BRIGHTSTAR LOTTERY PLC REPORTS FIRST QUARTER 2026 RESULTS

Revenue up on strong Italy performance, positive U.S. sales mix, and foreign currency translation, partially offset by increased service revenue amortization and U.K. transitionIncome from continuing operations of $63 million; Adjusted EBITDA of $287 million rose 15%, or 5% at constant currency, on profit flow-through of higher revenue and operational disciplineContinued commitment to shareholder returns with over $70 million deployed in Q1'26 Strong balance sheet and credit profile; reaffirming 2026 revenue and profit outlook , /PRNewswire/ -- Brightstar Lottery PLC (NYSE:BRSL) ("Brightstar" or the "Company") today reported financial results for the first quarter ended March 31, 2026. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below. "We delivered a solid start to the year, with first-quarter results reflecting the strength of our global portfolio and disciplined execution against our strategic priorities," said Vince Sadusky, CEO of Brightstar. "We are investing in exciting long-term growth initiatives and returned over $70 million to shareholders in the period, demonstrating the confidence we have in the durability of our cash flows. We're on track with our multi-year goal of delivering accelerated sales and profit growth that we expect to create compelling, incremental value." "During the quarter, we continued to deliver OPtiMa cost savings while maintaining a disciplined approach to discretionary spend, carefully balancing cost control against strategic priorities, to sustain our profitable growth trajectory," said Max Chiara, CFO of Brightstar. "Our balance sheet and credit profile are strong with historically low net debt leverage and manageable near-term debt maturities. The Company's attractive margin structure and strong cash generation, coupled with access to significant liquidity, provide substantial support for our capital allocation plans." Overview of Consolidated First Quarter 2026 Results Quarter Ended Y/Y Change Constant Currency Change All amounts from continuing operations March 31, 2026 2025 ($ in millions, except per share data) GAAP Financials: Revenue 587 583 1 % (4 %) Income from continuing operations 63 8 NM Income from continuing operations margin 10.7 % 1.4 % Earnings per share - diluted $0.20 $(0.11) NA Net cash provided by operating activities 165 185 (10 %) Cash and cash equivalents 1,249 631 98 % Non-GAAP Financial Measures: Adjusted EBITDA 287 250 15 % 5 % Adjusted EBITDA margin 48.9 % 42.8 % Adjusted earnings per share - diluted $0.14 $0.09 57 % Free cash flow 55 109 (49 %) Net debt 2,752 5,047 (45 %) Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, and other disclosures regarding non-GAAP financial measures, are provided at the end of this news release Financial Highlights Revenue of $587 million, up 1% from $583 million the prior year, primarily driven by: 3.1% Italy same-store sales and positive mix in the U.S.Reduced LMA shortfall and higher pass-through revenueBenefit from foreign currency translationHigher service revenue amortization related to Italy Lotto licenseU.K. service contract transition Income from continuing operations was $63 million compared to $8 million in the prior-year period, primarily resulting from: Items listed as drivers of change in Adjusted EBITDA belowNon-cash impact of fluctuations in the EUR/USD exchange rate on debt balances at the ParentReduced provision for income taxes Adjusted EBITDA increased 15% to $287 million versus $250 million in the prior-year period, mainly due to: Key drivers of growth include:Profit flow-through of higher Italy same-store sales growthOPtiMa cost efficiencies and General & administrative expense recoveriesReduced LMA shortfallBenefit of foreign currency translationPartial offsets to growth include:Investments in growth initiativesU.K. service contract transitionHuman capital investments tied to retention, execution, and long-term valueInflationary pressures on postage & freight and other costs Diluted income per share from continuing operations was $0.20 compared to diluted loss per share from continuing operations of $0.11 in the prior year. Adjusted diluted earnings per share from continuing operations was $0.14 compared to adjusted diluted income per share from continuing operations of $0.09 in the prior year, primarily driven by higher income from continuing operations. Net debt was $2.8 billion compared to $2.7 billion at December 31, 2025. Net debt leverage was 2.4x. Cash and Liquidity Update Total liquidity was $2.8 billion as of March 31, 2026 with $1.2 billion in unrestricted cash and $1.6 billion in additional borrowing capacity from undrawn credit facilities. Other Developments The Company's Board of Directors declared a quarterly cash dividend of $0.23 per common share, with a record date of May 28, 2026 and a payment date of June 11, 2026. Final Italy Lotto license payment of €1.43 billion or $1.67 billion made in April 2026. Successfully refinanced revolving credit facility to March 2031, with improved terms, in April 2026. Financial Outlook Reaffirming FY'26 revenue and profit outlook: Revenue of $2.50 - $2.55 billionIncludes more than five percent organic growth; approximately $175 million in incremental Italy Lotto-related service revenue amortization impacts reported growthAdjusted EBITDA of $1.16 - $1.19 billion; revenue growth and OPtiMa savings more than offset approximately $50 million of investments in growth initiativesNet cash used in operating activities of approximately $900 million includes €1.43 billion or $1.67 billion related to final Italy Lotto license payment; approximately $750 million in cash from operations excluding Italy Lotto license paymentCapital expenditures of approximately $450 million - $475 million reflects contractual obligations related to recent contract wins and extensions Earnings Conference Call and Webcast May 12, 2026, at 8:00 a.m. EDT To register to participate in the conference call, or to listen to the live audio webcast, please visit the "Events Calendar" on Brightstar's Investor Relations website at www.brightstarlottery.com. A replay will be available on the website following the live event. Comparability of Results All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Amounts reported in millions are computed based on amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts. About Brightstar Lottery PLC Brightstar Lottery PLC (NYSE: BRSL) is a global leader in lottery focused on innovation and forward-thinking strategies and solutions, building on our renowned expertise in delivering secure technology and producing reliable, comprehensive solutions for our customers. As a premier pure play global lottery company, our best-in-class lottery operations, retail and digital solutions, and award-winning lottery games enable our customers to achieve their goals, entertain players and distribute meaningful benefits to communities. Brightstar has a well-established local presence and is a trusted partner to governments and regulators around the world, creating value by adhering to the highest standards of service, integrity, and responsibility. Brightstar serves nearly 90 lottery customers and their players on six continents. It is the primary technology provider to 26 of the 46 lottery jurisdictions in the U.S. and eight of the world's 10 largest lotteries. Brightstar has approximately 6,000 employees. For more information, please visit www.brightstarlottery.com. Cautionary Statement Regarding Forward-Looking Statements This release contains forward–looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward–looking statements include, but are not limited to, statements regarding Brightstar Lottery PLC's (the "Company") future financial and operating performance, strategic priorities and initiatives, business development, capital allocation, liquidity and leverage profile, contract opportunities, digital and iLottery expansion, product development, regulatory matters, and market opportunities. Forward–looking statements include, without limitation, statements regarding expected or reaffirmed FY'26 revenue, Adjusted EBITDA, cash from operations, capital expenditures, organic growth expectations, as well as assumptions underlying such guidance, anticipated product sales trends, expected benefits from OPtiMa cost–savings initiatives, anticipated investments in growth initiatives, expected timing and execution of launches and expansions (including the São Paulo launch), anticipated shareholder returns, refinancing activities, and pro forma leverage and liquidity metrics. Forward–looking statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "may," "will," "target," "project," "on track," "reaffirm," or similar expressions. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include, among others: changes in economic, competitive, regulatory, and political conditions; risks related to contract awards, renewals, and execution; reliance on regulatory approvals and timing; risks associated with digital execution, technology initiatives, and product development; inflationary pressures; interest rate and foreign exchange volatility; changes in consumer behavior; capital market conditions; and the risk factors described in the Company's most recent Annual Report on Form 20–F and other filings with the SEC. Forward–looking statements speak only as of the date they are made. Except as required by law, the Company undertakes no obligation to update or revise any forward–looking statements, whether as a result of new information, future events, or otherwise. Nothing in this release constitutes a profit forecast or should be relied upon as a guarantee of future performance. Non-GAAP Financial Measures Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional useful information, but it is not intended to, nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Adjusted EBIT represents net income (loss) from continuing operations (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other expenses (e.g., gains/losses on extinguishment and modifications of debt, etc.), net, impairment losses, restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. Management believes that Adjusted EBIT is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance. Adjusted EBIT margin represents Adjusted EBIT divided by revenue. Adjusted EBITDA represents net income (loss) from continuing operations (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other expenses (e.g., gains/losses on extinguishment and modifications of debt, etc.), net, depreciation, impairment losses, amortization (service revenue, purchase accounting, and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. Management believes that Adjusted EBITDA is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding the effects of foreign exchange, impairments, amortization from purchase accounting, discrete tax items, and other significant non-recurring adjustments that are not reflective of on-going operational activities (e.g., gains/losses on sale of business, gains/losses on extinguishment and modifications of debt, etc.). Adjusted EPS is calculated using diluted weighted-average number of shares outstanding, including the impact of any potentially dilutive common stock equivalents that are anti-dilutive to GAAP net income (loss) per share but dilutive to Adjusted EPS. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance. Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash equivalents, including cash and cash equivalents classified as held for sale. Cash and cash equivalents, including cash and cash equivalents held for sale, are subtracted from the GAAP measure because they could be used to reduce the Company's debt obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet. Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months prior to such date. Management believes that net debt leverage is a useful measure to assess Brightstar's financial strength and ability to incur incremental indebtedness when making key investment decisions. Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing Brightstar's ability to fund its activities, including debt service and distribution of earnings to shareholders. Constant currency is a non-GAAP adjustment to certain financial measures that expresses current financial data using the prior-year/period exchange rate (i.e., the exchange rate used in preparing the financial statements for the prior year). Management believes that constant currency is a useful measure to compare period-to-period results without regard to the impact of fluctuating foreign currency exchange rates. A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this release. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures. The Company provides guidance of select information related to its financial and operating performance, and such measures may differ from year to year. The guidance is only an estimate of what the Company believes is realizable as of the date of this release. Actual results may vary from the guidance and the variations may be material. The Company undertakes no intent or obligation to publicly update or revise any of these projections, whether as a result of new information, future events or otherwise, except as required by law. A reconciliation of the Company's forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure cannot be provided without unreasonable effort. This is due to the inherent difficulty of accurately forecasting the occurrence and financial impact of the adjusting items necessary for such a reconciliation to be prepared, for example, the provision for income taxes or net foreign exchange gain/loss, as such items have not yet occurred, are out of the Company's control, or cannot be reasonably predicted. Contact Mike DeAngelis, Corporate Communications, +1 (401) 392-1000, [email protected] Matteo Selva, Italian media inquiries, +39 366 6803635 James Hurley, Investor Relations, +1 (401) 392-7190 Select Performance and KPI data ($ in millions, unless otherwise noted) Constant Q1'26 Q1'25 Y/Y Currency Revenue Change Change(1) Service Instant ticket & draw wager-based revenue 537 500 7 % — % U.S. multi-state jackpot wager-based revenue 17 17 2 % 2 % Upfront license fee amortization (101) (48) 109 % 88 % Other 106 89 19 % 14 % Total service revenue 558 557 — % (5 %) Product sales 29 26 12 % 9 % Total revenue 587 583 1 % (4 %) Income from continuing operations 63 8 NM Adjusted EBIT 133 148 (10 %) (18 %) Adjusted EBITDA(1) 287 250 15 % 5 % Same-store sales growth (%) at constant currency (wager-based growth) (2) Global Instant ticket & draw games 1.2 % (0.1 %) U.S. multi-state jackpots (0.9 %) (46.1 %) Total 1.1 % (3.8 %) U.S. Instant ticket & draw games — % (1.3 %) U.S. multi-state jackpots (0.9 %) (46.1 %) Total — % (6.9 %) Italy Instant ticket & draw games 3.1 % (0.7 %) Rest of world Instant ticket & draw games 5.8 % 5.2 % (1) Non-GAAP measure; see disclaimer on page 4 and reconciliations to the most directly comparable GAAP measure in Appendix for further details (2) Same-store sales represents the change in wagers recorded in lottery jurisdictions where Brightstar is the operator or facilities management supplier, using the same lottery jurisdictions and perimeter for comparisons between periods Constant Q1'26 Q1'25 Y/Y Currency Change Change(1) Same-store revenue growth (%) at constant currency (Same-store sales inclusive of contract mix) (2) Global Instant ticket & draw games 3.0 % (0.7 %) U.S. multi-state jackpots 2.0 % (46.4 %) Total 3.0 % (3.3 %) U.S. Instant ticket & draw games 3.1 % (1.6 %) U.S. multi-state jackpots 2.0 % (46.4 %) Total 3.0 % (8.0 %) Italy Instant ticket & draw games 2.9 % (1.0 %) Rest of world Instant ticket & draw games 4.2 % 5.1 % Revenue (by geography) U.S. & Canada 281 259 9 % 9 % Italy 236 246 (4 %) (14 %) Rest of world 70 79 (11 %) (18 %) Total revenue 587 583 1 % (4 %) (1) Non-GAAP measure; see disclaimer on page 4 and reconciliations to the most directly comparable GAAP measure in Appendix for further details (2) Same-store revenue represents the change in same-store sales net of contract mix Brightstar Lottery PLC Condensed Consolidated Statements of Operations ($ and shares in millions, except per share amounts) Unaudited For the three months ended March 31, 2026 2025 Service revenue (includes amortization of upfront license fees) 558 557 Product sales 29 26 Total revenue 587 583 Cost of services (excluding Depreciation and amortization) 290 264 Cost of product sales (excluding Depreciation and amortization) 23 20 General and administrative 46 61 Research and development 14 11 Sales and marketing 34 33 Depreciation and amortization 53 54 Interest expense, net 43 46 Foreign exchange (gain) loss, net (12) 33 Other expense (income), net 4 6 Income before provision for income taxes 92 56 Provision for income taxes 29 48 Income from continuing operations 63 8 Less: Net income attributable to non-controlling interests from continuing operations 26 31 Net income (loss) from continuing operations attributable to Brightstar Lottery PLC 37 (23) Income from discontinued operations — 52 Less: Net income attributable to non-controlling interests from discontinued operations — 2 Net income from discontinued operations attributable to Brightstar Lottery PLC — 50 Net income 63 60 Net income attributable to non-controlling interests 26 33 Net income attributable to Brightstar Lottery PLC 37 27 Per Share Data Basic: Net income (loss) from continuing operations attributable to Brightstar Lottery PLC 0.20 (0.11) Diluted: Net income (loss) from continuing operations attributable to Brightstar Lottery PLC 0.20 (0.11) Basic: Net income attributable to Brightstar Lottery PLC 0.20 0.13 Diluted: Net income attributable to Brightstar Lottery PLC 0.20 0.13 Weighted-average Shares Outstanding Basic 186 202 Diluted 187 202 Brightstar Lottery PLC Condensed Consolidated Balance Sheets ($ in millions) Unaudited March 31, December 31, 2026 2025 Assets Current assets: Cash and cash equivalents 1,249 1,446 Restricted cash and cash equivalents 25 54 Trade and other receivables, net 561 526 Inventories, net 125 116 Other current assets 816 193 Total current assets 2,776 2,336 Systems, equipment and other assets related to contracts, net 707 678 Property, plant and equipment, net 89 90 Operating lease right-of-use assets 95 92 Goodwill 2,696 2,707 Intangible assets, net 124 125 Other non-current assets 2,977 3,130 Total non-current assets 6,688 6,822 Total assets 9,464 9,158 Liabilities and shareholders' equity Liabilities Current liabilities: Accounts payable 730 766 Current portion of long-term debt 229 118 Payable to ADM 1,644 1,680 Other current liabilities 544 508 Total current liabilities 3,147 3,072 Long-term debt, less current portion 3,778 4,060 Deferred income taxes 197 208 Operating lease liabilities 75 72 Other non-current liabilities 158 156 Total non-current liabilities 4,208 4,496 Total liabilities 7,356 7,568 Shareholders' Equity Brightstar Lottery PLC's shareholders' equity 848 875 Non-controlling interests 1,260 715 Total shareholders' equity 2,108 1,590 Total liabilities and shareholders' equity 9,464 9,158 Brightstar Lottery PLC Condensed Consolidated Statements of Cash Flows ($ in millions) Unaudited For the three months ended March 31, 2026 2025 Cash flows from operating activities Net income 63 60 Less: Income from discontinued operations, net of tax — 52 Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: Amortization of upfront license fees 101 48 Depreciation & amortization 53 54 Stock-based compensation 7 7 Deferred income taxes (6) (18) Foreign exchange (gain) loss, net (12) 33 Other non-cash items, net 2 6 Changes in operating assets and liabilities, excluding the effects of dispositions: Trade and other receivables (43) 51 Inventories (9) 1 Accounts payable (5) (39) Accrued interest payable (4) (25) Accrued income taxes 30 56 Other assets and liabilities (11) 2 Net cash provided by operating activities from continuing operations 165 185 Net cash provided by operating activities from discontinued operations — 55 Net cash provided by operating activities 165 240 Cash flows from investing activities Capital expenditures (110) (76) Other — (2) Net cash used in investing activities from continuing operations (110) (78) Net cash provided by (used in) investing activities from discontinued operations 24 (39) Net cash used in investing activities (86) (116) Cash flows from financing activities Proceeds from long-term debt — 540 Net repayments of Revolving Credit Facilities — (130) Net payments on financial liabilities (65) (77) Principal payments on long-term debt (117) (208) Repurchases of common stock (30) — Net (repayment of) funds payable and amounts due to others (30) (16) Dividends paid (42) (40) Dividends paid - non-controlling interests — (11) Return of capital - non-controlling interests (2) — Other (4) (19) Net cash (used in) provided by financing activities from continuing operations (292) 38 Net cash used in financing activities from discontinued operations — (133) Net cash used in financing activities (292) (95) Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents (212) 29 Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents (14) 19 Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period 1,500 775 Cash and cash equivalents and restricted cash and cash equivalents at the end of the period 1,274 823 Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations — 84 Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations 1,274 739 Supplemental disclosures of cash flow information for continuing operations: Interest paid 49 72 Income taxes paid 4 9 Brightstar Lottery PLC Net Debt ($ in millions) Unaudited March 31, December 31, 2026 2025 2.375% Senior Secured Euro Notes due April 2028 573 586 5.250% Senior Secured U.S. Dollar Notes due January 2029 747 747 4.250% Senior Secured Euro Notes due March 2030 569 581 5.750% Senior Secured U.S. Dollar Notes due January 2033 744 742 Senior Secured Notes 2,634 2,657 Euro Term Loan Facilities due January 2027 — 234 Euro Term Loan Facilities due September 2030 1,145 1,169 Revolving Credit Facility A due July 2027 — — Revolving Credit Facility B due July 2027 — — Long-term debt, less current portion 3,778 4,060 Euro Term Loan Facilities due January 2027 229 118 Current portion of long-term debt 229 118 Total debt 4,008 4,178 Less: Cash and cash equivalents 1,249 1,446 Less: Debt issuance costs, net - Revolving Credit Facility A due July 2027 3 4 Less: Debt issuance costs, net - Revolving Credit Facility B due July 2027 4 4 Net debt 2,752 2,723 Note: Net debt is a non-GAAP financial measure Brightstar Lottery PLC Reconciliation of Non-GAAP Financial Measures (Unaudited, $ in millions) For the three months ended March 31, 2026 2025 Income (loss) from continuing operations 63 8 Provision for income taxes 29 48 Interest expense, net 43 46 Foreign exchange (gain) loss, net (12) 33 Stock-based compensation 7 7 Other expense, net 4 6 Adjusted EBIT 133 148 Income (loss) from continuing operations 63 8 Provision for income taxes 29 48 Interest expense, net 43 46 Foreign exchange (gain) loss, net (12) 33 Depreciation 41 45 Amortization - service revenue(1) 101 48 Amortization - non-purchase accounting 10 7 Amortization - purchase accounting 1 2 Stock-based compensation 7 7 Other expense, net 4 6 Adjusted EBITDA 287 250 (1) Includes amortization of upfront license fees Cash flows from operating activities - continuing operations 165 185 Capital expenditures (110) (76) Free Cash Flow 55 109 Brightstar Lottery PLC Reconciliation of Non-GAAP Financial Measures (Unaudited) For the three months ended March 31, 2026 2025 Pre- Tax Impact Tax Impact(1) Net Impact Pre- Tax Impact Tax Impact(1) Net Impact Reported EPS from continuing operations attributable to Brightstar Lottery PLC - diluted 0.20 (0.11) Adjustments: Foreign exchange (gain) loss, net (0.07) — (0.07) 0.16 (0.02) 0.18 Amortization - purchase accounting 0.01 — 0.01 0.01 — 0.01 Other (non-recurring adjustments) — — — 0.01 — 0.01 Net adjustments (0.06) 0.20 Adjusted EPS from continuing operations attributable to Brightstar Lottery PLC - diluted 0.14 0.09 Reported effective tax rate 31.2 % 85.3 % Adjusted effective tax rate 36.4 % 47.8 % Adjusted EPS weighted average shares outstanding (in millions) 187 (2) 204 (2) (1) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction (2) Includes the dilutive impact of share-based payment awards View original content to download multimedia:https://www.prnewswire.com/news-releases/brightstar-lottery-plc-reports-first-quarter-2026-results-302768740.html SOURCE Brightstar Lottery PLC