Brightstar Lottery PLC

Hello and welcome to the Bright Star Lottery second quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to James Hurley, Senior Vice President of Investor Relations. You may begin.

Thank you, Sarah. And thank you all for joining us on Bright Star Lottery second quarter of 2025 conference call hosted by Vince Sadusky, our Chief Executive Officer, and Max Chiara, our Chief Financial Officer. After some prepared remarks, 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. And now I'll turn the call over to Vince.

Thank you, Jim, and good morning to all. Well, we're excited to welcome you to our first earnings call at Bright Star Lottery. As a pure-play business, we've got a clear mission of elevating lotteries and inspiring players to bring meaningful benefits to all stakeholders. Our name has changed, but our global industry leadership remains, and there are a few characteristics worth highlighting. We are the world's largest lottery operator, running -to-day operations in nine jurisdictions. We are also the primary technology provider to many of the world's largest lotteries. And we are the number one provider of iLottery platforms globally. These leadership positions are built on a nearly 50-year history of innovation, reliability, and an incredibly strong team with deep expertise in customer relations. This is the foundation from which we've been able to deliver steady growth and strong cash flows, and we firmly believe our future is even brighter. Several important milestones have been achieved over the last few months. We closed the gaming and digital sale for net cash proceeds of approximately $4 billion, which was better than expected. We secured the Italy Lotto license, our most important operator contract, through November 2034, and we've developed a compelling digital strategy to grow that business. And a capital allocation plan is in place to drive future growth while increasing returns for shareholders. With respect to the second quarter, results were in line with our expectations. Same-store sales trends improved around the world with close to 3% growth in core instant ticket and draw games and more than 30% increase in global iLottery wagers. Across the board, players are responding to innovative new games, especially those at higher price points. Italy's same-store sales performance was impressive, rising nearly 4%. -and-win wagers were up on a successful relaunch of the Miliadario franchise across multiple price points and a new summer bundle of tickets. For Lotto, multi-bed pay slips are driving 10E Lotto growth, while the Numidoro option is driving higher Giocco del Lotto sales. Italy iLottery wagers increased over 20% in the quarter on the success of new Giocco Pugh games as well as digital replicas of the most popular physical retail games. Our increase focused on driving digital adoption in Italy is working nicely. -to-year wagers on our B2C sites are growing at about twice the overall market rate, and we've gained about two and a half points of market share since launching the myLottery's app earlier this year. In the U.S., same-store sales for instance draw games returned to growth up close to 1% in the quarter. California and Florida instant ticket sales achieved strong increases, fueled by new games at $40 and $50 price points, and trends in Michigan improved with the launch of a new $50 ticket. Our proprietary Cash Pop game, which is currently in 16 jurisdictions, drove draw game sales growth in Florida, Georgia, and North Carolina. U.S. iLottery wagers were up over 30% in the period fueled by Georgia and Kentucky and the contribution from new e-Instant games we recently launched in Michigan. Multi-state jackpot activity remained low with the absence of any large jackpots in the period compared to $1.3 billion jackpot in Q2 of last year. Rest of world same-store sales were up more than 8% driven by EuroMillion's jackpot performance, which had four draws at the 250 million euro cap, in addition to double-digit high lottery and growth in Poland and in Belgium. Product sales were up about 60%, and our new -the-art printing presses is running 24-7, helping us to deliver on increased production volumes in Texas, France, and Portugal. We're seeing increased demand for our proprietary Gleam and Infinity tickets. In a short time, Infinity has developed a library of over 60 games available across 20 jurisdictions. We've had some noteworthy contract wins and extensions over the last few months. First and foremost is Italy Lotto, which we secured through November 2034. In Missouri, a Bright Star customer for over 30 years, we entered into a new 8-year contract to deploy our fully integrated Omnia solution. Omnia seamlessly connects retail and digital lottery channels to maximize operational flexibility. It also offers lotteries new ways of engaging players. We also secured several multi-year instant ticket printing contract extensions that we expect will maintain the strong momentum and opportunity we have in that business. The company has consistently returned capital to shareholders over the last decade through quarterly cash distributions. However, most of our capital during that period was allocated to investing in the business and reducing leverage. Today, with leverage in our target range, we are allocating more capital to enhance shareholder returns. In conjunction with the closing of the gaming and digital sale, we announced that a $1.1 billion net cash proceeds would be returned to shareholders. First, via a special dividend of $3 per share that provides an immediate benefit. Second, a $500 million share repurchase authorization that represents a significant portion of our current market cap and provides an opportunity for ongoing capital return and support for the stock. Today, we announced plans to launch a $250 million accelerated share repurchase program with a counterparty bank under the new authorization. This represents the largest buyback activity in the company's history. DiAgostini, our largest shareholder, will not be participating in the program, so the shares will come out of the public flow. We also intend to maintain the current level of about $160 million in annual regular cash dividends, even with a reduced share count. The return to a singular focus on lottery marks an exciting new era for the company. BrightStar enjoys global leadership and a growing industry. Our business model is supported by mostly exclusive, contractual, and recurring revenue streams that deliver steady growth and have proved to be very resilient in the face of macroeconomic and geopolitical challenges. For context, our average customer relationship is about 30 years, and the average revenue-weighted contract life remaining for our portfolio is seven years. This provides us with significant stability and visibility for our revenue, profit, and cash flow. We believe broader iLottery adoption, especially in the U.S. and Italy, will be a meaningful tailwind that enhances our future growth algorithm. We have a clear right to win in iLottery. Over the years, the BrightStar team and board of directors have consistently worked to unlock the intrinsic value of our assets. That is especially evident in the work done over the last two years to refocus the business on lottery, significantly improve the balance sheet, and return capital to shareholders. We believe BrightStar's current valuation provides a compelling entry point as we execute on our long-term objectives. We believe the future is BrightStar. Now I'll turn the call over to Max.