Brightstar Lottery Q1 FY2025 earnings call

• Core business: Instant and draw games account for 95% of wager-based revenue and 80% of total revenue. Global same-store sales up ~1.5% in Q1, with Italy up 2%, US stable, and iLottery up 26%.
• EBITDA: Delivered $250 million in EBITDA at 43% margin, converted 67% to cash, and maintained strong financial condition with pro forma net debt leverage below 3x.
• Innovation: Consistent innovation drives growth. Italy had new game launches like EUR 20 extra Tutto and EUR 10 instant tickets. US had new game launches in CA and FL, offset by lack in other states. iLottery sales up 26% with new e-instant game launches.
• Initiatives: Self-service vending machines in Italy, LotteryLink for in-lane purchasing, transitioning POS to cellular, new printing press expanding capacity by 50%, and investing in iLottery adoption with faster eInstant game development and cloud transition.
• Milestones: Italy Lotto license process ongoing, gaming and digital assets sale on track to close in Q3.

Instant ticket and draw games are the core of IGT's business, representing about 95% of annual wager-based revenue and nearly 80% of total revenue. Global same-store sales for instant and draw games rose nearly 1.5% in Q1. Italy had 2% normalized same-store sales growth, US had stable normalized same-store sales, and iLottery sales increased 26%. EBITDA was $250 million at a 43% margin in the period, with pro forma net debt leverage below 3x.

• Full year 2025 revenue expected to be approximately $2.55 billion and adjusted EBITDA $1.1 billion (low end of prior outlook).
• Q2 2025 revenue expected to be flat to slight up, adjusted EBITDA forecasted to be down approximately $30 million due to LMA incentives and investments.
• Q2-Q4 2025 EBITDA expected to be in line with prior year as jackpots normalize and Mega Millions $5 shift impacts.

• Macro and geopolitical uncertainty, including tariffs, consumer confidence, and spending, which pose risks though lottery sales have historically been resilient during recessions.

Q: Jeff Stantial asked about guidance revision, macro environment impact, and sequential weakness.

A: Max Chiara said macro is fluid, volatility tied to jackpot performance; Vince Sadusky added quarter was impacted by prior year jackpot comparison and Italy lotto license process.

Q: Barry Jonas asked about Mega Millions $5 shift and Texas lottery renewal.

A: Vince Sadusky said Mega Millions transition was smooth, early to assess impact; Texas lottery renewal in legislative session with evaluation ongoing.

Q: Chad Beynon asked about margin, Mega Millions, and Texas.

A: Max Chiara explained margin impact from low jackpot performance, Mega Millions positive trend, and Texas renewal process.

Q: David Katz asked about Italy Lotto license process.

A: Vince Sadusky said technical evaluation complete, economic proposals opened May 19th, with preliminary award expected shortly after.

Q: Domenico Ghilotti asked about Italian market spending and debt.

A: Vince Sadusky said growth in Italian lottery alongside sports betting/iCasino; Max Chiara explained debt increase due to FX and EBITDA/working capital.

Q: Joe Stauff asked about Italy Lotto award weighting and Italian growth.

A: Vince Sadusky said economic weighting ~60%, technical ~40%; Italian growth from new products and iLottery sales.