Brightstar saw a fall in revenue but returned to profit

Brightstar Lottery reported revenue of $584 million for the second quarter, down 7 per cent on the previous year. However, the company posted a profit of $56 million from continuing operations, compared with a loss a year ago. The fall in revenue is attributed to non-cash accounting charges relating to the Italian licence, rather than a decline in lottery activity itself.

A year ago, quarterly revenue stood at $631 million. Chief Executive Vince Sadusky described the profit as above expectations and attributed it to growth in like-for-like sales and cost discipline.

The missing $47 million in revenue

The main blow to reported revenue came from the amortisation of upfront licence fees. Over the quarter, this rose from $53 million to $100 million. This was due to the new licence for Italy Lotto and a change to the service contract in the UK. Neither of these items represents an actual outflow of cash during the quarter; they simply reflect the allocation of amounts already paid across the reporting periods.

Product sales also fell, from $42 million to $34 million. Overall, service revenue fell by 6 per cent, while total revenue fell by 7 per cent.

The core lottery business continues to grow

Revenue from instant tickets and draw-based games remained steady at $517 million. Revenue from multi-state jackpots in the US rose by 14 per cent in constant currency to reach $17 million.

Comparable sales of instant and draw games worldwide rose by 1.1 per cent. Including jackpots, growth stood at 1.5 per cent. In the US, jackpots rebounded sharply following a weak quarter last year.

The Italy payment drained cash but left the balance sheet intact

April brought the single largest expense of Brightstar’s year. The company sent the last instalment for the Italy Lotto licence, a payment of €1.43 billion, which equals $1.67 billion. That one transfer was enough to push both operating and free cash flow below zero for the quarter.

The cushion behind the payment held up. Brightstar closed June with $1.7 billion at its disposal. Unrestricted cash made up $0.6 billion of that figure, and undrawn credit lines added another $1.2 billion. Shareholders have not been forgotten either. Payouts since January have passed $140 million, and a fresh dividend of 23 cents per share is due to reach investors on 1 September 2026.

Annual forecast weathered a difficult quarter

Management left its full-year targets untouched. Brightstar still expects to earn between $2.50 billion and $2.55 billion in revenue this year and to grow organically by more than 5 per cent. The adjusted EBITDA range stays at $1.16 billion to $1.19 billion. Around $50 million will go into growth projects, and the cost savings generated by the OPtiMa programme are meant to absorb that spending.

The quarter demonstrated how major licensing deals distort a lottery operator’s financial statements. Revenue is falling on paper, even though players’ stakes are rising. The second half of the year will be a test for Brightstar, when write-offs in Italy become a familiar backdrop and growth in like-for-like sales should start to show through in the net figures.