Oliver Chow: Yeah. And just at a high level, over the next 12 months, we will realize some corporate cost synergies and it’s going to be primarily around the duplicative public company costs. But more importantly, I think you hit it, is it gives us access to the cash on SciPlay’s balance sheet, and couple that with just a highly cash generative business that they have, we’ll be able to then fuel other strategic initiatives over time. So yeah, we feel great about SciPlay’s ability to grow long term and we’re going to continue to invest in our core capabilities and yeah, we’re thrilled to have him back home with Light & Wonder.
Andrew Tam: Great. Thanks very much.
Operator: Thank you for your question. The next question comes from the line of Joe Stauff with Susquehanna. You may proceed.
Joseph Stauff: Thanks. Hey, Matt, Oliver. I wanted to ask about kind of the status of the North American game ops turnaround. Matt, I think you had some commentary, saying that in terms of, say the mix, the switch out, whatever the right terminology is to kind of get the right balance of premium into the installed base is coming to an end that you’ll be there in the near term. I guess what I wanted to ask is, what’s the right way possibly to think about upside for the revenue per day unit? What can that get to it? It’s kind of tough to estimate, but I was wondering like how much, say pricing power as — again, as you sort of hit that inflection point and what it can mean for the revenue per day.
Matt Wilson: Yeah. Great question. There’s a few things to unpack there. I think if you think about our gaming ops install base at the most macro level, there’s the US business and then there’s the international business. So then if you double click on the US business specifically, there’s kind of two component parts to that. There’s the premium gaming ops install base, which is the largest profit pool in the gaming industry anywhere in the world. And then you have these public markets, which is really the New York Lottery market, the Delaware Lottery market. So in the public markets, there has been a shift, there’s been since the new entrance that entered that market. So we’ve naturally had some of the install base eroded. We knew about that.
It was a moment in time when — via RFP some allotment was awarded. So that’s all factored into our long range plan. I guess the biggest thing we’re most excited about is that premium gaming operations install base. We’ve grown it for 13 consecutive quarters in a row now. We’ve just had a nice little tick up in Q3 in terms of net ads. So I think the economics that drive that premium gaming operations business are two things. Adding more premium units into the install base in great locations and then driving RPDs through great locations, but also better gains. And I think, you’re seeing sequentially those RPDs up, you’re seeing it year-over-year, those RPDs are up. So yeah, we think, we can continue to add more and more games over the coming quarters and as we introduce better games, the yield should go up as well.
So it’s a powerful combination driving that business. I know it’s in some ways distorted in the numbers because we kind of roll these things up collectively, but underlying that premium gaming ops install base and business at large is a lot of operating momentum. So we’re feeling good about that.
Oliver Chow: Yeah. And we also can — we continue to optimize our install base globally. So as we fine tune our legacy fleet, driving longevity on the floor for some of these units that will scale ROI for us in the long-term. So to your point, in North America, we do expect the public gaming removals to wind down here in the fourth quarter. And then internationally, we did have the removals in both Europe and Latin America. The LATAM removals relates to really one specific customer of approximately 2000 units, and we expect the European removals to also wind down here in the coming months. So moving forward, we do expect to grow share, and our RPDs in part due to just the continuous success of our great titles and content. So Frankenstein from Studio X as an example, but we’re definitely not going to stop there and we’re going to continue to capitalize just on the franchise extensions and new IP such as Squid game, as well as new cabinets like Horizon, which received really strong interest at G2E.
So overall we’ve made some really great progress in optimizing our install base and we view our increased investment in R&D and talent as an opportunity for us to go really on the offensive from a gaming operations perspective.
Joseph Stauff: Thanks a lot.
Operator: Thank you for your question. The next question comes from the line of Jeff Stantial with Stifel. You may proceed.
Jeff Stantial: Hi. Great. Thanks. Good afternoon, guys. Thanks for taking our questions. Starting off here. I want to hit on free cash flow conversion. It looks like headline was about 43% during the quarter, closer to 37%. If you strip out the impact of working capital long-term targets for 2025, if I recall correctly were 45%. So you do seem to be approaching that target quite rapidly. And I guess my question is, has anything changed incrementally that impacts those prior free cash flow conversion targets, whether positively or negatively or should we continue to expect to see kind of low to mid 40% type levels from here on, out of 2025 approaches? Thanks.
