Brightstar (NYSE: BRSL) trims revenue and EBITDA outlook but holds cash guidance

What happened

Brightstar Lottery PLC (NYSE: BRSL) lowered its 2026 revenue and Adjusted EBITDA outlook on Nov. 10. It held its cash from operations outlook.

Revenue is now expected at $2.44 billion to $2.46 billion, down from $2.50 billion to $2.55 billion. Adjusted EBITDA is expected at $1.14 billion to $1.16 billion, down from $1.16 billion to $1.19 billion. The company said the profit cut came mainly from updated currency assumptions.

The revenue cut reflects lower second-half same-store sales expectations, the timing of some Italy B2C expansion efforts and currency. The new outlook assumes a euro-dollar rate of 1.15 for the full year, against 1.17 before.

Key numbers

Metric	Latest	Change	Source
Q3 revenue	$607 million	from $629 million, -4%	SEC 6-K, Exhibit 99.1
Q3 Adjusted EBITDA	$289 million	from $294 million, -2%	SEC 6-K, Exhibit 99.1
Nine-month Adjusted EBITDA	$861 million	from $818 million, +5%	SEC 6-K, Exhibit 99.1
FY26 revenue outlook (prior: $2.50 – $2.55 billion)	$2.435 – $2.46 billion		SEC 6-K, Exhibit 99.1
FY26 Adjusted EBITDA outlook (prior: $1.16 – $1.19 billion)	$1.14 – $1.16 billion		SEC 6-K, Exhibit 99.1
Net debt (prior column: Dec. 31, 2025)	$3.84 billion	from $2.72 billion	SEC 6-K, Exhibit 99.1

Read more: Brightstar Lottery (BRSL) company research

Why it matters

The cut is modest next to a profit line that is still growing. Adjusted EBITDA for the first nine months was $861 million, up 5% from $818 million in 2025. The company credits higher product sales, better margin mix, more other service revenue and OPtiMa-driven cost efficiencies.

Revenue is weaker. Nine-month revenue was $1.78 billion, down 4% from $1.84 billion. Higher service revenue amortization and the UK contract transition more than offset gains in product sales and other service revenue.

OptimistFi has argued that Brightstar is durable if lottery contracts stay sticky and cash conversion normalizes. It is hard to underwrite until leverage and 2025's cash-flow break are explained. A positive operating cash quarter and in-range leverage help that view. A lower outlook and higher net debt keep it open.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

Where the third quarter slipped

Third-quarter revenue fell 4% to $607 million from $629 million a year earlier. Amortization of upfront license fees, which reduces service revenue, was $99 million versus $53 million. The company ties the rise to the new Italy Lotto license. Same-store sales at constant currency fell 3.9% globally, against growth of 7.9% a year earlier. U.S. multi-state jackpot wagers were down 30.6%.

Product sales offset part of the drop at $60 million versus $25 million. Adjusted EBITDA slipped 2% to $289 million from $294 million. Its margin rose to 47.5% from 46.7%.

Reported earnings fell harder. Income from continuing operations was $45 million versus $95 million. Diluted earnings per share were $0.12 versus $0.29. Adjusted EPS was $0.10 versus $0.36, which the company ties to non-cash service revenue amortization. Brightstar's share of that amortization, net of tax, rose from $23 million a year earlier.

Nine-month income from continuing operations rose to $164 million from $43 million. The company attributes that to the non-cash effect of euro-dollar moves on its debt, a better effective tax rate and a discrete tax item in the second quarter.

Cash, debt and payouts

Net debt was $3.84 billion at Sept. 30, up from $2.72 billion at Dec. 31, 2025. The company says the rise reflects the final Italy Lotto payment made this year. Total liquidity was $1.9 billion, including about $0.5 billion of unrestricted cash and $1.3 billion of undrawn credit facilities.

Third-quarter operating cash flow was $73 million, against an outflow of $445 million a year earlier. That period included a $579 million Italian Lotto license payment. Free cash flow was negative $8 million versus negative $509 million. For the nine months, operating cash flow was an outflow of $1.10 billion, against an inflow of $29 million in 2025.

The full-year cash outlook is unchanged. Net cash used in operating activities is expected at about $900 million, including the final Italy Lotto license payment. Cash from operations excluding that payment is expected at about $750 million. Capital expenditures are expected at about $450 million, against a prior $450 million to $475 million.

In September, Brightstar issued 500 million euros of 4.875% senior secured notes due September 2032. It used the proceeds to repurchase $393 million of its 2.375% notes due April 2028, pay issuance costs and repay $176 million drawn on revolving credit facilities.

The board declared a quarterly dividend of $0.23 per share, payable Dec. 8 to holders of record Nov. 24. Over $200 million went to dividends and share repurchases year-to-date through Nov. 9.

What's next

The next dated event is the Dec. 8 dividend payment. The bigger test is the fourth-quarter and full-year report. It will show whether revenue lands in the lowered range and whether the cash outlook holds.

The outlook assumes a euro-dollar rate of 1.12 in the fourth quarter. Delivery on revenue, Adjusted EBITDA and cash would support the view that the cut was about timing and currency. A miss on any of them would weaken the case.

More from OptimistFi

• BRSL stock: research and coverage of Brightstar Lottery
• Stock research on every company OptimistFi covers

From OptimistFi Perps