Brightstar has increased Q2 spending towards rightsizing its business after offloading its Gaming and Digital division and embarking on a new era under a new identity.
In a move to seal off any cracks resulting from this year’s restructuring from IGT to Brightstar, the company reportedly expanded its OPtiMA cost reduction program to $50m, with a $21m associated restructuring charge.
Revenue came at $631m and a 3% increase (Q2’ 24: $613m) for the quarter ending 30 June. Cash and cash equivalents stood at $1.3bn and a 250% YoY difference resulting from the $4bn of net cash proceeds obtained from the Gaming and Digital sale.
Of that, $2bn went to reducing debt, while $1.1bn will be returned to shareholders, with a special cash dividend to common shareholders at $3 per share, payable today, 29 July. This is in addition to a Board-authorised $500m share repurchase programme.
Vince Sadusky, CEO of Brightstar, said: “We achieved several important milestones over the last few months. We secured the Italy Lotto license through November 2034, closed the sale of our Gaming & Digital business for $4bn in cash, and announced plans to return significant capital to shareholders.
“With a singular focus on lottery and unmatched industry expertise, we are well positioned to create value for all stakeholders with our mission to elevate lotteries and inspire players around the world.”
Total liquidity at the end of June was $2.9bn, with $1.6bn in additional borrowing capacity from undrawn credit facilities.
Adjusted EBITDA was $275m (Q2’ 24: $290m) despite a backdrop of incremental business investments and elevated jackpot sales in the US, which led to lower operating income of $139m (Q2’ 24: $179m).
Same-store revenue growth across key geographies included US and Canada at $293m (Q2’ 24: $306m), Italy at $259m ($234m), and Rest of World at $79m ($72m).
In addition to the $4bn sale of Gaming and Digital to an Apollo Global Management holding company, other business highlights from the quarter saw Brightstar secure a nine-year lottery licence tenure in Italy, and an eight-year contract in Missouri.
Q2 revenue is adjusted for $53m amortization related to Italy Lotto upfront licence fees.
FY25 outlook includes Adjusted EBITDA of $1.1bn in line with previous expectations, $275m in net cash reflecting a $75m improvement on the previous outlook, and capital expenditures of around $375m.
Max Chiara, CFO of Brightstar, commented: “Our second quarter results reflect sustained global demand for instant ticket and draw games. We are investing in key initiatives to drive sustainable, long-term growth, while also delivering structural cost reductions to right-size the business.
“The Company’s attractive profit profile and strong, predictable cash flows support our balanced approach to capital allocation.”