Core Insights - 1060 Capital Management fully exited its position in Brightstar Lottery, selling 307,200 shares for approximately $4.9 million during the third quarter, which previously represented 9.8% of the fund's assets under management (AUM) as of June 2025 [1][2]. Company Overview - Brightstar Lottery is a leading global provider of technology and services to the regulated lottery sector, focusing on core lottery operations and divesting non-core gaming assets to enhance scalable, recurring revenue streams [5]. - As of the latest market close, Brightstar Lottery shares were priced at $16.49, with a market capitalization of $3.2 billion, trailing twelve months (TTM) revenue of $2.5 billion, and TTM net income of $304 million [4]. Financial Performance - In the third quarter, Brightstar's revenue increased by 7% to $629 million, while adjusted EBITDA rose by 11% to $294 million. However, the quarter also reported negative operating cash flow of $439 million, primarily due to an upfront payment for an Italy Lotto license [7]. - Over the past year, Brightstar shares have declined by 17%, significantly underperforming the S&P 500, which increased by 13% during the same period [3][6]. Market Position and Strategy - The exit by 1060 Capital suggests a recalibration of risk in response to the company's recent performance, as Brightstar's shares have struggled and are approximately 50% below mid-2023 levels [6]. - The fund's decision to divest from Brightstar Lottery coincides with a broader portfolio pivot, indicating that the exit may reflect a strategic shift rather than a fundamental issue with the company itself [9].

Core Insights - Brightstar Lottery PLC has signed a two-year contract extension with the Texas Department of Licensing and Regulation to continue providing lottery technology and services in Texas, effective immediately and lasting until August 31, 2028 [1] Company Overview - Brightstar Lottery PLC is a global leader in the lottery industry, serving nearly 90 lottery customers across six continents and being the primary technology provider to 26 of the 46 lottery jurisdictions in the U.S. [2][3] - The company employs approximately 6,000 people and is recognized for delivering secure technology and comprehensive solutions for its customers [3]