Core Insights - The article emphasizes the significant burden of debt on companies, indicating that it is excessive for sustainable financial health [1]. Company Analysis - The focus is on the restaurant sector, with a detailed analysis of various segments including QSR, fast casual, casual dining, fine dining, and family dining [1]. - The company employs advanced analytical models and specialized valuation techniques to provide insights and strategies for investors [1]. Industry Engagement - The company actively participates in academic and journalistic initiatives, contributing to institutions that promote economic freedom [1]. - Previous contributions included discussions on monetary policy, financial education, and financial modeling, aimed at making these topics accessible to a wider audience [1].

Core Insights - Inspired Entertainment, Inc. has launched V-Play Football Brazil in partnership with Kaizen Gaming, marking a significant expansion into the Brazilian market [1][4] - The game features hyper-realistic visuals and a fully localized experience tailored for Brazilian football fans [2] - V-Play Football Brazil is officially sponsored by Brasileirão Betano, enhancing its authenticity with official branding and logos [3] Company Overview - Inspired Entertainment provides a diverse portfolio of gaming content, technology, hardware, and services across regulated gaming and betting sectors globally [6] - The company operates in approximately 35 jurisdictions, supplying systems for around 50,000 gaming machines and virtual sports products through over 32,000 retail venues [6] - Inspired's offerings include digital games for more than 170 websites and amusement entertainment solutions with over 16,000 terminals installed [6] Partner Overview - Kaizen Gaming is recognized as one of the largest GameTech companies globally, focusing on technology and customer experience [8] - The company operates the Betano brand, which has a strong presence in Europe, the Americas, and Africa, employing over 2,700 people [9] - Kaizen Gaming has received multiple industry awards, including five trophies at the 2023 EGR Operator Awards, highlighting its leadership in the sports betting market [10]

Core Viewpoint - Inspired Entertainment (INSE) shows potential as a strong investment opportunity due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][10] Earnings Estimate Revisions - The current quarter's earnings estimate is projected at $0.17 per share, reflecting a substantial increase of +142.86% compared to the previous year [6] - Over the last 30 days, the Zacks Consensus Estimate for the current quarter has risen by 73.68% due to one upward revision and one downward revision [6] - For the full year, the earnings estimate is expected to be $0.95 per share, which is a decrease of -57.78% from the prior year, but the trend remains positive with two upward revisions and no negative revisions, leading to a 71.82% increase in the consensus estimate [7][8] Zacks Rank and Performance - Inspired Entertainment has achieved a Zacks Rank 1 (Strong Buy), which is associated with a strong historical performance, as Zacks 1 Ranked stocks have averaged an annual return of +25% since 2008 [3][9] - The positive estimate revisions have contributed to a 12.9% increase in the stock price over the past four weeks, suggesting further upside potential [10]

Inspired Entertainment (INSE) closed the last trading session at $8.17, gaining 12.9% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $12.40 indicates a 51.8% upside potential.The average comprises five short-term price targets ranging from a low of $10 to a high of $16, with a standard deviation of $2.30. While the lowest estimate indicates an increase of 22.4% from the current pr ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) Inspired Entertainment reported Q1 2025 revenue of $60.4 million, significantly reduced net loss, and achieved strong operating cash flow [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $458.9 million as of March 31, 2025, while total liabilities also rose, and the stockholders' deficit improved Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $39.0 | $29.3 | | Total current assets | $161.8 | $159.9 | | Total assets | $458.9 | $438.4 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $113.1 | $104.0 | | Long-term debt | $301.5 | $292.2 | | Total liabilities | $461.1 | $441.7 | | Total stockholders' deficit | $(2.2) | $(3.3) | [Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) Q1 2025 total revenue was $60.4 million, a decrease from prior year, but net operating income turned positive, and net loss significantly narrowed Q1 2025 vs Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $60.4 | $62.3 | | Net Operating Income (Loss) | $1.6 | $(2.1) | | Net Loss | $(0.1) | $(6.4) | | Net Loss per Share (basic and diluted) | $0.00 | $(0.22) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, the company generated **$25.5 million** in operating cash flow, a significant increase, ending the quarter with **$39.0 million** cash Q1 2025 vs Q1 2024 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25.5 | $6.0 | | Net cash used in investing activities | $(15.1) | $(10.1) | | Net cash used in financing activities | $(1.7) | $(0.2) | | **Net increase (decrease) in cash** | **$9.7** | **$(4.7)** | | **Cash, end of period** | **$39.0** | **$35.3** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, liquidity outlook, segment reporting, fixed-rate debt, debt covenant compliance, and a revision for immaterial lease classification errors - Management believes cash on hand, expected cash flows from operations, and available borrowings will be sufficient to fund requirements through May 2026[27](index=27&type=chunk) - Long-term debt consists of **£235.0 million ($303.4 million)** of Senior Secured Notes with a fixed interest rate of **7.875%**, maturing on June 1, 2026[37](index=37&type=chunk) - The company was in compliance with its RCF Financial Covenant as of March 31, 2025, with a net leverage of **2.9x** against a maximum of **5.50x**[38](index=38&type=chunk) - The company identified and corrected immaterial errors in its 2024 financial statements related to the classification of leases between operating and sales type[72](index=72&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Q1 2025 consolidated revenue decreased by 3% to $60.4 million, but net operating income improved, net loss narrowed, and Adjusted EBITDA reached $18.4 million, with solid liquidity [Overall Company Results](index=24&type=section&id=Overall%20Company%20Results) Q1 2025 total revenue decreased by 3% due to lower product sales, but reduced costs led to improved net operating income and a 95% reduction in net loss Overall Company Results - Q1 2025 vs Q1 2024 (in millions) | Metric | Q1 2025 | Q1 2024 | Variance (Functional Currency) | Variance % (Functional Currency) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $60.4 | $62.3 | $(1.6) | (3)% | | Net Operating Income / (Loss) | $1.6 | $(2.1) | $3.6 | 171% | | Net Loss | $(0.1) | $(6.4) | $6.1 | 95% | - The decrease in revenue was driven by a **$2.8 million** decline in product sales, while service revenue saw a modest increase of **$1.2 million**[96](index=96&type=chunk)[100](index=100&type=chunk) - Cost of sales decreased by **$2.5 million (12%)**, driven by lower cost of product sales linked to decreased hardware sales[102](index=102&type=chunk) [Segment Results](index=26&type=section&id=Segment%20Results) Q1 2025 segment performance was mixed, with Interactive revenue up 51%, Gaming down 6%, Virtual Sports down 29%, and Leisure down 3% Segment Revenue - Q1 2025 vs Q1 2024 (in millions) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | Change (Functional Currency) | | :--- | :--- | :--- | :--- | | Gaming | $21.7 | $23.2 | $(1.5) | | Virtual Sports | $8.7 | $12.4 | $(3.6) | | Interactive | $12.1 | $8.1 | $4.1 | | Leisure | $17.9 | $18.6 | $(0.6) | Segment Operating Income (Loss) - Q1 2025 vs Q1 2024 (in millions) | Segment | Q1 2025 Operating Income (Loss) | Q1 2024 Operating Income (Loss) | Change (Functional Currency) | | :--- | :--- | :--- | :--- | | Gaming | $4.2 | $2.1 | $1.9 | | Virtual Sports | $4.9 | $9.4 | $(4.3) | | Interactive | $6.9 | $3.1 | $4.0 | | Leisure | $(1.7) | $(1.3) | $(0.2) | [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA, which increased to $18.4 million in Q1 2025, with reconciliation including standard adjustments Adjusted EBITDA Reconciliation Summary (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(0.1) | $(6.4) | | Adjustments (D&A, Interest, Tax, etc.) | $18.5 | $21.9 | | **Adjusted EBITDA** | **$18.4** | **$15.5** | - Adjusted EBITDA is defined as net income (loss) excluding D&A, interest, taxes, and other adjustments like stock-based compensation, restructuring costs, and M&A costs[178](index=178&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved in Q1 2025, with cash increasing to $39.0 million and operating cash flow rising to $25.5 million, with management believing liquidity is sufficient through May 2026 - Net cash inflow from operating activities increased to **$25.5 million** in Q1 2025 from **$6.0 million** in Q1 2024, a **$19.5 million** improvement[189](index=189&type=chunk)[190](index=190&type=chunk) - As of March 31, 2025, the company had liquidity of **$39.0 million** in cash and a **$6.5 million** undrawn revolver facility[197](index=197&type=chunk) - The Board authorized a **$25.0 million** share repurchase program, with **$13.0 million** remaining available as of March 31, 2025[205](index=205&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is foreign currency exchange rate fluctuations between GBP and USD, with minimal interest rate risk due to fixed-rate debt - The primary market risk is foreign currency exchange rate fluctuation, as the company's functional currency is GBP but it reports in USD[211](index=211&type=chunk)[213](index=213&type=chunk) - Interest rate risk is low because the company's **£235.0 million** in external borrowings are at a fixed rate[212](index=212&type=chunk) [Controls and Procedures](index=47&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses, though financial statements are believed to be fairly presented - Certifying Officers concluded that disclosure controls and procedures were not effective as of March 31, 2025[218](index=218&type=chunk) - The ineffectiveness is due to material weaknesses described in the Annual Report on Form 10-K for the year ended December 31, 2024[218](index=218&type=chunk) - Notwithstanding the material weaknesses, management believes the interim financial statements are fairly presented in all material respects[219](index=219&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The SEC concluded its investigation into the company's restated financial statements without recommending enforcement action, and other legal matters are not currently material - On January 28, 2025, the SEC staff notified the Company that it had concluded its investigation regarding restated financial statements and did not intend to recommend an enforcement action[221](index=221&type=chunk) [Risk Factors](index=49&type=section&id=ITEM%201A.%20RISK%20FACTORS) No new risk factors are presented in this report, with the company referring to those discussed in its Annual Report on Form 10-K - The company directs investors to consider the risk factors discussed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024[223](index=223&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) None - None[224](index=224&type=chunk) [Defaults Upon Senior Securities](index=49&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) None - None[225](index=225&type=chunk) [Mine Safety Disclosures](index=49&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Not applicable - Not applicable[226](index=226&type=chunk) [Other Information](index=49&type=section&id=ITEM%205.%20OTHER%20INFORMATION) None - None[227](index=227&type=chunk) [Exhibits](index=49&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including executive employment agreements and required certifications by officers - Exhibits filed include addendums to employment agreements for A. Lorne Weil and Brooks H. Pierce, and a new employment agreement for James Richardson[228](index=228&type=chunk) - Required certifications under Rule 13a-14(a) and 13a-14(b) by the Principal Executive Officer and Principal Financial Officer are filed as exhibits[228](index=228&type=chunk)

Group 1: Earnings Performance - Inspired Entertainment reported break-even quarterly earnings per share, surpassing the Zacks Consensus Estimate of a loss of $0.14, compared to a loss of $0.02 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $60.4 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 6.85%, and down from year-ago revenues of $63.1 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - Inspired Entertainment shares have lost about 17.5% since the beginning of the year, while the S&P 500 has declined by 4.3% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate at $0.09 on $75.1 million in revenues for the coming quarter and $0.53 on $305.12 million in revenues for the current fiscal year [7] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Technology Services industry, to which Inspired Entertainment belongs, is currently in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of approximately $18.5 million for the first quarter, representing a growth of nearly 20% year-over-year despite some unexpected challenges [3][4] - The company successfully negotiated refinancing of existing bonds, which is expected to provide greater flexibility going forward [5][6] Business Line Data and Key Metrics Changes - The interactive business experienced significant growth, with revenue and EBITDA increasing by 497% and 979% respectively compared to Q1 2024, and margins expanded from 54% to 64% [7][8] - The leisure business was impacted by the timing of the UK Easter holiday, which shifted from Q1 to Q2, affecting performance metrics [4][21] Market Data and Key Metrics Changes - The U.S. market for the company grew by 90% in Q1 against an underlying market growth of about 20%, indicating strong performance driven by content quality and account management [8][11] - The virtual sports business showed a year-over-year decline in EBITDA but is expected to stabilize and return to growth by the second half of the year [9][10] Company Strategy and Development Direction - The company aims to reduce capital intensity by divesting the Holiday Park business and restructuring the pub business to focus on capital-light operations [6][7] - The strategy includes increasing annual CapEx to around $25 million, primarily for content-related expenses, while focusing on the rapidly growing digital business [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing the need for new state revenue sources in the U.S. and the company's positioning to benefit from this trend [8][9] - The management is cautiously optimistic about achieving EBITDA margins comfortably over 40% following the sale of the Holiday Park business [30][31] Other Important Information - The company is actively expanding its digital offerings, including launching new games and entering new markets such as West Virginia and South Africa [12][19] - The company is also focusing on the lottery space, with plans to launch a lottery game in Virginia [19] Q&A Session Summary Question: Impact of tariffs in the U.S. - Management indicated that tariffs are not a significant issue, with potential benefits from selling into Canadian markets [25][26] Question: Path to achieving 40% EBITDA margin - Management believes the sale of the Holiday Park business will guarantee EBITDA margins comfortably over 40% [30][31] Question: Stabilization of virtual sports business - Management acknowledged volatility but noted stabilization trends and expressed confidence in returning to growth [36][39] Question: Details on debt refinancing terms - The new debt deal aims for flexibility and a lower interest rate, with expectations of reduced interest expenses as leverage decreases [41][42] Question: Adoption rate of virtual sports in Brazil - Management is optimistic about the Brazilian market, noting strong early performance from localized content [48][52] Question: Trends outside the U.S. - The UK market is experiencing some softness, while iGaming continues to grow; Greece and Italy markets are relatively flat [56][60] Question: Contribution of digital to EBITDA - Management expects digital contributions to be at least at previous levels or higher by year-end, driven by strong performance in the interactive segment [64][66]

Financial Data and Key Metrics Changes - The first quarter adjusted EBITDA was approximately $18.5 million, representing a growth of nearly 20% year-over-year despite some unexpected challenges [3][4] - The company experienced a loss of about $1 million in EBITDA due to the reclassification of lease revenue [4] Business Line Data and Key Metrics Changes - The interactive business saw revenue and EBITDA growth of 497% and 4979% respectively compared to Q1 2024, with margins expanding from 54% to 64% [7][12] - The leisure business was impacted by the timing of the UK Easter holiday, which shifted from Q1 to Q2, affecting performance metrics [4][22] - The virtual sports business showed a year-over-year decline in EBITDA but is expected to stabilize and return to growth by Q3 [10][11] Market Data and Key Metrics Changes - The US market for the interactive business grew by 90%, significantly outpacing the underlying market growth of about 20% [8][12] - The company is expanding its presence in North America and abroad, with new game launches planned in West Virginia and South Africa [13][20] Company Strategy and Development Direction - The company plans to divest its Holiday Park business to reduce capital intensity and focus on capital-light operations in retail bedding and digital businesses [5][6] - The strategy includes minimizing capital expenditures to around $25 million annually, primarily for content-related expenses [7] - The company aims to achieve EBITDA margins comfortably over 40% following the divestiture and restructuring of its pub business [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the stabilization of the virtual sports business and the overall growth trajectory of the interactive segment [10][11] - The company is well-positioned to benefit from new state revenue requirements in the US, particularly in states like Michigan and New Jersey [9][10] - Management highlighted the importance of the hybrid dealer product category, which is expected to scale rapidly and contribute significantly to future growth [14][15] Other Important Information - The company successfully negotiated refinancing of existing bonds, providing greater flexibility and reducing capital costs [5][44] - The company is actively pursuing opportunities in the lottery space, with plans to launch a lottery game in Virginia [20] Q&A Session Summary Question: Impact of US tariffs on the business - Management indicated that tariffs are not a significant issue, with potential benefits from selling into Canadian markets [24][26] Question: Path to achieving 40% EBITDA margin - Management expressed confidence that the divestiture and restructuring would ensure EBITDA margins above 40% [32] Question: Stabilization of virtual sports business - Management acknowledged volatility but noted that stabilization trends are being observed, with expectations for growth moving forward [41][42] Question: Details on new debt refinancing terms - Management provided insights into the refinancing objectives, including minimizing call protection and achieving a favorable floating rate [43][44] Question: Deleveraging strategy and market conditions - Management confirmed that the new debt terms incentivize deleveraging, which aligns with the company's growth strategy in digital businesses [49][50] Question: Performance in international markets - Management reported mixed results in international markets, with growth in the UK and stabilization in Greece and Italy [61][63]

Revenue Performance - First Quarter 2025 revenue reached $60.4 million, primarily driven by record Interactive revenue, which increased by 49% year-over-year[8] - Total revenue for Q1 2025 was $60.4 million, a decrease of 3.1% from $62.3 million in Q1 2024[28] - Total revenue for the three months ended March 31, 2025, was $60.4 million, compared to $62.3 million for the same period in 2024, reflecting a decrease of approximately 3.1%[39] Segment Performance - The Gaming segment reported a revenue of $21.7 million, a decrease of 6% compared to the previous year, while the Virtual Sports segment saw a 30% decline in revenue to $8.7 million[10] - The Leisure segment's revenue decreased by 4% year-over-year to $17.9 million, attributed to seasonal factors[10] - The interactive segment's revenue was $12.1 million, contributing 20.0% to total revenue[39] - The gaming segment contributed $21.7 million to total revenue, accounting for 35.9% of total revenue for the period ended March 31, 2025[39] - The sports segment generated $8.7 million in revenue, representing 14.4% of total revenue for the same period[39] - The leisure segment reported revenue of $17.9 million, making up 29.7% of total revenue[39] Profitability Metrics - Adjusted EBITDA for the first quarter was $18.4 million, up 19% from the previous year, with Interactive Adjusted EBITDA growing 75% year-over-year[8] - Adjusted EBITDA for Q1 2025 was $18.4 million, compared to $15.5 million in Q1 2024, representing a 18.7% increase[34] - The adjusted EBITDA for the three months ended March 31, 2025, was $18.4 million, compared to $15.5 million in the same period of 2024, representing an increase of approximately 18.6%[39][40] - The Interactive segment's Adjusted EBITDA margin expanded approximately 1,000 basis points to 64%, showcasing the scalability of digital operations[3] Net Income and Loss - Adjusted net income for the first quarter was $3.8 million, compared to a loss of $2.8 million in the previous year[10] - Net loss for Q1 2025 was $0.1 million, significantly improved from a net loss of $6.4 million in Q1 2024[28] - For the three-month period ended March 31, 2025, the company reported an adjusted net income of $3.8 million, a significant improvement from a net loss of $2.8 million in the same period of 2024[37] - The adjusted net income per diluted share for the three months ended March 31, 2025, was $0.13, compared to a loss of $0.10 per diluted share in the same period of 2024[37] Cash Flow and Assets - The company reported a net cash provided by operating activities of $25.5 million in Q1 2025, compared to $6.0 million in Q1 2024, an increase of 325%[32] - Cash at the end of Q1 2025 increased to $39.0 million from $29.3 million at the end of Q4 2024, a growth of 33.8%[30] - Total assets as of March 31, 2025, were $458.9 million, up from $438.4 million at the end of 2024, reflecting a 4.0% increase[30] Liabilities and Debt - The company entered into a commitment letter for £287.8 million in private credit facilities to refinance existing debt, including a new £270 million senior secured term debt[7] - Current liabilities increased to $113.1 million in Q1 2025 from $104.0 million in Q4 2024, a rise of 8.8%[30] - The company’s total liabilities increased to $461.1 million as of March 31, 2025, compared to $441.7 million at the end of 2024, an increase of 4.4%[30] Strategic Initiatives - The company is focusing on growth initiatives in Brazil's Virtual Sports market, adapting to new regulatory changes[5] - New partnerships were established, including an extension with Rush Street Interactive to provide online content in Mexico and Delaware[12] - The company anticipates continued growth in its Interactive and Gaming segments, with strategic initiatives in Virtual Sports and Leisure for sustainable growth[9] Shareholder Information - The weighted average number of shares outstanding during Q1 2025 was 28,973,938, up from 28,603,734 in Q1 2024[28] - The weighted average number of shares outstanding (diluted) increased to 29,689,818 from 28,603,734 year-over-year[37] - The company incurred $30.3 million in selling, general and administrative expenses in Q1 2025, down from $34.2 million in Q1 2024, a decrease of 11.4%[28] - The corporate allocation for the three months ended March 31, 2025, was $(6.6) million, compared to $(7.6) million in the same period of 2024[39][40]

Core Insights - Inspired Entertainment, Inc. reported a strong start to 2025, with significant growth in its Interactive segment, which saw a revenue increase of 49% year-over-year, driven by robust performance in the UK and North America [2][9] - The company achieved a total revenue of $60.4 million for the first quarter of 2025, a decrease of 3% compared to $62.3 million in the same period last year [9][11] - Adjusted EBITDA for the first quarter was $18.4 million, reflecting a 19% increase from the previous year, with a notable 75% growth in Interactive Adjusted EBITDA [9][11] Financial Performance - Total revenue for the Gaming segment was $21.7 million, down 6% from $23.2 million in Q1 2024 [11] - The Virtual Sports segment reported revenue of $8.7 million, a decrease of 30% from $12.4 million year-over-year, impacted by regulatory changes in Brazil [11][4] - The Leisure segment generated $17.9 million in revenue, down 4% from $18.6 million in the previous year, attributed to seasonal factors [11][5] Segment Highlights - The Interactive segment's revenue reached $12.1 million, up 49% from $8.1 million in Q1 2024, with an Adjusted EBITDA margin expanding to 64% [2][11] - The Gaming segment's Adjusted EBITDA increased by 43% to $9.3 million, supported by new terminal deployments in Greece and the UK [3][11] - The Virtual Sports segment's Adjusted EBITDA was $6.3 million, down 39% from $10.4 million, reflecting the challenges faced in the Brazilian market [11][4] Debt and Financing - The company entered into a commitment letter for £287.8 million in private credit facilities to refinance existing debt, which includes a new £17.8 million revolving credit facility and £270 million of senior secured term debt [6] - The refinancing is expected to close in early June 2025, with the new facilities bearing a SONIA-based floating interest rate [6] Strategic Initiatives - Inspired is focused on leveraging its diversified business model to drive growth in digital operations and enhance profitability in land-based segments [7] - The company is optimistic about the progress in its Hybrid Dealer rollout strategy and new partnerships, including a licensing agreement with the National Hockey League [2][4]