Brightstar Lottery PLC (BRSL)

Management’s Discussion and Analysis

The following discussion and analysis of Brightstar’s financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, included in this annual report, as well as “Presentation of Financial and Certain Other Information,” “Item 3. Key Information – D. Risk Factors,” and “Item 4. Information on the Company – B. Business Overview.”

The following discussion includes information for the fiscal years ended December 31, 2025 and 2024. For a discussion and analysis of Brightstar’s consolidated operating results and non-operating results for the year ended December 31, 2024, compared to the year ended December 31, 2023, please refer to the disclosure under “Item 5. Operating and Financial Review and Prospects - A. Operating Results” in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025 (the “2024 Form 20-F”).

A.    Operating Results

Business Overview

Brightstar is a global leader in lottery focused on innovation and forward-thinking strategies and solutions, building on our renowned expertise in delivering secure technology and producing reliable, comprehensive solutions for our customers. As a pure-play global lottery company, our best-in-class lottery operations, retail, and digital solutions, and award-winning lottery games enable our customers to achieve their goals, responsibly entertain players, and distribute meaningful benefits to communities. Brightstar has a well‑established local presence and is a trusted partner to governments and regulators around the world, creating value by adhering to the highest standards of service, integrity and responsibility.

The Company operates and provides an integrated portfolio of innovative lottery solutions, including lottery management services and instant lottery systems. The Company operates a worldwide land-based lottery and iLottery business, including sales, operations, product development, technology, and support, and is a leading iLottery platform provider globally. The Company is supported by central corporate support functions including finance, people and culture, legal, corporate communications, and strategy and corporate development.

During 2025, Brightstar Lottery completed its transformation into a pure‑play global lottery operator following the sale of IGT Gaming on July 1, 2025. Our results of operations for the year were principally influenced by (i) the renewal of the Italian Lotto license and the resulting increase in upfront license fee amortization, (ii) lower LMA incentive revenues driven by U.S. multi‑state jackpot activity, (iii) continued growth in instant ticket and draw game sales, and (iv) the execution of the OPtiMa 3 restructuring programs to realign our cost structure.

We ended 2025 with a strong liquidity position, reflecting disciplined capital allocation, debt reduction following the divestiture, and the return of capital to shareholders through dividends and share repurchases.

Key Factors Affecting Operations and Financial Condition

The Company’s worldwide operations can be affected by industrial, economic, and political factors on both a regional and global level. Geopolitical instability such as the ongoing conflict between Russia and Ukraine and the conflict in Gaza, the tightening of monetary policy by central banks and other macroeconomic factors have caused disruptions and uncertainty in the global economy, including rising interest rates, increased inflationary pressures, foreign exchange rate fluctuations, cybersecurity risks, changes in consumer sentiment and exacerbated supply chain challenges. The extent to which our business, or the business of our suppliers or manufacturers, will be impacted by these factors in the future is unknown. We will continue to monitor the effects of these events on our business, as well as the prospect of trade wars involving the U.S. and other countries, which could raise the prices of certain consumer goods, on our business and our results of operations. The following

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are the principal factors which have affected the Company’s results of operations and financial condition and/or which may affect results of operations and financial condition for future periods.

Sale of IGT Gaming: On July 1, 2025, the Company completed the previously announced sale of IGT Gaming, pursuant to the Transaction Agreements entered into on July 26, 2024. IGT Gaming and Everi were simultaneously acquired in the Transaction.

Product Sales: Product sales fluctuate from year to year due to the mix, volume, and timing of the transactions. Product sales amounted to $151 million, $149 million, and $171 million, or approximately 6%, 6%, and 7% of total revenues for the years ended December 31, 2025, 2024, and 2023, respectively.

Jackpots: The Company believes that the performance of lottery products is influenced by the size of advertised multi-state or multi-jurisdictional jackpots. Typically, as jackpots increase, sales of lottery tickets also increase, further increasing the advertised jackpot level. However, in a rising interest rate environment, advertised jackpot levels will increase more rapidly than they previously did given the annuity basis of the displayed jackpots. Therefore, in a higher interest rate environment, jackpot game ticket sales may be increasing at a relatively slower rate than the corresponding jackpot levels. In a lower interest rate environment, advertised jackpot levels are slower to increase which can negatively impact the sales of lottery tickets.

Effects of Foreign Exchange Rates: The Company is affected by fluctuations in foreign exchange rates (i) through translation of foreign currency financial statements into U.S. dollars for consolidation, which is referred to as the translation impact, and (ii) through transactions by subsidiaries in currencies other than their own functional currencies, which is referred to as the transaction impact. Translation impacts arise in the preparation of the Consolidated Financial Statements; in particular, the Consolidated Financial Statements are prepared in U.S. dollars while the financial statements of each of the Company’s subsidiaries are generally prepared in the functional currency of that subsidiary. In preparing Consolidated Financial Statements, assets and liabilities measured in the functional currency of the subsidiaries are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date, while income and expenses are translated using the average exchange rates for the period covered. Accordingly, fluctuations in the exchange rate of the functional currencies of the Company’s subsidiaries against the U.S. dollar impacts the Company’s results of operations. The Company is particularly exposed to movements in the Euro/U.S. dollar exchange rate. Although the fluctuations in exchange rates have had a significant impact on the Company’s revenues, net income, and net debt, the impact on operating income and cash flows is less significant as revenues are typically matched to costs denominated in the same currency.

Given the impact of foreign exchange rates on our consolidated results, certain key performance indicators (such as same-store sales) and financial fluctuations are reported on a constant-currency basis in order to facilitate period-to-period comparisons of our results without regard to the impact of fluctuating foreign currency exchange rates.

Legal Proceedings

From time to time, the Parent and/or one or more of its subsidiaries are party to legal, regulatory, or administrative proceedings regarding, among other matters, claims by and against us, and injunctions by third parties arising out of the ordinary course of business or its other business activities. Licenses are also subject to legal challenges by competitors seeking to annul awards made to the Company. The Parent and/or one or more of its subsidiaries are also, from time to time, subjects of, or parties to, ethics and compliance inquiries and investigations related to the Company’s ongoing operations.

There are no new material legal, regulatory, or administrative proceedings. Please refer to “Notes to the Consolidated Financial Statements - “18. Commitments and Contingencies” included in “Item 18. Financial Statements” for additional information.

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Results of Operations

Comparison of the years ended December 31, 2025 and 2024

Revenues and Key Performance Indicators

Total revenue for the year ended December 31, 2025 decreased $1 million, primarily driven by lower revenue from operating and facilities management contracts attributable to reduced LMA incentive revenues and incremental upfront license fee amortization, primarily reflecting one additional month of incremental amortization related to the €2,230 million upfront fee for the new nine (9) year Italian Lotto license. These declines were partially offset by increased revenues from Instant ticket and draw games, as well as U.S. multi‑state jackpot (“U.S. MSJP”) games (Mega Millions® and Powerball®), as discussed in further detail below.

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Service revenue for the year ended December 31, 2025 decreased slightly, primarily due to a $51 million reduction in LMA revenue and an incremental $25 million ($14 million when excluding the impact of currency translation) of upfront license fee amortization. The reduction in LMA revenue is primarily related to the recognition of an incentive shortfall in the first and second quarters triggered by the lack of significant U.S. MSJP activity during the second half of the LMA’s fiscal year. The increase in upfront license fee amortization was due to the higher upfront fee paid for the new nine (9) year Italian Lotto license. These decreases were partially offset by higher revenues generated from Instant ticket & draw games, including currency translation benefits, and the U.S. MSJP game (Powerball®).

Product sales for the year ended December 31, 2025 decreased slightly from the prior corresponding period, mainly due to timing of software deliveries.

Cost of Revenue

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