Brightstar Lottery reports Q3 revenue down 4% as net debt rises by 49%

Brightstar Lottery PLC has reported third-quarter 2026 revenue of $607 million, representing a 4% decline compared with the $629 million recorded during the corresponding period last year. The results, covering the three months ended September 30, show pressure on several financial indicators, including income from continuing operations and adjusted EBITDA. The company also reported a substantial year-on-year increase in net debt and revised its full-year financial expectations.

The financial update presents a mixed picture for the international lottery technology provider. Although revenue and quarterly income declined, Brightstar reported improvements in several operational areas, including retail hardware, software and instant ticket sales. Its Italian business-to-consumer operations also continued to show positive development.

Adjusted EBITDA reached $289 million, a 2% reduction from the $294 million reported in the third quarter of 2025. However, the adjusted EBITDA margin improved to 47.5%, compared with 46.7% a year earlier. This indicates that the company maintained a relatively strong margin despite the reduction in reported revenue.

Brightstar attributed the quarterly revenue performance to several factors affecting its international operations. Higher non-cash service revenue amortisation associated with the new Italy Lotto licence weighed on the reported figures. The company also identified the transition of a service contract in the United Kingdom and weaker performance from US multi-state jackpots as factors affecting revenue.

Higher licence amortisation weighs on reported revenue

The additional amortisation associated with the Italian lottery licence was an important factor in the quarterly comparison. Brightstar recorded $99 million in upfront service revenue amortisation during Q3 2026, compared with $53 million in the same period of 2025. This accounting impact affected the reported revenue figures even as the company continued to identify growth in several underlying business activities.

The revenue breakdown highlights the different trends across its operations. Product sales increased to $60 million from $25 million in the prior-year quarter, reflecting stronger demand for retail hardware, software and instant ticket products. Other service revenue also increased to $121 million from $109 million, supported primarily by software services connected with new contracts and extensions outside the United States and Italy.

However, service revenue overall declined by 9% to $547 million. Revenue from instant ticket and draw-based games decreased by 2%, while revenue associated with US multi-state jackpot games fell by 30%. Brightstar linked the weaker performance in this area to lower same-store sales and the performance of major jackpot games.

The company also highlighted the transition of its UK service contract and foreign currency movements as factors influencing the comparison. These developments demonstrate how contractual changes, accounting treatment and activity in individual lottery markets can affect consolidated financial results.

Income from continuing operations falls by 53%

One of the most significant changes in the quarterly figures was the decline in income from continuing operations. Brightstar reported income of $45 million, compared with $95 million in Q3 2025. This represented a year-on-year reduction of 53%.

The corresponding income margin also declined, moving from 15% in the prior-year period to 7.4% in the latest quarter. Brightstar attributed the lower income primarily to higher service revenue amortisation associated with the Italian Lotto licence and the factors affecting adjusted EBITDA. Increased net interest expense, mainly resulting from lower interest income, also contributed to the change.

The quarterly figures should be considered alongside the company's broader year-to-date performance. For the nine months ended September 30, 2026, income from continuing operations reached $164 million, compared with $43 million in the corresponding period of 2025. This improvement was partly influenced by foreign exchange movements on debt balances and a more favourable effective tax position.

Adjusted EBITDA for the first nine months also increased by 5% to $861 million, compared with $818 million in the previous year. Higher product sales, improved sales margins, increased other service revenue and cost efficiencies supported the improvement. These gains were partly offset by the UK contract transition and investments in growth initiatives.

Meanwhile, year-to-date revenue remained under pressure. Brightstar recorded approximately $1.78 billion in revenue, down 4% from $1.84 billion during the first nine months of 2025. The difference between revenue and EBITDA trends illustrates the importance of examining several performance measures rather than relying on a single headline figure.

Net debt increases to $3.84 billion

Brightstar's debt position was another important element of its Q3 financial update. The company reported net debt of $3.842 billion at September 30, 2026, compared with $2.572 billion at the same point in 2025. This represents an increase of approximately 49% year on year.

The latest figure also marks a moderate increase from the $3.791 billion reported at the end of June 2026. On a sequential basis, net debt therefore rose by approximately 1.3% during the third quarter.

Brightstar also reported net debt of $2.723 billion at December 31, 2025. The subsequent increase reflects the financial impact of the final payment associated with its Italian Lotto licence, which the company identified as a significant factor in its debt position.

As net debt is a non-GAAP financial measure, it should be considered alongside the company's reported cash balances, borrowings and other financial disclosures. Brightstar reported approximately $538 million in cash and cash equivalents at the end of September. Total liquidity stood at approximately $1.9 billion, including around $1.3 billion in additional borrowing capacity from undrawn credit facilities.

The company reported a net debt leverage ratio of 3.30 times. Although management described leverage as being within its targeted range, the higher debt balance remains an important consideration when assessing the group's financial position and future capital allocation.

Brightstar reduces its 2026 financial outlook

Alongside its quarterly results, Brightstar revised its full-year 2026 financial expectations. The company now anticipates revenue of between $2.435 billion and $2.455 billion, compared with its previous outlook of $2.50 billion to $2.55 billion.

Its adjusted EBITDA forecast was also reduced. The updated range is between $1.14 billion and $1.16 billion, down from the previous estimate of $1.16 billion to $1.19 billion.

Brightstar linked the revised outlook to updated expectations for second-half same-store sales, the timing of certain Italian B2C expansion initiatives and foreign exchange movements. The company also expects approximately $175 million in additional Italy Lotto-related service revenue amortisation to affect reported revenue growth during the year.

Despite lowering its revenue and adjusted EBITDA projections, Brightstar maintained its cash flow expectations. Its guidance continues to account for the final Italian Lotto licence payment, while the company expects approximately $750 million in cash from operations excluding that payment.

The adjustments indicate that management is taking a more cautious approach to its full-year financial projections while continuing to invest in its wider business and technology capabilities.

Washington's Lottery agreement extends through 2036

Brightstar also continued to develop its long-term technology portfolio during the quarter. In July 2026, the company announced a seven-year contract extension with Washington's Lottery, extending its relationship with the state lottery through June 30, 2036.

Under the agreement, Brightstar will upgrade the lottery's central gaming system and supply new retail terminals and self-service vending equipment. The planned deployment includes 2,200 GameTouch28 vending machines, 100 GameTouch20 machines and approximately 3,700 retailer terminals alongside ticket checkers and digital marketing displays.

Brightstar has served as a primary technology provider to Washington's Lottery since 1996. The extension therefore continues a relationship spanning three decades and provides the company with a long-term technology services arrangement.

The agreement is relevant to Brightstar's strategy of maintaining established lottery partnerships while expanding its systems, retail equipment and software services. These contractual relationships also support the company's efforts to develop recurring service revenue and maintain its position in the international lottery technology sector.

Management comments on performance and strategic priorities

Brightstar CEO Vince Sadusky described the results as reflecting the company's international operations and progress against its strategic priorities.

“Our third quarter and year-to-date performance reflect the breadth of the products and services we provide around the world and the progress we are making against our strategic priorities.

“Revenue and profit were in line with our expectations, even as we invest to strengthen our contract portfolio, expand our technology and service offerings and accelerate game and product innovation. We remain confident in our ability to leverage our leading market positions, technology capabilities and customer relationships to drive sustainable growth and shareholder value.”

Chief Financial Officer Massimiliano “Max” Chiara also addressed the company's operational performance, profitability and financial strategy.

“Operational growth drivers are contributing at an accelerated pace, reinforcing our medium-term growth outlook. Our profitability is strong and resilient as we remain focused on disciplined execution and cost efficiencies. Leverage is within our targeted range and we are committed to returning capital to shareholders.”

Conclusion

Brightstar's third-quarter 2026 results highlight the challenges of maintaining reported growth while investing in long-term lottery technology operations and fulfilling major contractual commitments. Revenue declined by 4% and quarterly income from continuing operations fell by 53%. Higher licence-related amortisation, weaker US jackpot performance and the transition of a UK service contract all contributed to the reported performance.

Nevertheless, the wider financial picture is not entirely negative. Year-to-date adjusted EBITDA increased by 5% and income from continuing operations improved compared with the same period in 2025. Growth in product sales and other service revenue also demonstrates that several parts of the business continued to develop despite the overall reduction in quarterly revenue.

The increase in net debt and the lower full-year guidance will remain important considerations for investors and other stakeholders. Brightstar's ability to manage its financing position while maintaining investment in technology, retail equipment and international lottery partnerships will be central to its financial performance over the coming quarters.

The extended agreement with Washington's Lottery provides an example of the long-term relationships supporting the company's operations. However, the strength of such contracts will need to be matched by disciplined financial management, effective execution and continued progress across its markets.

Ultimately, Brightstar enters the final part of 2026 with both operational opportunities and financial challenges. Its ability to convert contract strength, product development and service expansion into sustainable revenue and profit growth will be an important measure of whether its strategic ambitions can deliver the results management has outlined.

FAQs

What revenue did Brightstar report for Q3 2026?
Brightstar reported third-quarter revenue of $607 million, representing a 4% decline compared with the $629 million recorded in Q3 2025.

How much did Brightstar's adjusted EBITDA decline?
Adjusted EBITDA decreased by 2% year on year to $289 million, compared with $294 million in the third quarter of 2025.

Why did Brightstar's revenue decline in Q3 2026?
The company identified higher amortisation associated with its Italian Lotto licence, weaker US multi-state jackpot performance, the UK service contract transition and foreign currency movements as contributing factors.

How much income did Brightstar generate from continuing operations?
Brightstar reported $45 million in income from continuing operations for Q3 2026, down 53% from $95 million in the corresponding quarter of 2025.

What was Brightstar's year-to-date revenue?
Revenue for the first nine months of 2026 reached approximately $1.78 billion, representing a 4% decline from $1.84 billion in the previous year.

Did Brightstar's year-to-date adjusted EBITDA increase?
Yes. Adjusted EBITDA increased by 5% to $861 million for the first nine months of 2026, compared with $818 million in the same period of 2025.

How much net debt did Brightstar report?
Brightstar reported net debt of $3.842 billion at September 30, 2026, representing a 49% increase compared with the $2.572 billion reported a year earlier.

What is Brightstar's updated revenue forecast for 2026?
The company now expects full-year revenue of between $2.435 billion and $2.455 billion, lower than its previous forecast of $2.50 billion to $2.55 billion.

What is the agreement between Brightstar and Washington's Lottery?
Brightstar signed a seven-year contract extension with Washington's Lottery in July 2026. The agreement extends the technology partnership through June 30, 2036 and includes new terminals, vending machines and a central gaming system upgrade.

Who are Brightstar's CEO and CFO?
Vince Sadusky is Brightstar's Chief Executive Officer. Massimiliano “Max” Chiara serves as Executive Vice President and Chief Financial Officer.