Brightstar Lottery PLC

Second quarter revenue was $584 million as reported. Excluding the $47 million increase in service revenue amortization, revenue was flat year over year as reported, improving to 2% growth net of the U.K. transition. Adjusted EBITDA increased 4% to $286 million, with reported EBITDA margin nearly 49% and 42% excluding upfront license fee amortization. Income from operations was $56 million versus a loss of $60 million in Q2 last year, despite a $47 million service revenue amortization impact. Year-to-date adjusted EPS was $0.24 as reported, up 20% year over year, or $0.71 excluding service revenue amortization. For the first half, cash from operations was negative $1.17 billion including the final $1.7 billion Lotto license payment, or positive $501 million excluding that payment. Capex totaled $121 million in Q2 and $232 million in the first six months. Management reaffirmed full-year 2026 revenue, profit and cash flow outlook, expects Q3 organic revenue growth of about 4% year over year, and said Q3 adjusted EBITDA should be in line with the first two quarters and slightly down versus prior year.

Vince Sadusky framed the quarter as a proof point that Brightstar’s investments are beginning to pay off, citing better-than-expected profits, stronger same-store sales, and solid cost discipline. He emphasized growth in iLottery, Italy B2C, Sao Paulo, and retail/network upgrades, and said the heaviest investment period is largely behind the company. His tone was constructive and confident, with repeated references to an upcoming inflection in revenue, profit, and cash flow.

Max Chiara said Q2 revenue was in line with expectations and profit exceeded expectations, driven by same-store sales, OPtiMa savings, and expense recoveries despite the U.K. transition and ongoing investment. He highlighted a full-year effective tax rate in the mid- to high 30% range, cash taxes of around $150 million, net debt leverage of 3.24x, and $1.7 billion of total liquidity. He also noted $140 million returned to shareholders year-to-date, remaining buyback authorization of $175 million, and an upgraded OPtiMa 3.3 savings target of $100 million from the 2024 baseline, with $70 million expected by end-2026.

Analysts focused on Italy B2C ramp timing, the competitive environment for U.S. lottery and iLottery contracts, the path to more than $400 million of annual free cash flow, Mega Millions pricing, and share repurchases now that the Lotto payment is complete. Management said Italy’s digital initiative is still early but expects a 1% run-rate contribution in the second half and said customer additions and monthly active users are the key milestones. On competition, management said iLottery remains the most competitive area, but Brightstar still rates well technically and often loses on price rather than technology; on capital allocation, it said buybacks remain available within a balanced leverage target.