Welcome to Aristocrat's full year 2026 results. Before I hand over, please note that there will be a Q&A session following the formal presentation. To ask a live audio question, press the "Request to Speak" button at the top of the broadcast window. You can use the dial-in number and access PIN provided to join via the phone, or by pressing "Join Queue" to join via the web. If you have any issues using the platform, dial-in details can also be found on the homepage under "Asking Audio Questions." I will now hand over to Trevor Croker, Managing Director and CEO of Aristocrat.
Thanks all for joining. Before we address the substance of today's call, I will pass to the chair, Neil Chatfield, and also CEO-elect Dafne Guisard to say a few words in connection with this morning's announcement of a CEO leadership transition. Neil.
Thanks, Trevor, and good morning, everyone. You will have seen that the company has today announced that Trevor intends to retire from his role in April 2027. Having sought external advice and considered both internal and external candidates, we have announced the appointment of Dafne Guisard as CEO-elect, subject to receipt of any necessary regulatory pre-approvals. Trevor will remain with the company and will support Dafne for 12 months from today's announcement.
Given the transition timeframe, there are no immediate changes in leadership, and Trevor will continue to lead the company until the April transition. Nevertheless, it is appropriate to acknowledge Trevor's exceptional service and the performance of the business under his decade-long CEO tenure. As Trevor notes, the business is in excellent shape with great momentum and opportunities ahead, and so it is an opportune time to begin a transition of this nature in an orderly and methodical way.
I also want to congratulate Dafne. The board is unanimous in its view that Dafne is the right choice to succeed Trevor, given her exceptional track record of delivering growth across multiple consumer industries, global experience in large, complex organizations, deep product and technology skills, personal integrity, and leadership impact. The board also considered the additional benefits of an internal appointment, including performance continuity and the scope for a seamless transition.
The executive team has been significantly strengthened over the past few years, with several world-class external appointments as well as internal promotions. Our consistent investment in talent gives us real bench strength and optionality, and is part of our strategic approach to talent at Aristocrat, the benefit of which you can see in today's announcements.
As we note in the ASX release, Dafne will relocate to Las Vegas to take up the CEO role, albeit the role remains very much global, and she will be a frequent visitor to Australia and other important locations. With that, I would like to invite Dafne to say a few words of introduction before we return the floor to Trevor and the team to address the FY 2026 performance. Thank you.
Thank you, Neil. I am deeply honored to have this opportunity at a company that I love and have long admired. Over the coming months, I will be working hard to get fully up to speed with the support of Trevor, Neil, and my colleagues. Aristocrat has always been about delivering superior, sustainable returns through great product and execution, and about being relevant to more customers across the most attractive markets and segments as the industry evolves.
It is also about investing with discipline in our core offer and in the strategic capabilities that drive value and differentiation. That approach will not change under my leadership. I have spent my career building and commercializing products at scale. I believe the winners are those that create what players and customers love, use technology to keep making us better, and turn it into sustainable growth.
That is Aristocrat's great strength, and I will be building on it. I will bring a different set of skills and perspectives and a fresh set of eyes, but this is an evolution, not a reset. The growth opportunities ahead of this business are significant and genuinely exciting. Above all, Aristocrat's people are what make it special, and we will pursue those opportunities together with energy.
I look forward to working with my colleagues and our customers to ensure a seamless transition and to build further on our reputation for performance. I also look forward to meeting many of you as part of the market program and to spending more time in Australia with our people, our customers, and our investors more broadly. Finally, I want to express my thanks to Neil and the board for their confidence, my thanks and great admiration to Trevor, and my real excitement at this opportunity. I will now hand over to Trevor.
Thank you, Dafne. I have worked closely with Dafne over the past year and have been incredibly impressed by her energy, insight, passion, and impact. I am delighted in the board's decision to elevate Dafne as the CEO-elect and look forward to working closely with her over the coming period. Congratulations, Dafne. I would also like to say a word of thanks to the Aristocrat board for their consistent engagement and guidance over my tenure, particularly during my time as CEO.
I particularly acknowledge Neil Chatfield as Chair and the supportive partnership he has fostered to the benefit of the organization and our shareholders. I am very pleased that Dafne will be similarly supported by Neil and the board when she assumes the CEO role next year. James, I will now hand it over to you for the formalities.
Good morning, and thank you for joining Aristocrat's Full Year 2026 Results Presentation. I am James Coghill, General Manager, Investor Relations. In addition to Neil, Trevor, and Dafne, I am also joined by Sally Denby, Chief Financial Officer. Trevor will start by covering some key highlights from financial year 2026 and our positioning for next year, followed by a short overview of our segments and strategic progress. Sally will then take you through the group's financial results and balance sheet, followed by Q&A. If otherwise stated, all figures are presented in reporting currency, and please note the disclaimer at the back of the presentation. With that, I will now hand back to Trevor.
Thanks, James. FY 2026 is best characterized as a year of exceptional execution and building momentum, positioning Aristocrat to accelerate performance in FY 2027. We delivered a strong set of numbers with market share gains across all key segments, led by an impressive gaming result. Exciting product launches in the second half will provide growth for the next year and beyond. Our performance and share gains are underpinned by our leading product portfolio, with brands increasingly being extended across channels.
Nowhere is this more evident than our interactive business, where our sharpened strategic focus and successful content and iLottery launches are driving significant momentum. While there is still work to be done, we remain focused on delivering our FY 2029 $1 billion interactive revenue target. We have maintained our commitment to active and disciplined capital management as we continue to invest for the future, while accelerating our on-market share buyback program.
We also remain focused on driving operating leverage and scale benefits across the business. Finally, we are confident in our outlook for the coming year, underpinned by the strength and resilience of our recurring revenue businesses. Drivers include our industry-leading gaming operations in-store base, superior Product Madness positioning, and accelerating interactive content and iLottery businesses. This is reinforced by our enterprise operating model, which drives greater collaboration, scale, and efficiency.
Slide three highlights our underlying results for the year in constant currency. Aristocrat delivered a high-quality result, achieving 30% EPSA growth, driven by continued operational excellence and disciplined capital management. Growth was broad-based, with all three businesses contributing, and recurring revenue accounted for 70% of the group total. Profit margin expansion was achieved at group level while strategically investing in future capabilities, leading to an EBITA growth of 8% and a margin uplift of 140 basis points.
We capitalized on market conditions, buying back over AUD 1.3 billion of shares over the course of the year, with around AUD 650 million repurchased in the second half. Aristocrat retains significant capacity to continue returning capital to shareholders in FY 2027. Overall, we are proud of our FY 2026 performance and are carrying considerable momentum across the business into next year.
We expect to deliver NPATA growth over the full year to 30 September 2027 on a constant currency basis. Let me provide some highlights of our divisional performance. In gaming, we achieved market share gains in all key regions, with exceptional performances in gaming operations and outright sales in North America and ANZ. Gaming operations delivered continued gains, led by MONOPOLY Big Board Bucks, Buffalo Mega Stampede, Lightning 10 Year Storm, and Spooky Link Grand.
These titles contributed strongly to the growth in our in-store base late in the second half, with the majority of the revenue benefit to flow through in FY 2027. Our industry-leading margins increased 30 basis points, including the impact of a higher outright sales mix. Product Madness delivered continued share gains and margin expansion in a tough market. This reflected focused investment in UA, high-performing content, and effective D2C conversion, reaching 30% of revenue in the second half.
In interactive, iLottery and content delivered strong growth, partially offset by platforms, which was impacted by a decision to exit the White Label business. Excluding this, interactive revenue growth was almost 10%. Turning to strategy. Our long-term strategy remains focused on delivering sustainable growth and superior shareholder returns. We have made meaningful progress strengthening our competitive position by continuing to invest in content and capabilities that will expand our global footprint, deepen customer engagement, and underpin value creation.
Our content is recognized as the best in the industry, with our global studio model and enterprise technology investments building on that strength. Our product strategy enables a holistic approach to game development and distribution across channels and markets, improving monetization and strengthening our competitive position. We are also focused on expanding in under-penetrated markets, with a focus on North American adjacencies, EMEA, and entering new markets like the UAE. Our platform strategy represents an enabler for future growth, integrating advanced analytics, mobile connectivity, and real-time player engagement. These technology investments will allow operators to deliver more personalized data-driven experiences.
As we grow, we are benefiting from our enterprise operating model, which drives greater alignment, scalability, and decision-making effectiveness, ultimately enhancing operating leverage and improving profitability. Our financial strength provides flexibility to execute our strategy and continue to take share regardless of the environment. Further supporting our strategy are investments in talent.
Over the reporting period, we continued to lift capability and drive change in response to evolving strategic needs and opportunities. We announced a number of appointments to the executive leadership team in the first half of the year, bringing decades of commercial and operational leadership experience and deep AI expertise. In the second half, we added significant divisional talent and capabilities to support our interactive growth strategy. Our confidence in Aristocrat's sustained growth and consistent execution stems from our strategic advantages, a set of unique differentiators that form a powerful ecosystem providing resilience across business cycles.
They are anchored by our market-leading portfolio of content, cabinets, brands, and proprietary IP, built through discipline and sustained investment in design and development, and driving consistent market share gains over time. This strategic advantage is reinforced by a globally integrated network of creative studios and world-class talent, which has been empowered with AI tools to improve productivity and speed to market.
Aristocrat leverages its content and IP across multiple distribution channels, servicing a wide range of land-based and digital operators, consumers, and governments. Investments in cross-channel porting will strengthen our scale and customer partnerships. Deep regulatory expertise also represents a critical advantage. We operate in highly regulated markets across 350 licensed jurisdictions globally, a substantial pillar of these ecosystems that require significant sustained investment.
We've forged longstanding customer partnerships, amplified by our scale commercialization capabilities and global sales network, resulting in superior customer service and consistent share gains across markets. Sustainability and responsible gameplay underpin all of these benefits. An unwavering focus on governance, empowering safer play, and community impact enhances our resilience and reputation.
The strength of our second-half product launches across gaming and interactive flagged earlier in the year are providing strong momentum into FY 2027. The depth and breadth of our portfolio also stood out in FY 2026, highlighting that we are not dependent on any single game. Looking ahead, we continue to invest in innovation and have one of the strongest pipelines ever planned across our brands, which we believe will continue to drive share gains.
In gaming, we're proud of the award-winning MONOPOLY Big Board Bucks, which we rolled out across the U.S. and Europe from April, contributing to our exceptional second-half net additions. We will soon launch the next two games under that brand, MONOPOLY High Roller and MONOPOLY Double Wild Jackpots, a mechanical reel stepper, and we'll be extending the brand into the Class II for our tribal operators.
In interactive, we launched the highly anticipated Lightning Link brand to all major U.S. iGaming states and Canadian provinces in July, representing a record launch for interactive. High Stakes, the first game in the family, is ranked number one in Canada and second in the U.S. in Eilers online slots, where it's indexing at 45 x net win. This was followed by Tiki Fire in September, claiming the number three spot in Eilers. High Stakes and Tiki Fire collectively took 2.2% share of GGR.
The next game in the family, Magic Pearl, will launch in North America this week, followed shortly after by Heart Throb. We estimate interactive's total U.S. market share more than doubled to 8%, driven by the success of Lightning Link, as well as strong performances from other land-based brands such as Mo' Mummy and Bao Zhu Zhao Fu. This boosted interactive to the third-best indexing U.S. online slot supplier in September, up from ninth in June.
There's more to come. Spooky Link was launched recently, our second-best interactive launch ever, fueling further iGaming share gains. With more of our leading land-based games planned for FY 2027, including the much-anticipated Dragon Link, we expect strong revenue growth. Interactive is also delivering momentum in iLottery. We executed two full-service contract launches in July.
Massachusetts, the largest retail lottery on a per capita basis, and Michigan, which transitioned to an Aristocrat-exclusive contract. Both launches were executed well, with strong initial results. We expect these contracts and content to scale over the course of FY 2027 and beyond, contributing meaningfully to our FY 2029 interactive revenue target. I will now hand over to Sally, who will take us through a summary of the group results.
Thanks, Trevor, and good morning, everyone. I am starting on slide nine, our group results summary. Aristocrat delivered NPATA of close to AUD 1.6 billion over the year, an increase of 2% or 10% in constant currency. Revenues and EBITDA increased by 4% and 8% in constant currency respectively. While operational performance was the key driver of this strong growth, I would like to call out some of the P&L items. D&D expense increased 9% on a constant currency basis, ahead of guidance as we continue to invest in content and technology, including increased investment in new iLottery contracts and recent acquisitions.
Corporate costs benefited from a AUD 45 million legal cost recovery relating to the Light & Wonder settlement. Net interest expense benefited from lower average debt balances, partially offset by lower interest income due to the buyback program. The effective tax rate was 27.4% in line with guidance. EPSA increased 5% or 13% in constant currency, reflecting the strong operational performance and accretion from our share buyback program. Finally, the directors have authorized an unfranked final dividend of AUD 0.51 per share, representing a payout ratio of 38.5%.
The full-year dividend of AUD 1.01 per share represents an increase of 9% over FY 2025. Gaming delivered impressive growth, with revenue increasing 9% and profit up 10% in constant currency. Performance was driven by exceptional execution and share gains in North American and Australian outright sales, alongside continued momentum in gaming operations. Growth was underpinned by strong demand for the Baron across all regions, supported by our industry-leading content. In North America, performance was led by an outstanding outright sales contribution. Unit sales increased 8%, average selling prices rose 5%, and ship share reached 27% for the year.
This was driven by sustained demand for Spooky Link on the Baron Portrait, along with the successful launch of the Reign Single Cabinet in the second half. Adjacencies also performed well, with unit sales up 5%, led by strong growth in Georgia COAM and Illinois VGT markets. Gaming operations added around 6,500 net units during the year, increasing the install base close to 82,000 units and market share to 39%.
This was ahead of our expectations following a strong close to the year, driven by MONOPOLY Big Board Bucks, Buffalo Mega Stampede, Dragon Link, and Phoenix Link. We grew our market-leading its fee per day, with the second half up 3% sequentially, driven by premium launches and portfolio performance. Given the phasing of net additions towards the back half of the year, we expect revenue momentum to continue into the next year.
The stability evident in our North American margins reflects a higher mix of outright sales, with margin expansion in the second half driven by a higher gaming operations contribution. The rest of world segment was supported by sustained strong performance in Australia. Resilient demand for the Baron Upright and key titles such as Heaven and Earth, Cash Horns, and Cash Express Legend drove ship share to 45%, with over 11,000 units sold.
Additionally, Phoenix Link was launched on the Baron Portrait late in the year, exclusively on the hybrid model, and is seeing strong customer demand and game performance. Softer performance outside ANZ reflects lower unit sales in LATAM and foreign exchange, partially offset by stronger ASP, driven mainly by cabinet mix in Asia. Product Madness maintained its leadership position across social casino slots, with revenue increasing 2% in a declining market, resulting in share gains of 290 basis points.
Particularly strong performance was delivered by Lightning Link and Cashman Casino. Growth was driven by continued investment in content, player-first innovation, live operations, and features. UA investment increased to 19% of revenue, with targeted investment to support bookings growth and share gains. Social casino margins expanded 210 basis points, primarily reflecting the continued migration to D2C, partially offset by higher UA investment. D2C penetration reached 27% of social casino revenues for the year.
Interactive delivered strong performances in content and iLottery, partially offset by platforms. Total revenue increased 3%, including the iLottery JV, while margins declined year-over-year, impacted by acquisition-related investments. Adjusting for this, margins would have increased by 30 basis points. Content revenue increased 17%, supported by expanded market access and new launches with major operators.
The business is now live in six regulated iGaming states and all 10 Canadian provinces, having launched in Alberta's new online gaming market when it opened, deploying almost 40 games across multiple operators. Strong performance was also driven by the late July launch of the highly successful Lightning Link High Stakes, as well as via the land-based brands. iLottery grew by a healthy 17%, driven by strong performances in North Carolina and Virginia.
In July, Massachusetts went live, and Michigan transitioned to an exclusive interactive contract, contributing to growth later in the year. Early results are strong, with both expected to scale in FY 2027 and beyond. Platforms declined, reflecting the exit from the low-margin White Label business and casino systems contracts moving into FY 2027. This was partially offset by M&A.
In summary, we continue to make encouraging progress in interactive and have confidence in our plans that we outlined at the investor briefing in July to achieve $1 billion of revenue by FY 2029. Moving to slide 13, operating cash flow generation remained strong at AUD 1.9 billion, reflecting continued operating momentum, partially offset by FX. Acquisitions and divestments reflect the acquisitions of Awager and Gaming Analytics, and I will touch on CapEx and shareholder returns over the next two slides.
Aristocrat allocates capital to support our long-term growth strategy and optimize shareholder returns. We prioritize consistent investment in D&D, CapEx, and UA to drive organic growth, alongside a disciplined approach to M&A. Debt facilities were refinanced in April at attractive rates, reflecting our investment-grade credit profile. The $1 billion revolving credit facility in the new structure significantly enhances our flexibility to manage capital and invest in long-term growth.
During the year, Aristocrat returned over AUD 1.3 billion to shareholders through on-market share buybacks, and we have AUD 590 million remaining on our on-market share buyback program of up to AUD 2.5 billion. In total, over AUD 6 billion have been returned to shareholders through share buybacks and dividends since FY 2022, all whilst investing for growth.
We remain committed to returning capital to shareholders and optimizing total shareholder returns. Investment in organic growth remains key to drive long-term revenue and share gains. CapEx largely reflects expansion of our gaming operations install base, which is a high-return investment. As previously discussed, UA spend increased on a constant currency basis to support business momentum while maintaining a clear focus on efficiency and return on marketing investment.
D&D remains our single most important driver of long-term growth. This is managed across product and technology at an enterprise level to support alignment and content leverage across the group. We invested AUD 110 million in D&D, up 9%. While slightly above our guidance, the higher investment supported the new iLottery contract launches and the strong product pipeline across the business. We remain in an investment cycle as we continue to position the business for the future.
Margin expansion remains a focus as we continue to scale the business. Aristocrat has delivered consistent improvement in both segment profit and EBITDA margins over time, reflecting the strength of our operating model, scale benefits, and focus on efficiency. As the business grows and we further embed our enterprise-wide operating model, we see continued opportunities to leverage scale and reduce complexity.
These efforts are expected to achieve AUD 100 million of savings during FY 2027. This, combined with strong operating cash flow, continues to create capacity for strategic reinvestment across the business. Turning to our outlook. As outlined on slide 17, Aristocrat expects to deliver NPATA growth over the full year to 30th of September 2027 on a constant currency basis. Overall, we are pleased with the results and confident in the momentum we see for FY 2027. With that, I will now hand back to Trevor for his concluding remarks.
Thanks, Sally. In closing, I want to thank everyone at Aristocrat for their exceptional execution and commitment in delivering the strong results presented today. We enter FY 2027 with considerable momentum across the business, driven by a leading content portfolio and strong execution capabilities, which we expect to drive continued market share gains in the coming year.
In gaming, our impressive second half of gaming operations performance has expanded our recurring revenue base, which we intend to grow further as we bring new innovations to the floor. Product Madness continues to outperform in social casino through disciplined execution and clear focus on profitability. In interactive, we see significant momentum in our new iLottery contracts as they scale and as we accelerate the rollout of our proven land-based brands online.
We are focused on profitable growth, achieving operating leverage as we scale, and remain committed to a disciplined capital management framework that balances strategic investment with superior shareholder returns. Sally and I are available to take questions on the result, and I will now hand back to the moderator for Q&A.
Thank you, Trevor. If you have not yet joined the queue, please do so now. Our first question today comes from Matt Ryan from Barrenjoey. Matt, please go ahead after the beep.
Thank you. I just want to dig into the gaming ops division, which is, I am sure, the focus for most people. I think in your prepared remarks, you are talking about one of the strongest pipelines yet to come. So, could you just maybe go into that and talk about the breadth of product versus specific titles that you are referring to, and I guess what gives you that confidence that next year could be as good as this year?
Yeah. Thanks, Matt. I appreciate the question. Like we said, we exited 2026 with a strong install base and great momentum. G2E was a great showing for the company with a new theme of games. Whether it is innovation around the Reign Single as the cabinet, the Reign Double, or the Baron J Curve, which are all new hardware configurations, plus games, an extension of the Monopoly family that continues to expand, plus new features coming through in the Timberwolf and the Buffalo game. So, we have already seen the pipeline for the business post-G2E and feel confident from both a hardware innovation point of view and a game innovation point of view that we have got the capacity to have a good install base growth year-over-year.
Are the operators, I guess, changing their intentions in regards to this, I guess, continuing trend to increase the proportion of gaming ops product?
Yeah, I think we went through a cycle in the last 12 months where, as a consequence of the One Big Beautiful Bill, there was a lot more capital looking to be allocated to for-sale units, but we were able to continue to grow the install base and our share of that install base. We feel confident that operators still have the capacity on their floors for high-performing product, and ultimately, as you know, gaming operations products, if it performs, it stays on the floor. If it doesn't, it's taken off the floor. These games and this portfolio is a very strong portfolio, indexing well ahead of our competitors. If you look at it from that perspective, we feel confident in the operator's appetite for these games on their floor.
Thanks, Trevor.
Thanks, Matt.
Our next question today comes from David Fabris from Macquarie. David, please go ahead.
Oh, hi, Trevor. Hi, Sally. Just focusing on the gaming ops business again, can you talk through the net growth attribution in FY 2026? I mean, I think about three drivers: casino floor expansion, displacing a competitor, and then new openings and expansions. I guess I am trying to understand where all that growth came from, and maybe you can talk about how you think about the outlook for those three drivers into FY 2027.
Yeah. Okay. Let me work my way through that. First of all, our key driver is taking market share, and we have proven that getting to 39% of the gaming ops market and continue to focus on that. Some of the drivers behind that, licensed brands, so Monopoly, a strong contributor in the second half. Games come through from in this year as well, early this year, which will continue to build that brand franchise on the floor.
So licensed themes is one. The next one is continuing with the extension of brands like Buffalo, Timberwolf, expanding those floors and the hardware configurations to go with that. I think that they are probably the bigger drivers of how do you drive share in a market that exists. The second part of your question around new openings, we participate in new openings. Our share of new openings was higher in gaming operations than our traditional install base, which goes to the confidence of the performance of the portfolio for those that open a new property, that they have the right portfolio from day one. Going forward.
Got you. Thanks for that.
The second part of the question going forward is, as I said to Matt's question, hardware configurations gives us a platform. The portfolio of games gives us platform. We didn't show everything at G2E, obviously, and we feel confident that the market, there is enough opportunity in the market for us to deliver more gaming ops growth.
Got you. I appreciate that. With the $1 billion revenue target in Interactive, can you just remind us of the key drivers there and maybe set some framework? I know you're at 8% iSlot market share in September. Is there an update for October? How should we think about that in 2029? Second to that, do you need to win new iLottery contracts or see new iCasino markets open to reach that target? Do you think that you've got enough now going on to get there organically?
Yeah, so I'll break it down into three buckets, and then we'll go a little bit under in each one of those. The three buckets that are going to drive the growth towards $1 billion is iLottery and iLottery growth, the content growth, and then platforms. If we go into the iLottery, the way to drive growth in iLottery is to increase the spend per customer or per capita in each of the existing markets to be able to take more business direct out of the JV, and then as new markets open, participate and win. We feel confident around the first two, and we don't rely on new markets necessarily to grow significantly in iLottery, but they will help accelerate.
The second bucket in content, again, we will enter Rhode Island in FY 2027, which will give us access to eight states in North America, plus the five provinces in Canada. The key in iGaming is to be there when the market opens, which we did in Alberta in July. We were able to offer 40 games on day one live, and we've seen good results from that perspective. The second part is, as you've seen, as we start to bring more of our land-based content to iGaming, we are seeing significant performance improvement. I can't give you an update on October.
I think the reports are going to be released any day, but we feel confident with the portfolio of games and the cadence of games, both between network and exclusive, that we'll continue to see share gain, and that's another big step towards closing the $ 1 billion, our target towards $ 1 billion. Obviously, as markets open, and we've seen some engagement around that post the midterms, but it is way too early to call that.
Our objective is to be able to enter a new market the day it enters with a portfolio of great games or great technology. As far as the platforms business goes, there's really two lines there, and that's around the new innovations that are going to drive growth there in Gaming Analytics and Awager. The other one is the expansion of tribal iGaming. We've been live with Chickasaw, and we have a pipeline now of other customers to launch in that tribal iGaming space.
Got you. Just to close out my question there, I appreciate that you're going to Rhode Island. Florida's also open now, so I assume if you're going to be entering all markets that open, you'll be in Florida pretty quickly if you're not there already?
We're not there at this point in time. Florida has a Yes, we are working through that process.
Thank you very much.
Our next question today comes from Justin Barratt from CLSA. Justin, please go ahead.
Hi, guys. Thanks very much for the opportunity. I just wanted to, coming back to gaming operations, I really thought one of the really good parts of the results today was also the fee per day growth that you were able to achieve. I just wanted to understand, Trevor, what the key drivers of it are. I assume it's mainly mix, but was there anything else there that supported the fee per day, and I guess how we should think about the outlook for fee per day growth into FY 2027?
Yeah. Thanks, Justin. 3% sequential fee per day growth is a very good outcome when you are installing nearly 6,500 incremental units. The team has done a great job in executing. It really comes down to two things. The first one is around the portfolio shape, and we have been talking to you now for about a year and a half, two years, about how we needed to change the premiumization of our portfolio, and that is coming through with the games that are being released in the portfolio.
The other one is around the hardware configurations, which also help with that, and also with licensed brands. Structurally, we see that the shape of the portfolio is right. I do not think you should be continuing to expect to appreciate fee per day on an ongoing basis. 3% sequentially is a good step up. We continue to target to have a premium fee per day, and that is driven, as I said, by content, hardware, and licenses.
Fantastic. Just coming back to Aristocrat Interactive, really keen to understand, on the content side of things, Trevor, obviously Lightning Link games have come out and done really, really well. Can you talk a little bit more about the pipeline for content release into FY 2027, particularly when we think we should be expecting Dragon Link? Also, just in relation to those Lightning Link games, I guess there is a level of confidence and conviction that those games will perform quite well when they are released.
My concern is the stickiness of the consumer or the customer in the online space with, I guess, a real depth and breadth of opportunity from other competing content. How comfortable you are with the stickiness of those Lightning Link games to this point, albeit it is obviously still quite early?
Thanks, Jus. I think it is a mix of two things. First of all, it is the iconic brand and the brand, and then it is about the execution. From a brand perspective, we are not launching all of the Lightning Link portfolio in one go. We are launching the Lightning Link over a series of periods, and that is sequenced according to the way the interactive team choose to release those brands. There is a portfolio of games of 14 - 16 games in Lightning Link that we have access to over the period to release into the marketplace. We do look at how accretive each new game has been, and we are seeing accretion from that perspective.
The second part is the execution, and this is where the interactive team, we built a lot of capability there over the last 12 months under Dylan, and it's an important part of how we go to market and how we optimize that content in the interactive world. That comes down to how you do network-wide or do exclusives, and then when you phase this, but also the rest of the portfolio. Buffalo is out at the moment doing very well, as we said in the pre-remarks, Spooky Link, and also Mo' Mummy, and we're very comfortable that the content from land-based is resonating with the right execution by interactive teams into that market.
Sorry, Trevor, when can we expect the release of Dragon Link?
It will be early next year.
Early next year. Fantastic. Thanks very much.
Calendar.
Great. Thank you.
Our next question comes from Andre Fromyhr, from UBS. Andre, please go ahead.
Follow-up. Thank you. Good morning. Maybe just a follow-up on the gaming ops discussion and picking up on the its fee per day momentum. I take all the points that have been shared already about the strength of the pipeline that you've shared, and I think that supports the interest in the games themselves from the operators and the players. But I think some investors have reflected on the last time we saw installs around the 7,000 mark, it was followed by a period of weaker its fee per day. So, maybe on the commercial side, Trevor, you could talk about your ability to appropriately monetize the performance of the games that you've been putting in. I am not sure if the mix of ins and outs over the year plays a role in that as well.
Yeah. Thanks, Andre. I guess I will go back to the fact that we believe we have got the strongest planned pipeline that we have had for years, and it starts with content, and that content has been planned appropriately, and it will be phased through the year. I feel confident that our commercial teams have the capacity to monetize, using your word, the games in the marketplace. It really starts with, as I said, it is the right content, it is the right license, and it is the right hardware. You have seen from our commitment around our confidence around the outlook, is we are confident around our ability to continue to take share and grow the gaming ops business and grow gaming share as well.
Okay. The scale of the 4,500 in the second half being greater than previously guided, what was the positive surprise, I guess, that drove that? Was it more to do with the number that you were putting on floors, or were there removals that you'd prepared for that didn't come through?
Well, as you know, it's a net number. We launched a portfolio of games basically through March, April, May that were very high performing. You can see the performance ranking at 2.89 x for premium gaming ops. That portfolio of games have performed and performed extremely well, and as they perform, pipelines expand. We had a portfolio of games coming through in the second half which built that momentum for install base.
Okay. Just a quick follow-up on the Lightning Link launch and how it's going. Are you able to quantify how much Lightning Link contributed to the results today? I understand it's only really one quarter and early days, but if you could give a sense of the run rate that it carries into next year?
Yeah, you're right. It's a small number. It was only launched at the back end of July, so it hasn't had a lot of runway into the results this year. But we have seen the momentum. As we said, it took 2.2% of GGR for the period. So, we feel that that's a platform to continue to build on with new releases and execution by the interactive team.
Okay. Thank you.
Thanks, Andre.
Our next question comes from Rohan Sundram from MST Financial. Rohan, please go ahead.
Thank you. Trevor, congratulations on your career. You will be missed, and wish you all the best. Similarly for Dafne, congratulations, and wish you all the best too.
Thanks, Rohan. Thank you. You do not get an extra question by doing that, so you are still only getting two.
That was my question. Time is up.
No, you are right.
All good. A couple of ones. Focusing on the margins, firstly, can I ask on the gaming and Product Madness segments, taking on board the commentary around operating leverage, which we are seeing, and we saw good improvement in the second half versus the first, how do you see the outlook for margin in those segments? Is there anything that would hold you back from seeing further mild improvement going forward?
Sally?
Yeah. Look, it is a good question, and we are doing a lot of work of focusing on margins, but the EBITDA margin in totality for the organization. Yes, you have seen some of those benefits come through both Product Madness and Gaming, but it is a holistic approach to the organization. So whether we are touching the segment profits, whether it is D&D, whether it is corporate costs, our commitment is to drive AUD 100 million worth of cost out of the FY 2027 numbers, to give us the opportunity to reinvest.
As you will see from these numbers, we are on track to actually do that. We have seen some benefits come through this year, and we will continue to drive that forward. I think the other thing, just to add on Product Madness, Rohan, is the DTC contribution as well. That lifted to 27% for the full year and was 30% for the second half. We are actually seeing benefits from that as well come through the Product Madness, partly offset by UA investment this time, but that is also a lever that we are going to continue to focus on too.
Thanks, Sally. Yeah, there are some clear drivers in those segments. On the interactive segment, I might have missed it, but the segment margin came back about 3 percentage points second half on first half. I appreciate there is a bit going on, there are some transitions going on there. How should we think about that margin progression as the iGaming content ramps up and as you are also entering new markets in iLottery? Is there a negative mix shift anywhere in that, or is there scope for improvement?
There is absolutely scope for improvement. There were a couple of things going on this year as we exited the White Label business. We also had the new acquisitions coming in that are early startups that bring some additional cost for at least this year, maybe next year as well. Then obviously we had a couple of CXS deals move out into FY 2027. But yeah, you can absolutely expect that we will continue to focus on growing that margin within the interactive business, and there were a number of one-offs this year that have impacted us.
Understood. Thanks, Sally.
Okay. Thank you.
Our next question comes from Adrian Lemme from Citi. Adrian, please go ahead.
Oh, hi. Hi, team. I just want to echo Rohan's sentiments. Always appreciated our discussions, Trevor, so all the best and well done, and congrats, Dafne. I just wanted to pick into the iGaming content a little bit more. We saw the revenue roughly up 10% in the second half year-on-year, yet the content market share doubled to about 8%. I understand Lightning Link only launched in July, but if you see a doubling of market share, is that naturally going to give you a doubling of content revenue in the absence of new markets opening, or is there something else we need to consider here?
I think you have got to think about it. I do not think you can draw a parallel between market share and revenues. What you have got to look at there is mix. So there will be mix as to how that is grown. Not all games are made equal. What I would say to you is we feel very confident about the pipeline of games we have planned for the interactive business for the year and our ability to commercialize those. As I said earlier, commercializing the right way, not just throwing games out to the market. I do not think you should take a parallel of just taking market share and running it as a calculation on your revenue. There is mix involved with that as well.
Okay, so the new games that are coming out, Trevor, obviously Lightning Link just launched, and then Spooky Link and Dragon Link, presumably they are actually higher yielding games relative to the older titles. Is that right or wrong to assume?
Oh, we are not going down that path, to be honest with you, Adrian. I mean, all the pricing is the right thing for the customers. What I would say to you is that as games stay in that market for longer, the sustainability of the revenues are there, and therefore the flow-through of profit comes.
Okay. Thank you. Just a question on the platforms within Aristocrat Interactive. As part of the strategy to get to $1 billion interactive revenue by FY 2029, I think from your strategy day preso, you had a $50 million- $100 million uplift in platform revenue. So, I appreciate some of the decline this year was due to the White Label exit, but where do you see the long-term growth in this category to get to that addition, please?
The key couple of growths there is the tribal iGaming. Continuing to expand the platform into tribal iGaming. The CXS businesses in North America and Australia, making sure we continue to remain contemporary. Then the addition of a couple of acquisitions, being Awager and Gaming Analytics, which are new growth opportunities to help expand that platform business.
Okay. Thanks very much.
Thanks, Adrian.
Our next question comes from Mark Wilson from RBC. Mark, please go ahead.
Thanks very much, Trevor, and congratulations on your 10 years as CEO. Given that growth in the gaming ops install base and the momentum that you have got in interactive, you may have been tempted to stay for another one to two years?
Mark, timing is everything in life, and the company is in great shape. There is a lot of momentum ahead of us, and we have got a strong leadership team behind us. It is always good to know when it is time to go, but the business is in great shape, and the performance has proven that in 2026, and I feel very confident about 2027, 2028, and into the future. We have invested heavily around talent, we have invested heavily around product and creative capability, and we have got a pipeline of games.
The interactive business, as you have all highlighted, we believe that the momentum is building there, and we have really exited 2026 with the momentum that we want to get towards our $1 billion 2029 target. I think the time is right. It has been a great experience here, and Dafne will do an exceptional job, and the team are motivated to continue to deliver superior shareholder returns.
Very good, and congratulations once again. I have just got a quick question for Sally. Just in relation to the AUD 100 million of cost out, I am just wondering how much work has already been done, and you are expecting the full amount to fall in 2027, or is this something that is going to be phased in through the course of the year?
Thanks for the question. There is a lot of work already been done during this year, and we have actually made a number of planned redundancies in the 2026 year so that we are moving into 2027 with momentum. With regard to the full AUD 100 million falling through, I think we have always been clear that part of the rationale for driving the focus on productivity is actually to create an opportunity so we can continue to reinvest in strategic priorities. Yes, a lot of that will fall through, but we will actually reinvest as appropriate as we go into FY 2027 and beyond.
Okay, great. Thanks very much, everyone.
Thanks, Mark.
Our next question comes from Liam Robertson from Jarden. Liam, please go ahead.
Thanks. Morning, team. Just want to dig in a bit more on the fee per day. I mean, obviously up 3% half on half was a great result. Sounds like the installs were fairly late stage in the period, so what I'm just keen to unpack is how much benefit you did see in the second half from those new titles. Just given Monopoly, its fee per day was a large proportion of that, how much of the benefit should we expect to annualize into the first half of 2027? Thanks.
Yeah, thanks, Liam. I guess, just to set it up, I mean, we don't believe we've seen a lot of benefit in the FY 2026, and we're saying that momentum will flow through into FY 2027. We're not really disclosing what it is, but it takes time to build games and portfolios, and what I would say is look at the exit install base and the fee per day, and that's where the value that we've created over the year is, and that starts the FY 2027 year, and we're saying we're going to build on top of that.
I think the only thing I would add is everything's not linear or equal. We have a mixed portfolio, some fixed fee, some variable. We have Class II, we have Class III. So it's not a linear exercise, but I think to Trevor's point, if you take our ending install base and our fee per day, that gives a good run rate into FY 2027.
Right. That's very clear. Thanks. I was just trying to clarify some earlier comments on the call, which I think might have caused a little bit of confusion, but that's very clear. Then just maybe follow up on cost, Sally. I mean, appreciate you keep talking around the gross cost savings and the need to reinvest some of that back into the business. I mean, given we are now into 2027, can you talk specifically around I mean, I doubt you're going to talk to how much you'll reinvest, so keen to understand what's falling through from a net basis. But maybe if you can just give us a sense of what some of those initiatives are that you are reinvesting into?
Oh, look, I think we look at the opportunities in the business, and we look at them from a returns perspective. Obviously, product and technology remains key for us. We have a heavy focus in Interactive. Obviously, you have seen the investments this year in Massachusetts and Michigan, the content into the iGaming business, and then obviously our core gaming portfolio.
We also bought Awager and Gaming Analytics this year, which, as I said earlier on the call, are in early startups, so there will be continued investment in them. We will continue to look at the breadth of our portfolio and where the opportunities are. It is not a set in stone on the 1st of October that we have decided what everything is going to do, but it is about creating that capacity as opportunities we discuss and review internally come to life.
Okay. Great. Thanks.
Thank you.
Our next question comes from Sriharsh Singh from Bank of America. Sriharsh, please go ahead.
Just one question from me. Can you update us a little bit on the Hold & Spin patent situation, especially following the Ainsworth agreement?
Sorry, Sriharsh. You are breaking up a lot. Could you just try again, please?
Sriharsh, I will unmute your line again. Let us try one more time. Sriharsh, you are live. Your hearing is okay?
Is this better? Apology for that.
That is better. Thank you.
Yep. Hey, Trevor, just one question on, could you update us on the hold and spin patent situation, especially following the Ainsworth agreement announced recently? Are you pursuing other suppliers? How meaningful could the licensing royalty opportunity could be, and where do you stand on enforcing the patent portfolio if you were to win it?
So on the Commissioner of Patents piece, we have won that through the High Court, and those patents have been granted. We now are, as we would always do, enforcing the protection of our patents and our IP, and we have, as we have published, a licensing agreement with Ainsworth to do that. There are other companies which we are in discussions with, but I am not going to go into the legal scenarios on those at the moment.
And just digging into it, Trevor Croker, just like Preston, how meaningful could be the royalty opportunity? Like AUD 500,000 or what? Is that reasonable to think about?
I wouldn't characterize it like that. I think it will come down to how the court positions it and whether there is a licensing opportunity or not. I wouldn't be characterizing it in quantity or dollars, and it's early stages at this point.
Okay. Thank you.
Before we move on to the next question, just a reminder of the instructions. To ask a live audio question, press the Request to Speak button at the top of the broadcast window. Follow the instructions on screen to join the queue. Our next question comes from Kai Erman from Jefferies. Kai, please go ahead.
Morning, Trevor. Morning, Sally. I just want on Product Madness, obviously very strong revenue outperformance relative to the rest of the market. How are you guys achieving that outsized outperformance, and how sustainable do you think that is given the backdrop of the market being in pretty significant decline?
Yeah, thanks, Kai. Appreciate the question. I think to look at it a couple ways. First of all, it is great land-based content, and monetizing the content is what we do as a company, whether it is in iGaming, gaming, or social casino. This is about monetizing great content that players like to play. Second part around that is that we continue to invest in UA, where a lot of our competitors are not investing in UA, so we are able to drive efficient and effective traffic to the site, and that is an important part of how we grow it.
We are working to continue to make sure that those apps remain contemporary, looking at new features, better games, etc , that reflect what is going on in that marketplace. I feel confident that, yes, it is a tougher market, and we reference that, but the things we are doing are the things that are within our control, and we are starting with content as the first part of it. We are then investing, as we always do, on a ruthless basis to make sure we drive the right traffic and monetization, and we continue to look at innovation to serve the players what is contemporary in the marketplace at the moment.
Great. Thanks, Trevor. Then maybe just one on broader strategy. Obviously, noting the announcement today of the leadership change and the broader backdrop of where your balance sheet position is and some capital firepower you have got. How are you guys thinking about strategy, both from an inorganic perspective and potentially any kind of step changes given the leadership change context?
Yeah. Thanks, Kai. I mean, you heard Dafne talk about evolution, not a reset, and I think that is an important transitional phase. We are in a fortunate position as a company. We have got a great balance sheet and capacity, but it is important that we be disciplined in the way that we use that, and we continue to look at the market, at the strategic choices and options that are out there, and what would be incremental to our portfolio.
Remember, we look to take share every day as our primary way of growing the company, and then we use M&A to accelerate that growth. We continue to watch the markets and look for strategic opportunities that fit into our portfolio that will accelerate growth. We watch a lot, and we've got the capacity, but it will be a case of, in the future, what is the right returns and how it will accelerate the growth of the company.
Perfect. Thanks, Trevor. I will leave it there.
Thanks, Kai.
Our next question comes from Cameron McDonald from E&P. Cameron, please go ahead.
Yes, morning. Just a question from me on the cost out, and the interaction of that AUD 100 million with the AUD 45 million legal settlement and how we think about that into next year being added back. Also note, and I think Sally said earlier, that there has been some work done on the cost out already, and mentioned some redundancy programs, but there is nothing in the significant items taken below the line at the moment around that. So, how do we think about the significant items into next year, and then also the cash flow impact of any of the initiatives you undertake to achieve those cost savings, please?
I think a couple of things. I will touch on the redundancies. There are no redundancies with regards to the cost-out program below the line. We, as an organization, believe that we should be, on an ongoing basis, looking at how we effectively run the organization and deploy our resources. You would typically see that there is very minimal below the line in terms of redundancies.
That is what we have done historically, and that is what we continue to do. You can expect that will be the same going into next year. With regards to the Light & Wonder and the AUD 45 million, I think if you think about that by just adding that back to our cost base for next year, that will be the increment that largely, from a corporate cost perspective, brings us broadly back in line with where we were last year.
That is a comparable number for you. I think when you think about cost out more broadly, I think the way that I would really tee it up is it is about challenging our ways of working. It is about simplifying, it is about becoming more effective to actually get the benefits of scale out of the size of our business today. It is not a one-off exercise. It is an ongoing focus of the organization. As was pointed out earlier on the call, you have seen that come through some of our margin expansion as well. So, it is a combination of great product going into the market and an ongoing focus on driving an effective business and getting the benefits of the scale of it today.
Okay, thank you.
Thank you.
Thanks, Cameron.
Thank you. There are no further questions. I will now hand back to Trevor.
Thank you, and thanks everybody for your time today and your ongoing interest in Aristocrat. We are very focused and very confident now for the coming year, underpinned by the strength and resilience of our recurring revenue business. We are focused, and we have a portfolio of games and assets to continue to drive growth in FY 2027 as we carry that momentum out of 2026.
We are also focused on a smooth transition, and that it is not a distraction to the organization. We have done a lot of planning around that, and we feel very comfortable that as we move through this period of time, the company is in good shape and the opportunities ahead of us are significant. I look forward to successfully celebrating with Dafne Guisard as she continues to grow the company into the future. With that, thank you, everybody. We appreciate your time.