But given that uptick in leverage from a SciPlay from the SciPlay transaction, you may see us a bit more conservative in the near term with the share of purchase program. But make no mistake about it long term, we feel this is absolutely a significant value creation opportunity for us. So moving forward, we will continue to advance our other capital allocation priorities in a very disciplined manner. So you’ll see as we see business continue to grow, this creates additional capacity for further investments in R&D, talent, CapEx, which we believe will provide excellent returns for us down the road. And then after investing in these organic opportunities, in the context of a healthy balance sheet, we will then deploy any excess capital that we have in the most value creating way for our shareholders.
Whether that’s the share purchase program I mentioned earlier, additional debt reduction or just discipline accretive M&A. So we have significant optionality just given where we are from a cash flow perspective and balance sheet point of view. So yeah, we are well-positioned to drive sustainable growth into the future.
David Katz: Got it. Thank you very much.
Oliver Chow: Thanks David.
Operator: Thank you for your question. The next question comes from the line of Paul Mason with E&P.
Paul Mason: Hey, guys. Great results. This is on Australia. I just wanted to ask a bit about like, the performance there. You’ve had a couple of quarters in a row where you’re doing really, really well. And like — just wanted to ask like, how much do you think is that attributable to sort of the actions you guys have taken versus competitive environment or specifically like Dragon Train, which obviously you’ve said has been doing really well out the gates. Like, how would you sort of decompose of performance there?
Matt Wilson: I’m glad you asked this question, Paul. Yeah. I think, like all markets Australia, the gaming market is very darwinistic. They buy — operators buy the best games. And so over the last few quarters we’ve been able to put out some really credible titles in the Australian market. I think you know that the latest of which was Dragon Train. We showed you that at the AG show in August. And why we liked our chances with that product, given the caliber of talent that that was building it and the way the game was designed. You never really know until you get the players to vote with their dollars. And they are voting with their dollars in a pretty profound way. We have the top four games in New South Wales and the top four games in Queensland.
The two markets that we’ve live in, we’ve just got approval in Victoria. So I think Dragon Train is in the very, very early innings of what could be a multi-year opportunity for us. So yeah, very excited about that. For those Australian team members on the line, it’s been a long time coming. We’ve been a sub 10% player down there for a long time. We’re now in the mid-20%. We shipped 33% in September. So it’s just outstanding performance in the Australian market and we’ve come a long way, but like I always say, the best is yet to come.
Operator: Thank you for your question. [Operator Instructions] The next question comes from the line of Rohan Gallagher with Jarden. You may proceed.
Rohan Gallagher: Hey, Matt. Hey, Oliver. Good afternoon team LNW. I would like to focus on gaming, if I may. Outright sales, typically replacement demand. We’re looking at about 80,000 units a year, 20 share, 16,000 units for you guys, that’s 4,000 a quarter. First of all, Matt, is that sort of scalable and rateable? But second of all, adjacency opportunities. You’ve got the Canadian provinces, Oregon, Illinois, HHR. Can you sort of unpack what the potential opportunity that is for the next 12 months, please?
Matt Wilson: Yeah. Hey, Rohan. I think Siobhan Lane, our Gaming CEO, did a fantastic presentation in relation to the adjacencies at G2E, really kind of laying out what this opportunity looks like and it’s significant for us. We are just going back into these markets that we haven’t been in for a very long time. So by definition, every incremental unit that we sell in these adjacent markets is incremental share. So the biggest one that we’ve really kicked off with is OSL with a significant order there. But Oliver, you might want to just touch on kind of the makeup of those adjacent categories.
Oliver Chow: Yeah. To your point, we did sign that contract with OSL for just over 1100 units, and those units will be distributed over the next 12 months. In addition, we — our recent announcement on the entrance in the Georgia COAM market through our distributor Betsson, we also expect to enter that market in 2024. So we’ll have share expansion opportunities in other key adjacent markets such as Canada, VLT, HHR, and class two, class two markets. Lastly, what I would say is if you — if you were at G2E, you would’ve seen a very targeted section in our booth dedicated to our adjacent markets, which was very well received by our customers. And we’ll get a — we’re going to continue to invest R&D dollars to support this critical space. And the Gaming team has just done an incredible job of creating a strong product roadmap that will not only support the core class three growth, but then the proliferations into the adjacent markets.
