BRSL

Brightstar Lottery PLC: Form 6-K Summary (Period Ended June 30, 2025)

Business Context and Reporting Period

This Form 6-K covers the three and six months ended June 30, 2025. In July 2025, the company changed its name from International Game Technology PLC to Brightstar Lottery PLC. The company operates as a pure-play global lottery provider. Financial results for the IGT Gaming business are reported as discontinued operations following the completion of its sale to a holding company owned by Apollo Global Management on July 1, 2025.

Key Financial Metrics

Note: Net income from continuing operations was negative due to significant foreign exchange losses ($99 million for Q2; $131 million for H1) and restructuring costs.

Material Changes vs. Prior Period

• Revenue: Total revenue for the six months ended June 30, 2025, decreased 5% ($60 million) compared to the prior year. This was driven by a $52 million reduction in Lottery Management Agreement (LMA) incentive revenues and a 41.2% drop in U.S. Multi-State Jackpot (MSJP) game sales due to lower jackpot sizes. These declines were partially offset by growth in instant ticket and draw-game sales in Italy (+1.4%) and the Rest of World (+6.8%).
• Profitability: Operating margin for continuing operations declined to 23% (from 31% in the prior year) due to the revenue mix shift and $21 million in restructuring expenses related to the "OPtiMa 3.0" cost optimization plan.
• Foreign Exchange: The company recorded a net foreign exchange loss of $131 million for the six months ended June 30, 2025, compared to a gain of $16 million in the prior year, primarily due to Euro/USD fluctuations on debt.
• Discontinued Operations: Income from discontinued operations (IGT Gaming) was $92 million for the six months ended June 30, 2025, compared to $13 million in the prior year, largely due to lower depreciation and amortization while assets were held for sale.

Guidance, Outlook, and Subsequent Events

• IGT Gaming Sale: The sale of IGT Gaming was completed on July 1, 2025. Proceeds are estimated at $4.1 billion to $4.2 billion. The company expects to recognize a gain on sale in Q3 2025.
• Use of Proceeds: Management plans to use $2.0 billion for debt reduction, $1.1 billion for shareholder returns (including a special dividend and share repurchases), $500 million for the Italy Lotto license, and $400 million for general corporate purposes.
• Shareholder Returns: A special cash dividend of $3.00 per share (approx. $609 million) was declared, payable July 29, 2025. A new $500 million share repurchase program was authorized.
• Italy Lotto License: On July 16, 2025, Brightstar was awarded the Italy Lotto License for a nine-year term starting December 1, 2025. The first installment of €500 million was paid in July 2025.
• Debt Reduction: Concurrent with the sale, the company redeemed $750 million of 2026 USD Notes and $879 million of 2026 Euro Notes, and prepaid portions of term loans and revolving credit facilities.

Investor Verification Checklist

• Gain on Sale Calculation: Verify the final gain on the IGT Gaming sale in the Q3 2025 filing, as the current estimate is subject to post-closing adjustments.
• Debt Covenants: Confirm compliance with debt covenants following the significant debt repayments and the new 2030 Facilities Agreement.
• Italy Lotto License Integration: Monitor the execution of the Italy Lotto license and the associated upfront fee payments.
• Foreign Exchange Exposure: Assess the impact of ongoing currency fluctuations on future earnings, given the significant FX losses in H1 2025.
• Restructuring Costs: Track the completion of Phase 2 of the OPtiMa 3.0 plan and the associated cash outflows.