Thank you, and thank you all for joining us on Brightstar Lottery's Q4 and full year 2025 conference call, which is hosted by Vincent Sadusky, our Chief Executive Officer, and Max Chiara, our Chief Financial Officer. After some prepared remarks, both Vince and Max will be available for your questions.

During today's call, we will be making some forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees, and our actual results may differ materially from those expressed or implied in the forward-looking statements.

The principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our latest earnings release and in our SEC filings. During this call, we will discuss certain non-GAAP financial measures.

You'll find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures, in our press release, slides accompanying this webcast, and our filings with the SEC, each of which is posted on our Investor Relations website. Our statements are as of today, February 24th, and we have no obligation to update any forward-looking statements we make.

Now, I'll turn the call over to Vince.

2025 was a transformational year for Brightstar. The divestiture of the IGT Gaming business reshaped the company into a focused, pure-play lottery leader.

We strengthened our balance sheet, improving leverage to the best levels ever, secured the critical Italy Lotto license, and introduced a multiyear capital allocation strategy that both increases returns to shareholders and provides investment capital to fund Brightstar's growth initiatives in digital, core technology, geographic expansion, retail points of sale, and printing. We generated $2.5 billion in revenue, supported by the diversity of our global portfolio.

Same-store sales grew nearly 4% for the quarter and 2% for the year, underscoring the consistency and resilience of our global lottery operations. At the same time, we invested heavily in our teams, our technology, and our processes, enhancing the organizational capabilities that will support the next decade of growth.

Our Optima program delivered cost reductions, enabling funds to be reallocated to growth initiatives. $1.1 billion of EBITDA in fiscal year '25 represents a 45% margin, even as we are investing for the long term.

We also produced nearly $750 million in cash from operations before funding the first two lottery license payments. We returned over $1 billion to shareholders through dividends and share repurchases and announced two consecutive dividend increases, including the new quarterly payout of 23 cents, which is a 15% increase from the historical run rate.

These actions reflect our confidence in the strength, durability, and long-term growth potential of our cash flows. 2026 will be another year of investment in several long-term growth initiatives.

In Italy, securing Lotto for the next nine years provides the opportunity to execute a major digital expansion across iLottery, iCasino, and sports betting, leveraging one of the largest retail networks in the world with over 50,000 points of sale. This is an opportunity to extend our reach, broaden our B2C capabilities, and bring new digital experiences to one of the world's most established lottery markets.

We are also investing in our US retail footprint by adding new points of sale, deploying self-service solutions, and partnering with national retailers to expand lottery accessibility across the country. Internationally, one of the most exciting developments is in São Paulo.

As the economic engine of Brazil and one of the largest global metropolitan regions, São Paulo represents a rare, large-market, full-service new lottery launch. We are building this business from the ground up, combining our technology, operational excellence, and game innovation to create a modern, scalable lottery ecosystem across both retail and digital channels.

These initiatives, combined with ongoing expansion in iLottery content, new games, data-driven CRM tools, and advanced AI capabilities, position Brightstar to accelerate organic growth and extend our industry leadership. Brightstar today is the largest and most advanced lottery operator and technology provider globally across both retail and digital channels.

Our core business is one of the most stable and predictable models in gaming or entertainment, and it has demonstrated remarkable consistency through all economic times. On top of this solid foundation, we are executing targeted growth initiatives in Italy B2C digital, iLottery, US retail expansion, and Brazil São Paulo greenfield opportunity, each of which enhances our long-term growth profile.

Despite our leadership position, strong margins, and highly resilient cash flows, Brightstar continues to trade at a significant valuation discount to publicly traded lottery peers and an even larger discount relative to adjacent sectors such as sports betting and iCasino, which operate with far lower EBITDA and far greater volatility. The current valuation discount versus peers presents a compelling opportunity for investors.

With durable cash flows and multiple growth catalysts underway, we are well positioned to realize the full value of our focused lottery platform. Now, I'll turn the call over to Max.

Thank you, Vince, and hello to everyone joining us on the call today. Fourth quarter revenue of $668 million increased 3% from $651 million in the prior year, beating expectations on elevated US multistate jackpot activity and strong iLottery performance.

3.5% same-store sales growth included increases across all geographies when normalized for a like number of Italy Lotto draw days. This was more than offset by the transition of the UK technology contract.

US multistate jackpot revenue rose year-over-year, driven by the $1.8 billion Powerball and the $980 million Mega Millions jackpot that hit in the quarter. Other service revenue includes the impact of higher amortization related to the Italy Lotto upfront license fee.

The new Lotto license commenced in early December and adds about €41 million a quarter in additional amortization, which is treated as contra revenue under US GAAP. Favorable foreign currency rates also helped drive the year-over-year increase in revenue.

Full year '25 revenue of $2.51 billion was in line with the prior year and included the benefits of increased demand for instant ticket and draw games and favorable foreign currency rates, which mitigated some meaningful headwinds, including $51 million from higher LMA incentive revenue in the prior year and current year impacts of $18 million from the UK technology contract transition and $25 million from the incremental Italy Lotto license fee amortization. We delivered adjusted EBITDA of $304 million in the fourth quarter, a 5% increase compared to $290 million in the prior year.

Favorable foreign currency rates drove the year-over-year increase in profit. Operationally, the high flow-through of elevated US multistate jackpot activity was more than offset by the UK transition.

Optima cost savings, which are split relatively equally between service gross margin and other operating expenses, were partially offset by project expenses related to contract bids as well as enhancements of cloud-based solutions and point-of-sale optimization. For the full year, adjusted EBITDA was $1.12 billion compared to $1.17 billion in the prior year period, as growth in wager-based revenue was more than offset by higher LMA incentives in the prior year, the UK transition, and the timing of terminal and software service deliveries in our product sales vertical.

We also incurred higher startup costs associated with the new printing press. Optima cost savings are tracking nicely to our target of around $50 million by the end of 2026 versus a 2024 baseline.

These savings are not readily apparent on the face of the financial statements as they are somewhat offset by the investments in the business that I just described, which we are incurring to drive growth in pursuit of our 2028 financial targets. Sustained cash generation funded key investments and significant shareholder returns in 2025.

On a full year basis, both cash from operations and free cash flow included $926 million related to the first two installments of the Italy Lotto upfront license fee, which were paid in July and December of 2025. While the full amount of the license fee is reported in cash from operations, Brightstar is only responsible for its 61.5% share, or $569 million of the amount paid in full year '25.

Cash from operations as reported was a negative $193 million, or a positive $733 million before the upfront license fee, exceeding the recently revised guidance. Free cash flow was negative $509 million, or a positive $417 million when you make the same adjustment.

As a reminder, the Lotto license renewal occurs every nine years, and these figures do not include the benefit of the pro rata contributions from our minority partners. The final installment of the upfront license fee is €1.43 billion, or approximately $1.68 billion, and is expected to be paid in the second quarter of 2026.

Brightstar's proportionate share of the final payment is €880 million, or approximately $1 billion. As Vince mentioned, Brightstar delivered significant shareholder returns, over $1 billion, in 2025, including $770 million in cash dividends comprised of a $3 per share special dividend and regular quarterly dividends totaling 82 cents per share, and $271 million in the form of share repurchases through a $250 million accelerated share repurchase program and a 10b5-1 plan.

To date in 2026, we repurchased an additional 2.1 million shares for a total cost of $30 million via the 10b5-1. We have utilized to date 60% of the $500 million share repurchase authorization that was approved in Q2 '25, repurchasing 18.6 million shares, representing a 9% reduction in shares outstanding.

$200 million remains under this authorization. In addition, today we announced a 23 cents per share regular quarterly cash dividend to be paid in March.

This represents a one cent increase from the prior quarter, when the dividend was raised by two cents. In aggregate, these increases reflect a quarterly cash dividend that is 15% higher than the historical run rate.

This reflects our confidence in future cash flows and reinforces our commitment to increasing shareholder returns. Net debt improved significantly to $2.7 billion at the end of 2025 compared to $4.8 billion at the end of 2024, mainly due to the allocation of $2 billion for debt reduction from the IGT Gaming sale proceeds.

Net debt leverage was also reduced to 2.4x compared to 4.1x at the end of the prior year, providing room to absorb the Lotto upfront license fee and still maintain leverage at a manageable level. We expect net debt leverage to peak at around 3.5x following the final installment of the license payment in the second quarter, then begin to decline thereafter.

Our target leverage ratio mid-cycle is at or below 3x. Our financial condition is strong, with no significant near-term maturities, due in part to the successful issuance of $750 million 5.75% senior secured notes due in 2033, the proceeds of which were used to retire $750 million 6.25% bonds due in 2027.

We have over $3 billion in liquidity, which is more than enough to fund our portion of the remaining Lotto license fee. Now, I would like to introduce our outlook for 2026.

We expect to generate revenue of $2.5 billion to $2.55 billion, which includes about $175 million in incremental Lotto license fee amortization as a contra revenue item. This target represents a more than 5% organic growth rate on a year-over-year basis, led by expansion of our core business and Italy B2C digital efforts, and is in line with the three-year CAGR we expect to generate from 2025 to 2028.

Adjusted EBITDA is forecasted between $1.16 and $1.19 billion as organic growth and Optima savings more than offset an additional $50 million of investments we are making in growth initiatives such as Italy B2C and iLottery expansion, R&D investments in technology, product, and services, and project costs associated with the extensive contract renewal cycle recently completed and in progress. Our outlook assumes a euro-dollar exchange rate of 1.15 throughout the year.

Cash from operations is expected to be a negative $900 million, or a positive $750 million when you adjust for approximately the $1.68 billion related to the final Lotto license fee. CapEx is expected to be in the range of $450 to $475 million.

About three-quarters of this investment is related to contractual obligations associated with wins and extensions we have already secured. The balance is primarily related to upcoming bids not yet secured.

We recently communicated 2028 financial targets with revenue of approximately $2.75 billion and adjusted EBITDA of around $1.3 billion. 2025 actual results, the '26 outlook, and 2028 targets are laid out here to highlight we are on plan to achieving those goals.

You can infer we believe the business can generate an average of $800 million in cash from operations in the 2027-2028 period annually, excluding upfront license payment. As a reminder, following the '25 to '28 peak CapEx cycle, we expect CapEx to moderate to about $200 to $225 million annually, yielding over $400 million in annual free cash flow before upfront license fees and after minority distributions.

This would represent a mid-teens free cash flow yield at the current share price. Now, we'd like to open the call for questions.

Good morning, Vince, Max. Thanks for taking our questions and congrats on a strong quarter and year.

Maybe starting off on the quarter, Italy same-store sales up a half a percent if you normalize for the timing of draws, a little bit below sort of the recent trend, and historically it's been about low single-digit growth out there. Could you just maybe dig in a little bit further on what's driving that, and then as we think about 2026, sort of how you view that KPI shaping up based on the content launch and the online strategy that you laid out?

Sure thing. When we reviewed 2025 and and the fourth quarter, we we'd say we we exited 2025 with really good momentum, and that was the great thing about being international and having strong operations around the world is, certain quarters you've got really good launches of products in certain markets in North America or Italy, other quarters you don't.

Having that geographical and product diversity we think is really is really really effective. As Italy's driven a lot of the growth for us and it it turned in the back half of the year where North America was a was a significant contributor.

I guess a couple of observations when we when we look at at the performance for the year and we and we think about our plans for 2026. When we look at the first half of the year versus the second half, there was a clear acceleration throughout the year in in in core sales.

The the first half of the year, as we know, was, was challenged as a result of the the impact of really low jackpot activity, and then the calculation around the the LMA at the the back half of the the fiscal year just the way the the math worked out, unfortunately. In the second half of the year, though, we saw meaningful acceleration.

We had strong same-store sales growth, and that came largely in in North America. We had better multistate jackpot performance, which was more in line with the historical averages.

Again, continued double-digit iLottery gains in both the the US and in in Italy. Our LMA jurisdictions showed, a clear recovery as well.

We had mentioned on previous conference calls that we had put some initiatives in in place that we, we were hopeful would have an impact. New Jersey was up, I think, in the 6% range or so for the back half of the year, which was driven by a longstanding effort by our government relations team to work with with the lottery commission in the state to increase the the the the payouts, as well as an incremental drawing.

In Indiana, we had some good game launches, and we also talked in previous quarters about the installation of more automated vending machines to create more frictionless points of sale in the market. That seems to be having an impact, as Indiana was up, I think, close to 7% in the in the second half of the second half of the year.

I'd say, those things all I think bode really well going into 2026. On the Italy front, as you pointed out, the fourth quarter same-store sales normalized was just a little bit, had had very low growth, but we had good good iLottery growth.

We didn't have the the product launches that that we wanted. We are going to have those going We have a pretty pretty robust plan going in to 2026.

Then the rest of the world, contributes less, certainly, but but the fourth quarter same-store sales in rest of world were up about 5%, driven by Poland and and Belgium. Overall, I'd say, despite a more challenging start to the year, we did have a a strong second half of the year, and, it just comes from different places depending on on the timing of product launches, etc.

When When we look ahead to to 2026, we've we've seen we've we've been up around 1% or so in same-store sales versus the prior year, and that has been very similar to the way we exited '25 in that it's been led by the by the US and the rest of the world. Italy's Italy's flat-ish, and again, we have some new product launches coming up, and as well as we we expect certainly in the back half of the year more significant contribution from the Italy B2C digital launch that we discussed, as well as we're we're increasing our network expansion and working with our customers on their development plans.

We think all those things can have the have the capability to deliver growth, especially as the as as the year as the year progresses.

That's great. Thanks for all that color, Vince.

There's a note in the release. Max, you're stepping away from the board.

It sounds like to focus a little bit more on some strategic opportunities and M&A. Focusing more on that M&A side of that equation, I guess, what sort of assets do you see as strategically additive to the business?

What's the market like currently for assets being shopped around, and how much of a priority here should we think about M&A being, call it relative to executing on that multiyear outlook that you laid out for us last quarter?

I'd like to kind of give a little bit of rationale behind the decision not seeking reelection to the board after a six-year tenure. This has been taken in conjunction with the conclusion of the Brightstar strategic portfolio transformation that has again just been completed with the sale of the IGT Gaming business.

Then also as part of a deliberate governance evolution to strengthen the separation between management leadership and non-executive oversight at board level. In this respect, I will continue to operate in close partnership with our Executive Chairman, Marco Sala, and with Vince on my CFO duties, as well as, as you said, on the additional responsibilities attributed to me in the areas of strategy and M&A.

Speaking specifically on M&A, I'd like to remind everyone that we have a very compelling plan with a significant step-up in our growth rate to 5% organic. That plan obviously was drafted during the transition period on the gaming sale and entails significant strategic initiatives, primarily to develop that and favor that growth through various individual engine initiatives.

Fundamentally, our plan is commensurate with a significant initiative portfolio of organic growth. Definitely, we continue to remain opportunistic on M&A, particularly if opportunities were to arise in the market in areas where we have opportunity to enhance our growth faster and accelerate our plan.

I would just add to that, when you think about the unique space that Brightstar operates in and where it has a significant right to win and significant strengths, it's in the area of digital, in the area of iLottery, this B2C expansion in Italy, our willingness to potentially partner with other joint venture partners internationally, as we've done in Italy and São Paulo, and we're currently looking in other parts of the world. When you think about where we would potentially look to enhance what we believe is a strong opportunity for, let's call it organic growth, but it's really, I think, product and geographical expansion that's built into our plan, which requires a significant amount of investment, and we expect a superior ROI, it would be in those particular areas.

That's great. Thank you both for all the color.

If I could just squeeze in one more here on capital allocation, curious Vince or Max, whoever wants to take this, just how opportunistic do you plan to be this year with that remaining $200 million or so left on the repurchase authorization? Just it seems to be, at least to us, that the market is pricing in a degree of cyclicality here that's pretty dislocated from the historical fundamentals that we've witnessed for lottery.

Just curious how you're approaching this pullback in the stock relative to the capacity left on the authorization. Thanks.

Yep.

As I said during my prepared remarks, we have significantly accelerated shareholder returns during this six-month period. We have achieved so far about 60% of our authorization on the buyback, but we have also increased the ordinary dividends and we paid a special dividend in July.

This represents more than 30% capital returns over 2025. Again, the current yield just on the ordinary dividends is getting towards the 7% at this point with the stock price of the last few days.

Having said that, we continue to be disciplined in our evaluation of the opportunities going forward to continue to kind of devolve and return cash to shareholders both in dividends and buyback. We also obviously want to be mindful of the fact that we have significant commitments with respect to Lotto and other contracts that we need to take care of during the next few quarters.

Thank you.

I would just tie on to the buyback question, my sales pitch that I included in my script. It's just I think it's pretty incredible that there's such a meaningful disconnect between our intrinsic value and where our stock trades today.

I know a lot of CEOs say that, but again, by every investor metric, whether it's EBITDA multiples, free cash flow yield, DCF, our valuation is below both direct lottery peers and comparable businesses, whether it's in gaming, travel, leisure, infrastructure-like businesses. We increased our dividend, and now that's at current trading levels, more than 6% yield, which is far above levels typically associated with companies that have our level of stability and multiyear contract visibility, and the resiliency of the business.

We have engaged actively in share buybacks, and, to Max's point, we continue to think through the allocation on a go-forward basis. We in our board certainly take a long-term view towards value creation for this business.

That's great. Thank you both.

I'll pass it on.

Operator, the next question, please?

Hey guys, good morning. Wanted to start with Brazil.

Can you maybe talk a little bit more about the opportunity and how we should be thinking about both near-term and longer-term implications? Thanks.

The Brazil opportunity is significant. We had to invest a significant amount upfront in order to obtain the license.

It was a deal that is, as I mentioned, pretty rare. There's, as not a lot of meaningful greenfield opportunities left around the world.

Brazil's been a challenging place politically and certainly had its ups and downs. We were confident that it met our risk profile after spending a lot of time doing the analysis and the work to understand the stability and the potential competitive threats in that market.

São Paulo is the crown jewel of Brazil economically. People can afford to buy lottery tickets.

It's got a terrific amount of activity. The population really enjoys gaming and wagering, and this is, I think, an area that the government is very focused on and has done the right way and has spent a lot of time in crafting the RFP and the potential bidder support.

In fact, they already have the funds allocated for several hospitals in the area, they've got a direct utilization of funds, and I think the public sees the direct benefit. In order to de-risk both the financial commitment as well as the significant amount of operating startup capital, as well as intellectual property knowledge, we partnered up with Scientific Games on this venture, and between the two of us, this is going to be an incredible entrepreneurial effort to start this lottery from scratch.

The points of sale have got to be built out, the implementation and installation of all of the machines across the state. It has an iLottery component.

Both of us will be printing tickets and contributing tickets to the venture for scratch tickets and game development, and it's a very long-term contract as well. We're excited about it.

It will, as usual, we've got plenty of experience with this, take some time to generate meaningful cash flow, but we do think this can generate meaningful cash flow. Because it's a 50-50 joint venture, we're excited about the cash flow potential, but this will be an entity that we won't consolidate.

Got it, that's helpful. Then just wanted to follow up on the M&A angle.

There's clearly been increasing deals across the global lottery space. You've addressed your M&A strategy, but how should we be thinking about implications from all the competitive M&A that's been out there for Brightstar, whether that's in a competitive operating or a bidding environment?

I would just note that one competitor is acquiring a company in the US doing prediction markets, curious to get your thoughts on that deal. Thanks.

That would be Allwyn acquiring PrizePicks. I think each company in the lottery space, there's not that many of us, have their own strategic imperative and strategic direction.

Of course everybody thinks it's the right one. We think ours is right given our many years of experience being a leader in the digital gaming space with our PlayDigital segment, as well as being a leader in the land-based gaming area with IGT.

We decided over many many years that those businesses did not have significant synergies and were not comparable, didn't help us win any more lottery contracts, and were not leverageable into incremental consumer sales. We obviously reached a very different strategic conclusion from some of our competitors that have been more active in the M&A market and actually have been acquiring companies that are involved in the iGaming space, the iCasino space, the prediction markets, and we believe that's a completely different business.

Now, yep, they have their own strategic goals. Maybe that's a way to enhance growth even though it's not a good strategic fit.

Then you also have the issue of geography, meaning many of these acquisitions that our competitors made, and the acquisition targets that are currently available don't overlap very well with our geographies. We just don't believe that a smart thing to do is to go out and pay very high multiple for a business that potentially could grow with the potential of higher growth than lottery, but is not a good strategic fit.

Again, as I've mentioned earlier, if you see us interested in anything, it would be in the area of enhancing our iLottery, game development, enhancing our platform. We are now in the B2C business specifically in Italy, and so that is interesting to us if there is a good overlap with a strong provider of games and consumers in Italy.

We believe very strongly that the greatest value creation comes organically, and the fact is we've built out an outstanding team in Italy to develop and deploy our iCasino and sports betting. We actually just on a limited basis started sports betting this week.

We've had iCasino for a couple of months. We believe in the leverageable opportunity from the Lotto license in Italy that we can grow and build that business.

We've been in that business before. We've been hard at work for many many years on building out the best iLottery platform.

Our games are now top performers in the world in our game development studio for iLottery. It's I guess a long-winded answer to we're not interested in overpaying for things just to potentially enhance our growth that are not a good strategic fit.

It would have to be a very strong strategic fit for us.

Thank you.

Good morning. A few questions, first of all, on the Italian market.

I'm interested in your first thoughts on your iGaming launch that you were commenting just a second ago. In general, I'm also interested in having your thoughts on the potential launch of the tender for instant tickets in Italy in 2027.

We read about this. I want to understand your idea on that.

The last, if you could be interested in case of the tender for retail concessions also on this kind of opportunity in Italy. Then more broadly, some color on the 5% organic growth that you are targeting for 2026 if you can give us a feeling on the contribution from the two key geographies.

I'll get started and then I'll hand it over to to Max to help with the building blocks of of growth. On the Italy digital opportunity, we're primarily administering the B2C experience through our My Lotteries app.

We've made really good progress with very little marketing. We've been putting together our marketing channels and and opportunities.

The great opportunity, of course, is the folks that I mean we touch I think roughly a million consumers a month or we have a million interaction over a million interactions a month in Italy with people checking their lottery tickets, winnings, etc. We've not begun a significant marketing effort so far through that channel and with our retailers, but clearly that's the that's the opportunity.

That that all gets launched early early this year. We recently hired a a seasoned digital gaming executive, Victor Corcoran, to lead the business.

Victor's got, great great experience. We've spent a lot of time together.

He's been with with Flutter and Fortunegaming Group and understands the opportunity to to attract consumers and what it takes to have a competitive offering. Today, early days, it's possible you can play Lotto, you can you can play Scratch & Win games, you can play iCasino and and skill games on our app, even though it has not been been optimized.

You'll see a very I think a product that is every bit as good as the established leaders in the marketplace as the as the year progresses. Having having said that, in fiscal year '25, our iLottery wagers in Italy were up over 20% as a result of of I think continue really good game delivery in the portfolio.

Our active users have have increased significantly. Again, early days, but we've we've gained three incremental points of iLottery market share since we launched the My Lotteries app, this kind of first iteration of the app back in in early January with with limited marketing.

We're pretty excited about the long-term prospect and the opportunity for us to gain a reasonable share of the iCasino and sports betting market, which could, in our plan, result over the years, and I think a meaningful contribution to to our cash flow and profitability in Italy. It naturally leverages our our strength in in operating the two largest lotteries in in Italy.

On the Scratch & Win front, we anticipate the the process for Scratch & Win will be similar to to Lotto where we have the you'll have the law come out and the RFP will be issued, could happen the end of of this year. We're closely monitoring it, and we'll see how things play out.

Obviously we're, we're very excited about the opportunity to to extend our relationship with with with the state.

In terms of the building blocks of the 2026 growth rate, I would say that we have expectation for a couple of points coming from the core same-store sales growth in the retail lottery business, probably a 1% on top coming from iLottery. Also LMA, we expect LMA to be positive in the year, primarily in the first half.

Then we have an initial contribution from the Italy B2C that is probably going to be in the range of 1% as well. Keep in mind, we have to complete the full circle of the UK transition, which started in August, that is going to be a headwind obviously on our top line.

Then we have a little bit of product sales increases backloaded into Q4 as we typically season out the product sales in the last quarter of the year. Again, all growth engines are expected to start cranking up on the 5% three-year CAGR 3-year 5% CAGR that we have laid out with our 2028 plan already in '26.

The last comment, I know you're focused on Italy, I would make, Domenico, is around the performance of Italy in 2025. Again, so much of the quarter-to-quarter performance is based on the timing and the cadence of new game launches in each jurisdiction.

If you step back and you look at the full year 2025, same-store sales in Italy were up about 2%, and when you normalize it for the number of draws and selling days, the real organic growth that we view was 3%. We feel very comfortable with the continued growth potential of the Italian market.

Thank you. If I may follow up on the guidance that you gave on operating cash flow just to be sure.

If I take out the Lotto payment, you are guiding for $750 million. If I look at your EBITDA guidance, if I'm not wrong, there is something more than $400 million cash leakage from I presume financial charges, cash taxes, or working capital.

Can you give us a sense of what do you expect on these items?

Correct, yes. The 750 is perfectly comparable to the 730 that we achieved this year.

Obviously, you have to take a little bit of after-tax EBITDA improvement into consideration. When we talk about interest and taxes, interest we have been able to optimize the interest expense with the $2 billion debt repayment, and we don't see a big increase coming yet in '26 despite the fact that we'll have to make the $1 billion payment in the second quarter.

There's going to be a little bit of increase, but not significant. Then instead, we expect cash taxes to come down significantly.

That's really our focus going forward is on the cash taxes. We paid more than $200 million last year.

We expect to pay something in the range of 150 this year. There was some timing on Italy payments about $20 million.

Then obviously, the incremental amortization upfront fee will depress a little bit earnings, and so that will be a kind of a positive for lower tax payments into '26. Then we have a couple of other optimizations underway that will allow us to kind of optimize that cash tax payment in that 150 range.

Okay. Thank you.

Hi, thank you. Vince, Max, good morning.

Thanks for taking my question. Two-parter on iLottery, focusing more on North America, I guess.

Firstly, what have you seen so far from a legislation standpoint as states are looking to expand products or bring in tax revenues for their state? Are you seeing movement there?

Then secondly on iLottery, thinking about it from an AI standpoint, I would assume maybe some of the content could become potentially cheaper just because it might be easier for some of these games to be created. Wondering if there could be margin improvements on iLottery as AI continues to be a bigger part of that development.

Thank you.

I would say on the expansion, US has been averaging one or two jurisdictions a year, right? This year Massachusetts, part of the proposal, the RFP that we won in Missouri, counts Missouri, which I think our estimates are somewhere around the middle of 2026, we'll be implementing that iLottery system.

We've implemented iLottery on the draw side in Connecticut, we've implemented it in Tennessee recently. New Jersey is a state that will also go to iLottery draw from what I recall, we'll be executing that as well.

As far as new jurisdictions, it's difficult to tell. We did not see anything explicit in this legislative session across the US, but we anticipate perhaps Colorado will be a state that will look to bid out its iLottery.

There's not a lot on the horizon, but I think a continued pace of one to two a year that seems directionally where it's going. For Brightstar in particular, we've got a strong platform.

I believe we've got more platforms deployed than any other iLottery company in the business. We continue to refine and strengthen our game recommendation engine, which has a lot of nifty AI tools incorporated in that, and we continue to work to improve and enhance.

Things like game recommendations are perfect, we've called machine learning, but now AI-driven opportunities. Then certainly, which we have talked in the past around game development.

With this current pace in North America of new jurisdictions putting out RFPs at this rate of one to two a year, we've focused a lot of attention on our content engine. We know that content from our PlayDigital iCasino experience is the area that builds credibility and reputation with our ultimate customers.

We've had a lot of focus in that area, and we've had really good success for some of the markets where we don't operate the platform. We've had really good uptake of our games because our games perform.

The team, I'd say, has done a really good job, especially in the last year and a half or so, of focusing on and delivering top-performing games that are desired in the iLottery markets by states where we don't have the platform. We think that's an exciting opportunity to continue to grow in addition to continuing to pursue the platform opportunities.

Then finally, yeah, we've also talked in the past about the AI opportunity in game development. When you find mechanics that work, and oftentimes there's a lot of work that goes into things like progressive games in particular that consumers really really seem to enjoy.

When you get a formula that works, to be able to leverage that into reskinning and slightly different look and feel of games allows you to increase the throughput and certainly bring down the cost. We've had some games that have performed so well, we've essentially translated them into other languages and change the odds and tweaked with the math necessary for compliance in various jurisdictions, but it's by and large the same game.

Our focus has been very very heavy in the iLottery space on continuing to make advancements to arguably have the best platform, have the best games. Then over time, we have been able to free up resources to be able to continue to develop better games across the world.

I think over time, we don't see we've hit the maturity stage for iLottery, fortunately. Continues to grow at a significant pace.

Over time, as you start to see the numbers get bigger and the percentage growth slows down, I think we'll have a more significant focus on taking out costs and reducing costs in the business. Right now, when we talk about investment in growth opportunities, clearly, iLottery is one of our top areas.

Just to top up the conversation on the margin expansion, as Vince mentioned, this cost in investment in growth initiatives that we expect to entertain this year obviously are going to be a little bit of a drag overall. Again, you have to look at the iLottery business as a staggering growing business as we add new contracts on top of existing contracts.

As those contracts get to maturity phase, then the margin obviously goes up because it's at the end of the day, it's a scaling of an existing infrastructure that can be really deployed and benefited from as you grow the business down the road. As we are in this heavy growth mode, we will continue to add contracts, and so the margin will gradually improve, but the full margin deployment will happen over time.

Great. Thank you.

Then lastly, just wanted to revisit the topic of the $5 Mega Millions increase, which I believe happened in April, it's eight or nine months ago. Good to see a bigger jackpot hit recently.

I know that was something that we were all trying to figure out the evolution of play and customer adoption on that. Does it feel like 2026, based on what you're giving in your guidance and kind of what you're seeing with activity, that 2026 could lead to more jackpots or higher jackpots driven by this Mega Millions increase?

Are we finally starting to see maybe a little bit more of a tipping point? Thank you.

your

operator, we're in the middle of answering a question from Chad.

Yep. Sorry about that.

Just commenting first on Powerball. The year-end run-up of Powerball was really great.

The final jackpot ended up having the highest sales of any drawing since the first $2-plus billion jackpot all the way back in 2022. The sales for the jackpot were nearly two times the sales of the last jackpot this size since October 2023.

We were very excited. It really confirmed our thesis when we look at the data over several decades that when there's multiple hits on the jackpot, you do indeed from time to time hit this jackpot fatigue syndrome.

Then when there's not a lot of jackpots for a while, the interest from the general public, once the jackpot gets up to a significant number, really really picks up. That to us was really reassuring to confirm the sustained appeal of the game.

With regard to Mega Millions specifically, the build has been slower than anticipated with the changes that have been made. As you pointed out, the game just got changed less than a year ago, and the jackpot hit four times, which is way more than statistically expected, and so it was difficult to make any inferences around the play level.

We did see a jackpot near a billion dollars finally, and that jackpot did indeed grow slower than the $2 game, and we did not see a significant benefit from the occasional players that oftentimes come into the market and help to drive those jackpots once the jackpot becomes significant. We continue to monitor it, and certainly the committee that administers and in charge of Mega Millions is very focused on it and feel like we need some time.

We need to see where this run goes. Hopefully, knock on wood, this one continues to build, and I know again, the committee with our helping where we can around research, etc., is taking a look at an assessment of the performance to make a determination as to whether or not there are some recommended changes and tweaking to the jackpot funding.

I think we'll see those things play out in 2026 as we have a larger body of knowledge from which to draw upon.

Thanks. Good morning, Vince.

Good morning, Max. I wanted to come back to the Italian digital product offering.

At least we think it's pretty significant sort of proof point for the stock. Just wondering, Vince, as you think about say the opportunity here, I assume, correct me if I'm wrong, that the biggest opportunities is to certainly convert what is a retail sales lottery into a digital and therefore higher volume, and then to iCasino.

I guess, number one, are those the most important inputs as you thought about the return and what you paid for the lottery renewal? That's first question.

Then the second question is how do we think about when you're really starting to gain traction in that digital channel, maybe on those components? Is that something in terms of KPIs or any information that you'll be releasing going forward?

Thank you.

Great, thanks for the question. Joe, I would agree with you.

I do think a lot of the enhanced growth profile of the business and the valuation has to do with growth and a significant growth lever or enhancer is the Italy digital opportunity. It will take some time to build up the unique consumers and both convert players who are primarily retail players.

I think that is one of the greatest opportunities as we've built an incredible relationship and a lot of touch points through those retail players, and a good number of those retail players have digital activity, but it's fairly limited to things like checking tickets and scanning tickets from their phone. We think we have the ability to help promote and support movement of those people into a more of a digital environment where they're actually purchasing iLottery tickets, and to a lesser extent, get them interested in playing iCasino games.

The whole thought process around the iCasino games and to a lesser extent sports betting was to provide a wholesome entertainment experience for consumers in Italy. They already love us for the lottery, they've built a relationship.

I think our digital offering on iLottery, as witnessed by the share increase, is much improved and will continue to improve. Our goal is to provide a digital platform that's best-in-class and frictionless and a really nice, fun experience.

We're not there yet. That development is taking place in 2026.

Then also, why give the consumer a reason to leave that app and have a second app to engage in iCasino games and, again, to a lesser extent, in sports betting? Why not provide all those games all together in one app?

Your assessment's right in terms of the iLottery is the driver, and then we feel like we can pick up a decent amount of iCasino play. Certainly, yeah, nowhere near the leaders in the marketplace who are long established, that have multiple brands.

We don't have to in order to fulfill our long-range plan. The same thinking around sports betting, why not also offer that in one place as well?

We certainly won't be the leading sports betting platform. That's a unique business, we don't have desires to, but again, really to offer players the convenience.

Once they've established their wallet, if they chose to, they can do everything through the My Lotteries app. I'll hand it over to Max to talk about

the

KPIs.

Again, a KPI opportunity is interesting because obviously we have to time and create a sort of leading indications of the successes of this venture. We think that the first step is in growing market share in the iLottery space.

We have seen already in 2025 a very good development without significant investments on our end with the three percentage point increase in market share. We have now turned on the e-Instant as the second provider in the market.

Thanks a lot.

Thanks for joining us today, everyone. Brightstar's core business is one of the most stable and predictable models in gaming and entertainment, and we think it's demonstrated remarkable consistency through all these economic cycles.

We've talked about our growth initiatives that we think will enhance our long-term growth profile. Again, I make the pitch for our valuation discount no matter how you take a look at this, and really appreciate your interest in Brightstar Lottery.

We'll see you in the next couple of weeks, many of you, and continue to update you throughout the year. Thank you.