Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) of Australian gaming giant Aristocrat Leisure Limited and its subsidiaries Aristocrat Technologies Australia Pty Limited and Aristocrat Technologies, Inc from “BBB-” to “BBB” with a stable outlook, citing the recent paydown of a term loan, sustained low EBITDA leverage and robust cash flow generation.
The agency also noted that while Aristocrat maintains its “big three” status in the key North American gaming market, there are opportunities ahead to drive increased market share in its digital segments.
In upgrading the company’s IDRs, Fitch said Aristocrat’s North American status is resilient because it is supported by long-term contracts and high margins, as well as outright sales, which can be lumpy. As such, the ratings agency expects Aristocrat to continue driving market share gains in gaming operations with improved average fee per day (FPD) from increased Class III premium installations, varied commercial terms with operators and gross gaming revenue momentum, plus growing scale in ship share with expansion in the adjacencies segment from continued capex and design and development (D&D) spend. It also expects the company to continue taking incremental share in Class II, whose contracts tend to be longer and stickier than Class III’s.
In the social media space, Fitch believes the decision to divest the Plarium and Big Fish brands to focus on Product Madness is positive considering the latter yields higher margins and has a different competitive landscape. Aristocrat can, it said, further add to its market share in social casino despite expectations that the industry will marginally contract over the medium term due to natural correction, thanks to effective player engagement.
“Fitch believes that retaining social slots now also allows Aristocrat to fully benefit from its D&D spend across all of its three segments, driving operating leverage company-wide,” it stated. “Finally, Fitch expects Aristocrat’s digital segments (Product Madness and Interactive) to contribute a steadily higher proportion to Aristocrat’s consolidated EBITDA as its Interactive business scales.”
Most importantly, Fitch said Aristocrat continues to boast strong credit metrics with EBITDA leverage of 0.6x as of 30 September 2025 – down from 0.8x a year earlier on the payoff of a US$250 million term loan. It is expected that leverage will naturally moderate to 0.4x.
This, Fitch said, leaves the door open for substantial M&A activity.
“Aristocrat has a medium-term financial policy on a net cash basis of 1.0x to 2.0x and reported net EBITDA leverage of about 0.2x in 2025 due to continued strong cash generation,” the agency wrote. “It is unlikely to reach its target without material M&A.”
Aristocrat recently reported normalized net profit after tax of AU$1.55 billion (US$1.01 billion) for the year ended 30 September 2025, up 12.2% year-on-year, on group-wide revenue of AU$6.30 billion (US$4.11 billion).
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