Company: BRSL
Filing Date: 2025-02-25
Form Type: 20-F
Source: 0001619762-25-000007
Chunk: 29

Company: Brightstar Lottery PLC
Filing Date: 2025-02-25
Form: 20-F
Item: Item 5
Chunk 29
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Cost of Revenue

                             For the year ended December 31,                                      Change  
  ($ in millions)                                       2023                 2022                 $       
 ──────────────────────────────────────────────────────────────────────────────────────────────────────────
  Cost of services                                                1,207                1,280      (72)    
  Cost of product sales                                  112                  120                 (8)     

Cost of services for the year ended December 31, 2023 decreased $72 million, or 6%, to $1.2 billion from $1.3 billion for the prior corresponding period primarily attributable to a $127 million decrease in point of sale (“ POS”) fees due to the disposal of the Italian Commercial Services business, partially offset by a $22 million increase in POS consumables used in providing instant and draw-based game sales, a $13 million increase in the amortization of capitalized software costs, a $10 million increase in insurance and taxes, and a $12 million increase in bank services fees and postage and freight in the aggregate.

Cost of product sales decreased $8 million., or 7%, from the prior corresponding period, principally due to product mix.

Gross Margins

                            For the year ended December 31,                  Change           
  ($ in millions)                                      2023       2022      $ / bps           
 ──────────────────────────────────────────────────────────────────────────────────────────────
  Gross margin                                                                                
  Service                                                        1,160          (9)           
  % of service revenue                                   49         48          100      bps  
  Product                                                59         37           22           
  % of product sales                                     35         23         1100      bps  

Gross margin as a percentage of service revenue increased to 49% from 48% for the prior corresponding period primarily as a result of increased Operating and facilities management contracts revenues as discussed above and decreased Systems, software, and other revenue from the former Italy commercial services business where margins were typically lower as a result of the POS fees.

Gross margin on product sales for the year ended December 31, 2023 increased 1,100 basis points from the prior corresponding period principally due to the increase in higher margin terminal and software license sales.

Operating Expenses

                                                                                                                                                           For the year ended December 31,                Change  
  ($ in millions)                                                                                                                                                                     2023      2022      $       
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