Brightstar Lottery Q4 FY2025 earnings call

• Strengthened balance sheet, improved leverage. Secured Italy Lotto license. Introduced multiyear capital allocation strategy. Generated $2,500,000,000 revenue. Same-store sales grew nearly 4% Q4 and 2% year. Invested in teams, technology, processes. OPTIMA program delivered cost reductions. $1,100,000,000 EBITDA in FY2025 with 45% margin. Returned over $1,000,000,000 to shareholders. 2026 to invest in Italy digital expansion, US retail footprint, Sao Paulo lottery launch. Brightstar is largest and most advanced lottery operator/tech provider globally. Trades at valuation discount to peers.
• Q4 revenue up 3% driven by US multistate jackpot and iLottery. Full year revenue in line with prior year with benefits of instant ticket/draw games and favorable foreign currency rates. Adjusted EBITDA for full year, OPTIMA cost savings tracking to target. Cash from operations and free cash flow affected by Italy Lotto upfront license fee. Shareholder returns significant in 2025. Net debt improved, target leverage ratio mid-cycle at or below 3x. Liquidity over $3,000,000,000. 2026 revenue outlook $2,500,000,000 - $2,550,000,000, adjusted EBITDA $1,160,000,000 - $1,190,000,000. CapEx $450,000,000 - $475,000,000. 2028 targets: revenue ~$2,750,000,000, adjusted EBITDA ~$1,300,000,000.

Fourth quarter revenue was $668,000,000, up 3% from prior year. Full year 2025 revenue was $2,510,000,000. Q4 adjusted EBITDA was $304,000,000, up 5% from prior year. Full year adjusted EBITDA was $1,120,000,000. Cash from operations was negative $193,000,000 for full year 2025, or positive $733,000,000 before upfront license fee. Free cash flow was negative $509,000,000, or positive $417,000,000 when adjusting for upfront license fee. Italy Lotto license was secured. US multistate jackpot revenue rose, iLottery performed strongly. Same-store sales grew 0.5% in Q4 with increases across geographies when normalized for Italy Lotto ball rolls, offset by UK technology contract transition.

• 2026 revenue expected $2,500,000,000 - $2,550,000,000 including ~$175,000,000 incremental Lotto license fee amortization. Adjusted EBITDA forecast $1,160,000,000 - $1,190,000,000. Cash from operations expected negative $900,000,000, or positive $750,000,000 when adjusting for final Lotto license fee. CapEx $450,000,000 - $475,000,000. 2028 targets: revenue ~$2,750,000,000, adjusted EBITDA ~$1,300,000,000.
• 2025 actual results, 2026 outlook, and 2028 targets show on plan to achieve goals. Infer average $800,000,000 cash from operations in 2027 - 2028 excluding upfront license payment. CapEx expected to moderate to $200,000,000 - $225,000,000 annually post-2028 peak cycle, yielding over $400,000,000 annual free cash flow before or after license fees and after minority distributions.

Q: Jeff Stantial asked about Italy same-store sales and 2026 KPI shaping, and M&A and capital allocation.

A: Vincent Sadusky talked about Italy momentum, 2026 same-store sales led by US and rest of world with new product launches in Italy. Massimiliano Chiara said M&A is opportunistic in areas like digital, iLottery, B2C expansion. On capital allocation, they are disciplined, have significant commitments but continue to return cash to shareholders.

Q: Barry Jonas asked about Brazil opportunity and M&A implications.

A: Vincent Sadusky discussed Brazil opportunity, partnership with Scientific Games, long-term cash flow potential. On M&A, each company has own strategic direction, Brightstar focuses on strategic fit in digital, iLottery, B2C expansion areas.

Q: Domenico Ghilotti asked about Italy iGaming launch, tender for instant tickets, retail concessions, and 2026 growth guidance.

A: Vincent Sadusky talked about Italy digital opportunity, iLottery progress, scratch and win process. Massimiliano Chiara outlined building blocks of 2026 growth including core same-store sales, iLottery, LMA, Italy B2C, and product sales.

Q: Chad Beynon asked about US legislation on iLottery and AI in iLottery, and Mega Millions increase.

A: Vincent Sadusky said US has one or two jurisdictions a year implementing iLottery, focus on content engine and AI in game development. On Mega Millions, it's been slower than anticipated with changes, but committee is monitoring.

Q: Joe Stauff asked about Italian digital product offering.

A: Vincent Sadusky said Italy digital opportunity has potential to convert retail players to digital, provide iLottery, iCasino, sports betting in one app, with goal of best-in-class digital platform.