Brightstar Lottery (BRSL) Q3 2024 earnings summary

Executive summary

• Q3 2024 marks the first period with Gaming & Digital as discontinued operations, focusing on the global lottery business and reporting Q3 revenue of $587M, driven by Italy growth and improved U.S. instant and draw game trends.

• Adjusted EBITDA for Q3 was $264M (44.9% margin), with year-to-date adjusted EBITDA at $880M (47.3% margin), reflecting strong profitability.

• Operating income for Q3 was $110M, including a $38M restructuring charge tied to cost optimization; year-to-date operating income was $507M.

• The company is transitioning to a pure-play lottery business, launching Optima 3.0 restructuring to align costs and support growth.

• Year-to-date cash from operations reached $724M, with $489M from continuing operations, representing over 85% of consolidated free cash flow.

Financial highlights

• Q3 revenue declined 2% year-over-year to $587M; year-to-date revenue grew slightly to $1.861B.

• Adjusted EBITDA for Q3 was $264M (44.9% margin), down 6% year-over-year; year-to-date adjusted EBITDA was $880M (47.3% margin), down 2%.

• Net income from continuing operations was $43M in Q3, with diluted loss per share of $(0.39); year-to-date adjusted EPS was $0.46, up from $0.41 in 2023.

• Free cash flow from continuing operations was $144M in Q3 and $385M year-to-date; total cash from operations year-to-date was $725M.

• $121M returned to shareholders year-to-date via cash dividends.

Outlook and guidance

• Q4 2024 revenue expected at $640–$690M, with adjusted EBITDA at $280–$300M.

• Full-year 2024 revenue guidance is $2.50–$2.55B, with adjusted EBITDA of $1.16–$1.18B.

• Low single-digit same-store sales growth expected in instant and draw games, with continued momentum in Italy and recovery in the U.S. & Canada.

• Mega Millions ticket price to increase from $2 to $5 in April 2025, expected to drive larger jackpots and higher revenue.