- Revenue & Growth Generated $2.5B in revenue with 4% Q4 and 2% annual same-store sales growth.
- EBITDA Margin & Cash Flow Achieved $1.1B EBITDA (45% margin) and $417M free cash flow, exceeding guidance.
- Shareholder Returns Returned $1B to shareholders via dividends and buybacks, with 60% share repurchase completed.
- Debt Optimization Reduced net debt to $2.7B and leverage ratio to 2.4x, supporting disciplined capital allocation.
- Italy Digital Expansion Anticipates 1% 2026 revenue contribution from Italy B2C digital launch, targeting 3pp iLottery market share growth.
Operational Highlights
The company's OPTIMA program delivered cost reductions, enabling funds to be reallocated to growth initiatives. Brightstar Lottery is well-positioned to realize the full value of its focused lottery platform, with durable cash flows and multiple growth catalysts underway. The company's current valuation discount versus peers presents a compelling opportunity for investors, as Vincent Sadusky highlighted the company's compelling plan for growth, driven by organic initiatives and a focus on digital expansion.
Growth Prospects
The company expects revenue of $2,500,000,000 to $2,550,000,000 in 2026, with adjusted EBITDA forecasted between $1,160,000,000 and $1,190,000,000. Analysts estimate next year's revenue growth at 2.5%. The company's iLottery business has seen steady growth, with one to two jurisdictions adopting the system annually. The Italy digital opportunity is seen as a significant growth opportunity, with the potential to convert retail sales into digital sales and increase iCasino play.
Valuation Metrics
With a P/E Ratio of 9.16, P/B Ratio of 3.2, and EV/EBITDA of 5.58, the company's valuation appears reasonable. The Dividend Yield is 27.84%, indicating a significant return for investors. The Net Debt / EBITDA ratio stands at 2.8, indicating a manageable debt burden. These metrics suggest that the company's current valuation discount versus peers may be attractive to investors.
Strategic Initiatives
The company is focusing on strategic opportunities and M&A, with an eye on assets that can enhance its business. Brightstar Lottery is opportunistic on M&A, particularly in areas where it can enhance growth faster and accelerate its plan. The company's capital allocation strategy includes accelerating shareholder returns with a 60% buyback and increasing the ordinary dividend.
Future Outlook
The company's growth rate is expected to come from a combination of core same-store sales, iLottery, LMA, and Italy B2C. The Brazil opportunity is significant, with a joint venture partnership with Scientific Games, and is expected to generate meaningful cash flow, although it will take time. The company's iLottery performance is expected to improve with the refinement of its game recommendation engine and enhancement of game development, leading to margin improvements as contracts mature and the company scales its infrastructure.