinos like they are literally given a license to print money. I'm a little suspect that they would take that risk and over a multi-year process.

Now, maybe I'm wrong because they are paying these guys a lot. Light and Wonder a lot of money, but it doesn't seem like the type of, that seems like a risk you and me take, not the house takes, if that makes sense. Yeah, I think there's a bunch of reasons why it's not done. I mean, I would just say, like, you know, Marriott doesn't build elevators, like Delta doesn't build airplanes. Like, it kind of be the same thing of like Caesar's trying to build slot machines. Like, it is a very specialized business, like the math, you know, the artists, the software engineers, the sound designers, like hardware engineers, the regulatory compliance experts, like you were mentioning. Like the economics also don't make sense. Like just obviously you're sort of splitting economics across a wide variety of properties

when you're light and wonder and aristocrat, you know, it's significantly smaller when you're at any individual operator. You'd also lose access to the best industry games, right? So you'd lose access to, you know, aristocrat like Buffalo is one of their most popular games. Light and Wonder, Huff and Puff is one of those popular games. So you would lose access to all of those games. I mean, I would honestly, if you put all of those together, it'd kind of be a disaster for the casino if you really think about it.

because there's conflicts of interest. Like they're really just focusing on what they're best at, and they're outsourcing something like slot machine development and manufacturing to the people that are best at it. I think it can be underreaded. I'm assuming, I could be wrong, I'm assuming you're not a slot machine player. I'm not a slot machine player.

I'm assuming most of the listeners here are not slot machine players because most listeners, not to judge, but they're very investing and math oriented. And it's hard if you're very investing in math oriented, hey, every time I put a dollar into this machine, I know it's worth 98 cents every time I pull. like that's very hard for people to do. But if you've talked to slot machine players,

like they're very specific, right? Like I look at them like, Monopoly versus Dragon Quest or whatever. Who cares, you know? But they're very specific. They want their monopoly game. Like some of them want to go to the exact same slot machine that they're always playing on and stuff.

And if you're Caesars and you say, hey, I'm going to say, you mentioned Huff and Puff. I'm going to take Huff and Puff and Puff out and I'm going to roll out my own thing. My old thing, I think it, you know, it's better economics, all this sort of stuff. And then you've got your best players they come and they want to go sit at their huff and puff and puff machine.

The huff and puff machines like they're like, it's easy to overlook that in a spreadsheet, but that's how you lose a lot of customers. You know, I could see a lot of turmoil that we weren't, we aren't thinking of even if we like designed the perfect game just because we're coming in, you don't have my huff and puff. You don't have my monopoly.

F it. I'm out. I'm going to, if it's Vegas, the casino across the street or if it's, you know, the regional casino, I'm not making this drive anymore. Yeah, totally.

Yeah. So I don't play slot machines to answer a question. My grandma actually did. So I did grow up. with like my grandma going and playing saw machine. So I always heard about it. And then I think by the time I was 18, you know, I was kind of thinking, why would I do this?

You know, it's like putting a dollar in and receiving less than a dollar out, obviously on average. So I've never, never been into it myself, but certainly I understand the appeal to people around the world. You know, I think, again, it's kind of just when you put everything together. Imagine Cesar started developing games tomorrow. Like, you know, they would take them two years. would lose all the slot machines that they have right now, right? So you would lose all the

slot machines that are, and so most of their customers would go elsewhere. And then two years from now, they'd have this huge risk that like, did they develop something that's actually useful or not? And it would still be very expensive to them because they were like developing it and spreading across sort of a lower number of properties and cost. And so yeah, in totality, it's, it's a huge risk that I don't think any of their major customers would ever really undertake. Just on the slot machines, it is funny because my mom and grandma, their favorite thing to do is to go together and play slot machines for as long as it kind of was my mom's birthday, and that's what they did.

But like, I've never had slot machine into it. But I know, I've been to Vegas, why, and it's people like, I'm not saying I'm here, like, I want to go to the craps table every day, but like once or twice a year, you put me at a craft table with $100 or $200. That's really fun, but it's the exact same thing as a slot machine, you know, it's just, it's funny how different appeals and everything, because the math is kind of the same. Moops. Go ahead.

On that note, for a second, I played poker professionally. So that's the only gambling I've ever done. And like I, you know, I made a living for about, you know, as sort of in between college and starting my phone, that's, that's sort of how I paid rent. And so that is skilled, right? Correct. Yeah, that's the only, that's the only gambling I've ever done was,

was the kind of one of the few games where you can actually win consistently over time. There are, there are, there's chance on any given hand, but they're skilled there, whereas the craft stable, as much as I like to imagine, you know, if I throw it up really high, I'm going to be able to call my landing. I think, uh, the odds suggest that's not exactly what's happening. Let's talk about the move to Australia. These guys moved to Australia. I can't remember exactly when Aristocrite obviously moves to Australia a few years earlier.

I'm reading, I think it was the shareholder meeting. I was reading. They were talking about their moves to Australia and how it had been successful. And they're like, look, we're still incorporated in Delaware. We've got this really unique structure that allows us for Australia. They say, hey, we think Australian investors are sophisticated. They know the gaming industry. They're familiar with it.

But it does just sort of jump out. I just thought it was interesting. We talked about the four selling. We talked about the force. I think it's interesting. interesting just alone because how many times you see a company with like a liquid U.S. stock market listing saying, hey, we want to get rid of this and go to Australia. And by the way, this is a company with the majority of their revenues are domestic. They're still incorporated

Nevada. Nevada is there. Why did they choose to do this? And let's talk about that a little bit. I mean, I think so firstly, Australia is a, is a heavily focused gaming market. Right. And so I think certainly that should be mentioned, you know, in them thinking about it. But I really think it comes down to aristocrat being listed there and getting a premium multiple. I think aristocrat has traded at a significant premium to them for a long period of time now. I think for a while it was justified. And I think they feel, and I certainly agree with them, that it's not justified anymore. And so I really think they were trying to converge that gap. They wanted to take advantage of, you know, the analysts that have been covering aristocrat for a long time. Obviously, there's plenty

of fund managers and investors in Australia that have been following an invest in Aristocrat. And so I really think they were just trying to help that gap converge. Obviously, that hasn't happened in the short term, but I still think the jury's out. And I really believe they'll execute sort of in the back half of this year. I think they'll execute relative to their 2028 plan. And so I think we really have to judge them on a little bit longer period of time to know whether or not that was the right decision or not. Let's quickly, I mentioned earlier, they pop mid-January of this year. They pop because they settled the drag and train litigation with Aristocrat. And I think they pay Ursulaat, like, 125 or 130 million.

And they're still realizing legacy litigation expenses from that. What is the dragging train litigation? What kind of happened there? Yeah, so basically you had obviously a ton of employees come over from aristocrats who Light Wonder. And one employee in particular, unfortunately, came over and brought information that, you know, was downloaded at Aristocrat and seems like it should not have been brought over to Lightlander.

And I think that was, you know, unknown to the management team at Lightlander. Wonder, you know, one of their main games was developed with some of that material. And so, unfortunately, you know, and understandably, aristocrat started litigating because of that. And ultimately, there was a settlement, you know, that came out of that. And so I think Light Wonder didn't really admit wrongdoing necessarily, but they did admit that some of the math from, you know, from aristocrat was used in that game. So I think it was like a small and we'll say partial admittance of guilt without sort of a full acknowledgement. But I think it's great that it's behind them. Obviously, it's unfortunate that it

happened. And it's unfortunate that they lost that game. But, you know, I think it's something that's sort of in the past. And unfortunately, in situations like these, I think that's something that can, you know, very infrequently, but occasionally happen. And so I think they handled it well and we can kind of move forward from it. So if we're talking right here, you know, late July, 2006, the Dragon Train settlement happens in mid-January. I think they pull the game. The litigation expenses are largely behind them at this point, obviously, because the settlement was in January. If we're just talking about going forward, I think that was one of their most popular games. So if I'm thinking about, you know, the next 12 months, where the, we're the economics of this

business going, how much is that kind of going to be a drag as you go through the next 12 months, like this game getting pulled? How do they replace it? And obviously, they've got, you mentioned it earlier. They've got a lot of wins and new units that are shipping the back of this year. But with Dragon Hut getting pulled, like, is there any lingering effects from that? that. Yeah, I think it'll be minimal. You know, I think certainly there was some modest impact from having to pull Dragon Train, but I don't think it's something that like I still think they're going to hit, you know, $2 billion of Vivida in 2028. I feel like that's a very reasonable target. I think the street is very skeptical of that. I mean, you can see where consensus assessments are

and they're clearly below that. You know, certainly it's not a guarantee, but where I get, I would say, confidence is, you know, they set a guide in 2022 for 2025. And keep in mind, Dragon and hurt them in 25 as well. It wasn't like it just hurt them, you know, 26 and beyond. And so they were able to essentially hit that guide, you know, almost to a T that they set in 2022 in, you know, 2025. And so people are extremely skeptical of this team, you know, having set a guide again now in 25 for 2028, where I think, you know, this is a team that has done this once before, right? They said a guide that was reasonable but conservative enough that they were able to hit it, even though they had some headwinds in that first three-year period.

And I would expect it to be the same now. It's certainly possible they'll experience some headwins, and they probably already have to some degree in this period 25 through 28. But I think they'll be able to hit, you know, that guy that they said despite those headwinds. And even if they, you know, even if they miss it modestly, I think they'll still be well ahead of where consensus is. Why is, I'm looking right now, you know, their EV is like 11 billion.

and you mentioned $2 billion EBITDA target. And that's USD just to make sure we're, yeah. Yeah, yeah. And being clear. If you're looking at the AUS line, I think the stock is trading 110 AUS and they're, they mentioned in the Q1 call. So that's why I said 1466 per share in AUS EPS is the minimum they're talking about for 2008.

So you're talking like, you know, 7X there in 2020. Why is the street so skeptical of these targets? I mean, honestly, so we've been, like I said, invested since 2022, and the street has always been skeptical at their targets. So, you know, if you look at where consensus was, you know, for 2025 in 22, no one believed that they would hit the 2025 guidance. And so it's interesting that they still are not getting credit, even though they've been executing for about four years now. But they're continuing to not get credit. I think what it really comes down to is people are just way too focused on the short term. You know, if they had a weak cue on, they're going to likely have an okay.

to weak Q2. And, you know, that's very understandable in the context of, you know, they just had launch timing dynamics that sort of short-term had an impact on sales. Obviously, you also had this dragon train litigation, which of course doesn't show well on them. But the reality is this team is executed extremely well over, you know, the last three or four years that they've been here. And certainly when they were at a aristocrat, a very similar team also executed extremely well. So this is a team with decades of experience now proving that they know how to execute and they can actually get relatives a plan. And so I have a high degree of confidence. They'll be able to continue to do that unless there's just some really large, unforeseen thing that comes out. But I think,

you know, my base case is they do $2 billion. You know, I'll be modestly disappointed. Maybe they do 1.9. You know, I would be very surprised if consensus sends up being correct. And I think that will just slowly sort of trend up over time. But I think investors in general are too focused on the very near term and not focused on the long term picture of like, this is a great business run by a team that knows how to execute. also knows how to, you know, put numbers out that are achievable that they can hit. You mentioned you've been following it since 2022. I mean, when you talk to people, because it just seems weird that people will be this skeptical to me, when you've talked to, whether it's sell side and their best you ever,

what are they saying on why they're skeptical or why they're skeptical of this guy and why they're kind of trading this at the discounted guidance? Yeah, I think it really comes down to, again, what I said. It's just that short-term focus, right? Okay. It'd be focused on the very near term. I mean, we just spoke to a sell side analyst last week about this. And, you know, her contention was just that stuff has been weak recently.

And investors are really focused on what's happened so far in 2026 and it's not impressive. And so I think that's just the wrong focus personally. And I think she understood that as well. I think she was just reflecting the investors that she speaks to and sort of the mentality out there. which is really just that right now in the very short term, aristocrat is outperforming Light Wonder. And again, that makes perfect sense because, I mean, it's like if you were comparing, you know, PlayStation and Nintendo, right?

And if PlayStation just launched, you know, a new console and Nintendo hadn't launched a new console in a year or two, of course PlayStation sales from like a market share standpoint are going to be better. And vice versa, if, you know, if Nintendo then is going to launch in the second half of this year, you know, obviously they're going to have a surge in sales off the back of that launch. And so it would be really, I think, the wrong way to look at it to be saying, oh, well, you know, Nintendo's losing its edge because sales are weak in the first half of this year. And like, this is clearly based off of just launching new games and that sort of driving sales over

time. And so it's really just a patience thing. And I don't think we're going to have to wait that long. I mean, I bought the shares in, you know, at 73, you know, again, USD in November. And like, I was selling some of that position at 120, literally like in January. So this, you know, this business tends to not stay cheap for that long. Like I've had two really successful runs with this, and I think this will be the third. And but this time, I know it the best.

I've been studying it for much longer. I've had a little bit more time to act. Like I didn't have that much time. And it was really only cheap for a short period of time. in November of last year. And so I've been able to, this is the largest I've ever sized it and sort of the most excited I've ever been about it. That is, I'm doing AI short clips and I'm going to have to tell the AI, like, that's such a,

it's such a great clip. And I'm going to send it over to you so you include it because that's just like, I can feel the conviction coming off you. I think that just, that will be the advertising for it. That was awesome. Let's go to, it's not going to be cheap for long, you said. Let's go to capital returns, right? Because these historically, they've been a pretty decent share repurchaseer.

And they're saying, hey, the share repurchases, they kind of, not pause, but it came down a lot in Q1. I think part of that is they're paying $125 million. But another part of that is they were at three and a half leverage. And you talked about, and I think they've said we were, they peaked at 10x leverage a few years ago. They're down to three and a half. Their target is two and a half to three and a half. They're going to buy back a lot of shares starting in Q2.

I think they bought back like a hundred million in Q2 has been what they've been guiding people to. And they say it's going to keep going from there. But they're all saying, look, we're going to get our leverage down to, I think they say they want to get it towards the two and a half range over the next couple years. So I'd love to talk to you about the capital allocation story, the share buyback story that pays so nicely with this kind of spreadsheet, hey, you've got a nice grower, huge cash flows and spread. I mean, that's just like, it breaks the spritory, right? You get kind of infinity returns when you start doing that versus, hey, these guys are saying we want to trend our leverage to the low end of our range. Like, it kind of looks to me, hey, you're really cheap. We've got history of

share re-purches, why not run this at three and a half times leverage and just like murder the share count or you're really cheap. So we'll talk to you about all aspects of capital allocation there. Yeah. So I think I definitely understand where they're coming from. And I also understand where you're coming from. So from my perspective, I think share repurchases are great use of capital. Right. Obviously, I think the shares are super cheap. But also like the difference from aristocrat, a lot of people believe is that aristocrat has lower leverage and therefore it has higher, even debtor-free cash conversion. And so obviously one way that you can get closer to aristocrat on those metrics is by paying down debt. And so while it may not be the best from like, you know, if you're paying down debt at

six or seven percent, that's not as good as buying a stock that I think is like a 30 percent IRA or better, sure, I 100 percent agree with that. But if the multiple goes up, you know, from, let's say my exit in 2028, you know, if it goes from 15 times earnings to 20 times earnings, you know, that five turns is a huge difference. And so even though you may not get the best, let's say, sort of per share value growth, you're going to get the best exit because you're getting a much higher exit multiple. And so I definitely empathize with their thought process and can definitely understand they're really just trying to get to the best, you know, stock price over time.

And I think part of that is playing to the Australian shareholder base who wants lower leverage and higher free cash flow conversion. That's exactly what I was going to ask. Because like, again, maybe I'm too U.S. focus. But if you're at 10x leverage, it's a different story. But in the U.S., for the most part, if you said, hey, this business has three turns of debt, this business has one turn of debt, they're the same business otherwise, which business is going to trade for a higher EBITDA multiple. It's actually the three-x EBITDA business because they're going to get benefit for the tax shield is basically what you get. And investors kind of like a little bit of that juice there.

But, you know, I've done a lot in the UK. And in the UK, investors puk every time they see leverage. And no matter how much you argue with them, once they get the leverage paid down, they always get a better multiple. So what you're saying is it might be a little bit of the remnants of the, a little bit of the Australian market. And they're kind of playing to the investor base that they're looking to get. So that makes sense.

Yeah. And again, I don't necessarily agree with the way the Australian shareholder base is thinking about it. But I can empathize with the management team of like their goal is just to get the highest share price. And so if the higher share price is doing something like paying down dead, I can empathize with how that makes sense. Let me ask you about the Grover business that they just bought. So this was a, I think they bought it for like 750 million. I remember that number correctly. Yeah. This is a charitable hall gaming business that's like officially licensed in five states and maybe like kind of licensed in 10 states. And it's growing like crazy. I don't know a lot about it because the last time I looked at it, I didn't have any notes.

But they bought it for like seven and a half times EBITs. It's growing really quickly. It's only in a handful of states and they're saying they think they could roll out nationwide. So what is it? Why is it growing so quickly and why were they able to buy it so cheaply? Yeah. So think of it as like different like veterans organizations like, you know, Elks Lodge, you know, American legions, like those type of places.

So that's typically where, where they are. And a lot of the charitable gaming will, you know, go to good causes, right? So it'll be a way of maybe like, the states and or, you know, the various like veterans associations and then obviously Grover are sort of sharing so in the pie of the winnings. So it goes to good causes in the same way the New York State lottery goes to good causes. Like it's, I mean, obviously someone's putting a dollar in and yes, some of that is going to schools, I think is where a lot of the lottery goes, but a lot of it is going to the company that's running it and, you know, it's maybe not

the most efficiently spend tax dollars. Am I kind of thinking about that, correct? Yeah, so it's going to like a variety of places. And, you know, there's a ton of different beneficiaries, I would say. But yes, in general, good causes. And then it's being split, of course, with the operator as well. Right. And so this is at charitable locations. You mentioned Alclaws.

So it tends to be at charitable locations that are in our organization. And it's just normal slot machines. And they're probably like, they're probably exempted from normal. You don't need a casino license. It's a charitable license. So you can put in a normal slot machine. Is that kind of how it's working? Very similar.

A lot of times they're called. like electronic pull tabs, which are slightly different than slot machines, but like same idea. The only difference is with a slot machine, like the slot machine is determining the outcome, whereas with like an electronic pull tab, you're kind of, there's a predetermined outcome. And so it's kind of like there's 10,000 tickets. You're going to get one of those 10,000 tickets, whereas a slot machine has a true random number generator. So for all intensive purposes for the audience, they're the same, but there are some nuances between the view. What's attractive about it is that it's high recurring revenue, right?

This is a business that is high recurring revenue over time. It's growing rapidly. There's a lot of growth opportunities for them. And I think it fits like very nicely into the light and wonder portfolio. And also, you know, increases the percentage of recurring revenue. So I think paying, you know, they paid like call it seven and a half times evita for a business that arguably is again of like similar quality to aristocrat, which aristocrat trades at like, you know, 14, 15 times. You know, I think that's really attractive. Now, again, all of Light and Wonder trades

at that at a discount to Aristocrat, not just Grover, but I think this was just like another very high, high quality business to be sort of in the Light Wonder portfolio. And again, the majority of their capital allocation is going to go towards hang down debt or share re purchases. You know, they've done very few acquisitions over time. And I think this one was a very sensible one. No, I mean, the reason I ask is because you said sensible.

I mean, you just look in, I'm just dumb dumb, who spent half a day looking at it, but you look at their Q1, results and you look at the slides like, hey, this grew units by 15%, almost 15% year over year, and it's in, you know, they've got the map of the U.S. and there's like three, five states that it's in. There's a couple more regulated markets and there's like, it could be allowed throughout the U.S. And you're like, man, they got a 15% growth. Ignore all the new markets that come on. 15% grower at seven and a half times, eight times EBITO, like, this was a fantastic deal.

And you just kind of figure, how did they get it so cheaply? And I know they said they were the natural owner. And I think you mentioned, hey, maybe they can repurpose legacy boxes or maybe there's some duplication of R&D where Grover no longer needs to come up with their own games. They can just borrow the Light and Wonder portfolio. So you start looking all that and you're like, man, this is, it was a hell of an acquisition. Like, how did it go so cheaply is kind of what you're looking at? Yeah, I agree. No, I definitely think it was a great acquisition for them.

And I think they'll, you know, I think it'll pay off really well for them over time. I think it already has. But yeah, it's. Yeah, something I'm really excited for them about, and I think it diversifies them nicely. So let me wrap up with this question. All right. So we talked about, I have in my notes, this is a beautiful business, right? High recurring revenue.

It is related gambling, which has some cyclicality. But again, as I mentioned, I think if you look at slot machine revenue, like any individual casino can get crushed because the guy across the street. But if you look like through the global financial crisis, this isn't really down. Like people, this is their hobby gambling slot. So you've got a high recurring business. oligopoly, Salesforce, trading really cheaply, huge cash flow, good growth trends, all this sort of stuff. I think you've rebutted a lot of the bear points, a lot of stuff, which says, what keeps you up at night about buying this business at, you know, kind of seven to eight times EBIT? I have a great what keeps you up at night? What are you worried about? What would break this for you?

I think it would be really hard. And obviously that's, you know, that's why it's a big position for us. That's why I think we've had the most conviction now that we've ever had. I think if, you know, I think if, key management team members left, that would certainly give us pause. We definitely care a lot about management teams. It's really important now the right people in place, and we think the right people are in place here. You know, another thing is if the stock doubles, right? That'll change the eye on our profile.

That doesn't break the thesis, right? That's, hey, let's go take a ride on the yacht or whatever. But, yeah, you know, I think the only other thing that would be of concern is, you know, big macroeconomic downturns. But, you know, a lot of businesses get in, impacted by that. So for me, there's really, I would say very little company specific that I think would significantly surprise me. You know, I think the only thing I'm always on the watch for is is management changes. But aside from that, I don't think there's anything that would be outside of like a big macroeconomic shock that would really be able to derail those business, right?

It has the appropriate leverage. It's well diversified. It has an incredibly entrenched business with its customers. It's extremely valuable to its customers. You know, like, AI is not a concern of mine. I don't think that AI is a risk to this business. And I think the fact that it's trading with software businesses is an opportunity, not an actual real risk. And so we've spent a lot of time looking at businesses, you know, this year that have sold off, I think, inappropriately for AI reasons. And I think this is probably the best example of a company that really has very little, if any, AI risk over time. And yet it's really trading with a significant AI discount. What other businesses can you talk about that have sold off kind of inappropriately on AI risk?

Yeah, so we spent a lot of time in the payment sector this year. Okay. I know one of the ones you're long that has a take private offer. You don't have to disclose it if you don't want to. But payments, interesting. Okay. Yeah, and that I would even say. So Dave and Zessel were two investments that we spent a lot of time on this year.

They ended up both being extremely successful for us. Unfortunately, I don't think either one of them are cheap today. They're both up over 100% off the lows, but I was very, very excited about both of them sort of at the lows this year. And, you know, we made them both meaningful positions. And, you know, since unfortunately, I mean, fortunately and unfortunately because they worked, we ended up selling them because we just felt like the upside was relatively little at these prices and, you know, quite a bit more significant risk.

So I think the whole payments sector has been interesting now. I mean, we've looked at a bunch of different names. And I really spent a lot of times. on payments in the last 12 months. And so I think payments is a great example of an industry that's sold off sort of with the SaaSpocalypse that was largely inappropriate. You know, it's tough because I've spent some time on them. I mean, look, PayPal's got the offer.

I know this isn't directly the payment you're talking about. PayPal's got the offer from Stripe. You look at like a shift four that puts a lot of their cash flow towards buybacks, parr technologies, which I know a lot of our friends have looked at historically. It's tough because you look at all these things, you think, hey, they're really sticky, but things are going so fast and a lot of them are getting hit at the same time across, like, different verticals of whether it's payments or even SaaS. It's just like, it's hard and the things move fast, right?

Like, I think everything bottom in March and April and most of the stocks are plus 100% since then. Like, you have to pull the trigger pretty quickly on these to really get the bottom pricing. I don't know where I'm going with that, but yeah. Yeah, look, I think I would just say, I think there's plenty of names that are impacted from AI. and that impact is real. And I think there's plenty of names where people were sort of just shooting first and asking questions later.

They didn't fully understand the impact of AI and what it would be. They were just afraid to own something that might be impacted from AI. And so I think Light and Wonder is, again, one of the best examples of a name where I think that was the first leg down in the stock. You know, when the stock sold off sort of

in the February timeframe, I think that's what started it. And then I think it was just their Q1 results, right? Q1 was soft. And then there's something called Iler's data, so that's an industry data source. And like the Iler's data has been, I would say, modestly weak in Q2 thus far. And so there is some, you know, I think there's just too much short-termism in terms of the focus of the investor base.

And I think that will get rectified very quickly. And I think there will be a significant rebound in the stock when that happens. You know, as you say it in as and think through, it is one of the best kind of setups where everybody complains. And maybe because we're all just jealous, but everybody complains about that. the pod shop in the short-term mentality. But I do think one of the best setups you can have right now is, hey, the short-term data suggests weakness, but you actually understand the fundamental reasons for why the short-term data is weak. And like, you've identified it, right? The short-term data suggests weakness in that they're losing share to Aristocrat, but there is a reason. Aristocrat

launched to your Nintendo Play Store. All aristocrat launched in the first app, all the Light and Wonder launches are in the second half. So it's not that you're losing market share. It's that nobody's going to order your old thing. You know, Nintendo is about to release the switch two, nobody's ordering the switch one when the switch two comes off three weeks later. So you do have that natural pause. You're not losing market share. It's just like kind of delayed gratification is even the right word. It's just rational. But, uh, Zach, this has been great. Anything else people should be thinking about or anything else we should be talking about? I mean, I would just summarize and say, I think it's a very safe, stable,

predictable business that has a very long growth runway ahead of it that is not sensitive to AI or sort of going to be impacted by AI, run by the right management team. And you're buying it today around, you know, eight to nine times free cash flow. I think that free cash flow per share is going to grow at 15 to 20 percent plus clip over the next few years. And you also have a peer that has been around for a long time, has been very successful, you know, trades at a very high multiple, relatively speaking, as a result of that. And so I just think there's a high degree of probability of those converging over time. And so I think on the bottom end, if they don't converge, I still think you get sort of an IRA in line with free cash flow or share growth.

And more likely, you'll get a convergence to aristocrat and then you'll get a very high IRA. Perfect. All right, cool. Well, Zach Buckley, we're going to wrap it up there. This has been awesome. Thanks for coming on again. And we will chat soon.

All right. Thanks, man. Appreciate it. Nice to see you again. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor.

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