Key Highlights

  • Brightstar Lottery shares are trading down 5.93% at $9.67 versus a prior close of $10.28.
  • Adjusted Earnings Per Share were $0.10 versus $0.06 expected.
  • Revenue of $607 million missed the roughly $612 million estimate.
  • 2026 Revenue guidance fell to $2.435 billion to $2.455 billion.
  • Net Leverage stands at 3.3 times.

Brightstar Lottery (NYSE:BRSL) is trading down 5.93% at $9.67 after a third quarter that beat on adjusted earnings but missed on revenue and brought lower full-year guidance. The shares trade near their 52-week low of $9.10.

Results Mixed

Revenue was $607 million, with constant currency operational growth of 4% excluding a $46 million increase in non-cash Italy Lotto license amortization, up from about 1% in the first half. Year-to-date adjusted EBITDA rose 5% to $861 million, and Margin excluding amortization rose 50 basis points to about 41.5%.

Same-Store Sales Pressure

Same-store sales were pressured by tough multistate jackpot comparisons, with Powerball near $1.8 billion last year versus about $1 billion this year, plus an Italian summer heat wave and an October trucker strike. Mega Millions changes have underperformed at lower jackpots. U.S. instant sales were the second highest third quarter in five years, and iLottery maintained double-digit growth.

Guidance Cut

Full-year revenue guidance fell to $2.435 billion to $2.455 billion from $2.50 billion to $2.55 billion, and adjusted EBITDA guidance fell to $1.14 billion to $1.16 billion. Management cited currency, lower same-store sales and the timing of Italy business-to-customer efforts. Operating Cash Flow is unchanged at roughly $750 million excluding the $1.67 billion Lotto payment, and Capital spending is now $450 million. Fourth quarter margin is expected to be lower on product sales mix.

Balance Sheet and Dividend

In September the company issued EUR 500 million of senior secured notes due 2032 and used the proceeds principally to repurchase $342 million of notes due in 2028 and repay EUR 155 million of revolver borrowings. A $0.23 Dividend was declared. Net leverage of 3.3 times remains a focus.

Analyst View

Stifel cut its target to $18 from $19 and kept a Buy rating, calling the cut largely currency and one-time items. Four of five analysts are bullish, with an average target of $15.80 and a range of $11 to $19.

Jackpots and Italy Decide the Next Move

Fourth quarter operational growth is expected to hold at the third quarter rate, described as mid-single digits. Investors will watch whether jackpot sizes rebuild, whether Italy business-to-customer efforts gain traction and how leverage trends from 3.3 times.

Payment of the $1.67 billion Lotto fee and the next Quarterly Report are the markers.