Core Insights - Inspired Entertainment, Inc. has launched V-Play Football Brazil in partnership with EstrelaBet, enhancing its presence in the Brazilian gaming market [1][2][3] - The product is designed to resonate with Brazilian football culture, offering high-frequency, ultra-realistic match simulations for a dynamic betting experience [2][4] - The integration is facilitated by Altenar, a sportsbook platform provider, showcasing a collaboration that combines technology and local market insights [3][5] Company Overview - Inspired Entertainment is a leading B2B provider of gaming content, technology, hardware, and services, operating in approximately 35 jurisdictions worldwide [5] - The company supplies gaming systems for around 50,000 gaming machines and offers virtual sports products through over 32,000 retail venues [5] - Inspired's portfolio includes digital games for more than 170 websites and various amusement entertainment solutions [5] EstrelaBet Overview - EstrelaBet is recognized as a leading Brazilian gamingtech company, operating under a definitive license in the national iGaming market [7][8] - The company has received multiple awards, including "Best Sports Betting Operator in Brazil" and "Best Responsible Gambling Initiative" [7][10] - EstrelaBet emphasizes innovation, responsible gaming, and community engagement, partnering with FUMEC University to develop initiatives for problem gambling prevention [8][9]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's analysis of the company's financial condition and results of operations [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) The unaudited condensed consolidated financial statements for the six months ended June 30, 2025, show a total revenue of $140.7 million and a net loss of $7.9 million, with total assets increasing to $486.8 million and operating cash flow at $40.7 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $486.8 million, an increase from $438.4 million at December 31, 2024, driven by a rise in cash and long-term debt, resulting in a total stockholders' deficit of $9.5 million Condensed Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $46.3 | $29.3 | | Total current assets | $165.7 | $159.9 | | Total assets | $486.8 | $438.4 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $98.3 | $104.0 | | Long-term debt | $349.6 | $292.2 | | Total liabilities | $496.3 | $441.7 | | Total stockholders' deficit | $(9.5) | $(3.3) | [Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) For Q2 2025, total revenue was $80.3 million with a net loss of $7.8 million, while for H1 2025, revenue increased to $140.7 million, and net loss widened to $7.9 million Statement of Operations Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $80.3 | $74.8 | $140.7 | $137.0 | | Net Operating Income | $7.9 | $8.7 | $9.5 | $6.6 | | Net (Loss) Income | $(7.8) | $1.4 | $(7.9) | $(5.0) | | Net (Loss) Income per Share - Diluted | $(0.27) | $0.05 | $(0.27) | $(0.18) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to $40.7 million for H1 2025, with a net increase in cash of $17.0 million, ending the period with $46.3 million Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $40.7 | $3.6 | | Net cash used in investing activities | $(31.2) | $(19.2) | | Net cash provided by (used in) financing activities | $4.1 | $(0.5) | | **Net increase (decrease) in cash** | **$17.0** | **$(16.5)** | | **Cash, end of period** | **$46.3** | **$23.5** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail a major debt refinancing in June 2025, segment revenue growth in Interactive, declines in Virtual Sports, and a correction of immaterial errors in 2024 interim financials - On June 9, 2025, the company issued **£270.0 million ($370.0 million)** in new Series B Senior Notes due 2030, bearing a variable interest rate of SONIA plus a margin of **5.50% to 6.00%**[43](index=43&type=chunk)[47](index=47&type=chunk) - The proceeds from the new Senior Notes were used to refinance existing **£235.0 million** notes and **£15.0 million** in revolving credit loans[45](index=45&type=chunk) Revenue by Segment - Six Months Ended June 30 (in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Gaming | $48.9 | $49.4 | | Virtual Sports | $17.9 | $24.1 | | Interactive | $25.7 | $17.5 | | Leisure | $48.2 | $46.0 | | **Total** | **$140.7** | **$137.0** | - The company identified and corrected immaterial errors in its 2024 interim financial statements related to the classification of leases between operating and sales type, which resulted in a revision of previously reported revenue and net income[105](index=105&type=chunk)[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's discussion highlights a 7% increase in reported revenue for Q2 2025, driven by strong performance in Interactive and Leisure segments, offset by declines in Gaming and Virtual Sports, alongside a significant debt refinancing and improved liquidity [Overall Company Results](index=26&type=section&id=Overall%20Company%20Results) Q2 2025 saw a 7% revenue increase to $80.3 million but a 9% decrease in net operating income, while H1 2025 revenue grew 3% to $140.7 million with a 44% increase in net operating income Overall Company Performance - Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Reported Variance % | Functional Currency Variance % | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $80.3 | $74.8 | 7% | 2% | | Net Operating Income | $7.9 | $8.7 | (9)% | (7)% | | Net (Loss) Income | $(7.8) | $1.4 | (657)% | (571)% | - The decline in net operating income for Q2 2025 was predominantly due to increased depreciation and amortization expense, which rose by **$3.4 million** on a constant currency basis[146](index=146&type=chunk)[149](index=149&type=chunk) - For the six-month period, the growth in net operating income was mainly due to lower cost of product and non-staff related SG&A expenses, partially offset by higher depreciation[150](index=150&type=chunk) [Segment Results](index=30&type=section&id=Segment%20Results) Q2 2025 saw strong constant currency revenue growth in Interactive (38%) and Leisure (5%), offset by declines in Gaming (2%) and Virtual Sports (26%) due to regulatory changes - **Gaming:** Q2 revenue decreased **2%** (constant currency) due to a **$3.7 million** decline in product sales, partially offset by a **$3.1 million** increase in service revenue. The average installed base of terminals decreased by **2.7%** YoY[138](index=138&type=chunk)[156](index=156&type=chunk)[184](index=184&type=chunk) - **Virtual Sports:** Q2 revenue fell **26%** (constant currency) primarily due to new regulations and levies in the Brazilian market, leading to a **39%** drop in segment operating income[200](index=200&type=chunk)[201](index=201&type=chunk) - **Interactive:** Q2 revenue surged **38%** (constant currency) driven by growth in the UK and North America from new content and promotional activities. The number of live customers increased by **20.5%** YoY[204](index=204&type=chunk)[211](index=211&type=chunk) - **Leisure:** Q2 revenue increased **5%** (constant currency), attributed to the timing of a key public holiday in the UK. Operating income grew **7%** despite higher depreciation costs[223](index=223&type=chunk)[225](index=225&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA increased to $28.4 million for Q2 2025 and $46.8 million for H1 2025, primarily driven by the Interactive segment's performance Adjusted EBITDA by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gaming | $12.8 | $9.5 | $22.1 | $15.9 | | Virtual Sports | $6.6 | $9.6 | $12.9 | $20.0 | | Interactive | $9.1 | $6.1 | $16.8 | $10.5 | | Leisure | $7.7 | $6.1 | $9.4 | $7.9 | | Corporate | $(7.8) | $(6.6) | $(14.4) | $(14.3) | | **Total Adjusted EBITDA** | **$28.4** | **$24.7** | **$46.8** | **$40.0** | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved with cash rising to $46.3 million, following a major debt refinancing in June 2025 that established new Senior Notes and a revolving credit facility with financial covenants - Cash provided by operating activities for H1 2025 was **$40.7 million**, a substantial increase from **$3.6 million** in H1 2024, driven by strong collections on prior-year sales and favorable timing of supplier payments[238](index=238&type=chunk)[239](index=239&type=chunk) - In June 2025, the company refinanced its debt, issuing **£270.0 million** in Senior Notes and securing a new **£17.8 million ($24.4 million)** revolving credit facility, which was undrawn as of June 30, 2025[129](index=129&type=chunk)[249](index=249&type=chunk)[57](index=57&type=chunk) - New debt covenants require maintaining a maximum consolidated senior secured net leverage ratio of **5.0x** for the Senior Notes and **5.50x** for the RCF, tested quarterly starting Q3 2025[250](index=250&type=chunk)[251](index=251&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 faces interest rate risk from its new variable-rate debt and foreign currency exchange rate risk due to its GBP functional currency and USD reporting currency - The company's new **£270.0 million** debt is subject to a variable interest rate based on SONIA, exposing it to interest rate risk. A **1%** increase in floating rates would have resulted in an additional **$0.2 million** in interest expense for H1 2025[262](index=262&type=chunk)[263](index=263&type=chunk) - The company is exposed to foreign currency risk as its functional currency is GBP, but its reporting currency is USD. A **10%** weakening of GBP against the USD would favorably impact trading results by approximately **$0.9 million** but result in unfavorable translation adjustments of approximately **$4.9 million** in other comprehensive loss[268](index=268&type=chunk) [Controls and Procedures](index=47&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to previously identified material weaknesses, yet the financial statements are fairly presented - The company's Certifying Officers concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to previously disclosed material weaknesses[271](index=271&type=chunk) - Notwithstanding the ineffective controls, management asserts that the financial statements in this report are fairly presented in all material respects[272](index=272&type=chunk) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides information on legal proceedings, risk factors, and exhibits filed with the report [Legal Proceedings](index=48&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in routine legal matters, but management believes no current proceedings are material or will adversely affect financial condition or operations - The company states that it is not currently involved in any legal matters that it believes to be material[275](index=275&type=chunk) [Risk Factors](index=48&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company refers investors to the comprehensive risk factors detailed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There are no new risk factors disclosed in this report; the company refers to the risk factors detailed in its 2024 Form 10-K[276](index=276&type=chunk) [Exhibits](index=49&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including key agreements related to the June 2025 debt financing and officer certifications - Key exhibits filed include the Senior Notes Purchase Agreement and the Senior Facilities Agreement related to the June 2025 debt refinancing[282](index=282&type=chunk)

Group 1 - Inspired Entertainment reported a quarterly loss of $0.19 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.02, marking an earnings surprise of -850.00% [1] - The company posted revenues of $80.3 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 6.88% and showing an increase from $75.6 million year-over-year [2] - The stock has underperformed the market, losing about 2.5% since the beginning of the year compared to the S&P 500's gain of 7.1% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $84.52 million, and for the current fiscal year, it is $0.65 on revenues of $300.62 million [7] - The Zacks Industry Rank places Technology Services in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - EBITDA for Q2 2025 was $28.4 million, up 15% compared to Q2 2024, with EBITDA margins improving from 33% to 35% [5][19] - The Interactive business was the primary growth driver, with EBITDA growth of nearly 50% year over year [5][12] Business Line Data and Key Metrics Changes - The Interactive segment achieved its eighth consecutive quarter of over 40% year-over-year adjusted EBITDA growth, with an adjusted EBITDA margin expansion of 200 basis points to 67% [12][19] - Gaming EBITDA increased by 35% year over year, significantly driven by the performance of William Hill [17][19] - Virtual Sports EBITDA showed a sequential improvement, with expectations for continued growth in Q3 and Q4 [15][26] Market Data and Key Metrics Changes - Less than 10% of the U.S. population is in jurisdictions offering iGaming, compared to 70% for sports betting, indicating significant growth potential [6] - The company is seeing growth in Brazil, with a focus on launching additional operators and bespoke content [12][36] Company Strategy and Development Direction - The company is focusing on digital segments, aiming to improve cash conversion and EBITDA margins, with a target of approaching 40% [10][19] - The sale of the Holiday Park business is expected to enhance liquidity and shift the business mix further towards digital [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Interactive business, noting that it is still in its infancy and has considerable room for growth [6][12] - The company is cautiously optimistic about the Virtual Sports segment, expecting to see year-over-year growth by the end of the year [7][15] Other Important Information - The company successfully refinanced its credit facility and is in the process of converting floating rate debt to fixed rate [8][9] - A new contract was awarded to supply gaming machines for JenningsBet, the largest independent bookmaker in the UK [8][18] Q&A Session Summary Question: Can you elaborate on the momentum in hybrid dealer? - Management noted a good mix of customers, including tier one and tier two operators, with positive traction and increasing player volume [22][24] Question: Will Virtual Sports see a year-over-year increase in EBITDA? - Management indicated that while Q3 might not see significant growth, Q4 is expected to show improvements due to new product launches [26] Question: What drives the next leg of growth in the Gaming segment? - Management highlighted opportunities in Canadian provinces and Illinois, where the market is expanding and content refreshment is key [41][43] Question: What are the promising international markets for hybrid dealer? - Management stated that every market appears promising, with ongoing rollouts in North America, UK, Greece, and Brazil [45][46] Question: What are the capital deployment priorities? - The first priority is funding business growth, followed by debt reduction, with share repurchases considered afterward [52]

Revenue Performance - Total revenue for Q2 2025 was $80.3 million, a 7% increase year-over-year, primarily driven by record Interactive revenue, which rose 45%[7] - Total revenue for Q2 2025 was $80.3 million, a 7.4% increase from $74.8 million in Q2 2024[31] - Service revenue increased to $73.8 million in Q2 2025, up from $64.9 million in Q2 2024, representing a 13.7% growth[31] - For the three-month period ended June 30, 2025, the company reported a total revenue of $80.3 million, an increase from $74.8 million in the same period of 2024, representing a growth of 6.6%[44][45] - For the six-month period ended June 30, 2025, total revenue reached $140.7 million, compared to $137.0 million for the same period in 2024, indicating a growth of 2.7%[46][47] Adjusted EBITDA and Profitability - Adjusted EBITDA for Q2 2025 was $28.4 million, up 15% from the previous year, with Interactive Adjusted EBITDA increasing 49%[7] - The Interactive segment's Adjusted EBITDA margin expanded to 67%, reflecting a 200 basis point increase compared to the prior year[3] - Adjusted EBITDA for the three-month period was $28.4 million, up from $24.7 million in the same period of 2024, reflecting a year-over-year increase of 14.9%[44][45] - Adjusted EBITDA for the Gaming segment for the six months ended June 30, 2025, was $22.1 million, compared to $15.9 million in the same period of 2024, marking a 39% increase[39][40] - Adjusted net loss income for the three-month period was $(5.6) million, a decrease from an adjusted net income of $5.2 million in the prior year[42] Segment Performance - Gaming segment Adjusted EBITDA increased 35% year-over-year, supported by the successful rollout of Vantage cabinets with William Hill[4] - Leisure segment revenue increased by 11% year-over-year, with year-to-date Adjusted EBITDA up 19% compared to the same period last year[6] - The sports segment generated $9.2 million in revenue for the three months ended June 30, 2025, which is a decrease from $11.7 million in the same period of 2024[44][45] - Virtual Sports revenue saw a decline of 21% year-over-year, but localized content in Brazil is showing early promise[10] Financial Position and Debt - A comprehensive debt refinancing was completed, issuing £270 million in senior secured notes and securing a new £17.8 million revolving credit facility[7] - Long-term debt rose to $349.6 million as of June 30, 2025, compared to $292.2 million at December 31, 2024[33] - The company introduced $365.7 million in new debt during the six months ended June 30, 2025, while repaying $318.3 million of long-term debt, highlighting a strategic approach to financing[35] - The company reported a total of $17.4 million in cash paid for interest during the six months ended June 30, 2025, compared to $12.8 million in the same period of 2024, indicating higher financing costs[35] Cash Flow and Liquidity - Net cash provided by operating activities significantly improved to $40.7 million compared to $3.6 million in the prior year, indicating a substantial increase in operational efficiency[35] - The cash balance at the end of the period increased to $46.3 million from $23.5 million at the end of June 30, 2024, showing improved liquidity[35] - Cash and accounts receivable totaled $46.3 million and $49.0 million, respectively, as of June 30, 2025[33] Market and Strategic Developments - The company secured a five-year partnership with Jenningsbet to supply approximately 570 Vantage terminals[7] - The company launched Canada's first branded Hybrid Dealer Roulette game with Loto-Québec, marking a significant milestone in iGaming content expansion[12] - The Interactive segment's growth was driven by approximately 50% from North America, indicating strong market demand[12] - The company operates in approximately 35 jurisdictions worldwide, supplying gaming systems for around 50,000 gaming machines[26] Losses and Adjustments - Net loss for Q2 2025 was $7.8 million, compared to a net income of $1.4 million in Q2 2024[31] - For the six months ended June 30, 2025, the net loss increased to $7.9 million from a net loss of $5.0 million in the same period of 2024, representing a 58% increase in losses[35] - The company reported an adjusted net loss income per diluted share of $(0.19) for the three months ended June 30, 2025, compared to an adjusted net income per diluted share of $0.18 in the prior year[42] Exchange Rates - The exchange rate for the dollar to pound was reported at 1.34 for the three months ended June 30, 2025, impacting the financial results in GBP terms[37] - The exchange rate for USD to GBP was 1.34 for the three months ended June 30, 2025, compared to 1.26 for the same period in 2024[42]

Core Insights - Inspired Entertainment, Inc. reported strong financial results for the quarter ended June 30, 2025, with total revenue of $80.3 million, representing a 7% increase year-over-year, primarily driven by record Interactive revenue growth of 45% [8][10][9] Financial Performance - Total revenue for the quarter was $80.3 million, up from $74.8 million in the prior year, with Interactive revenue increasing to $13.6 million from $9.4 million [10][8] - Adjusted EBITDA reached $28.4 million, a 15% increase from $24.7 million in the previous year, with Interactive Adjusted EBITDA growing by 49% year-over-year [8][10] - The company reported a net loss of $7.8 million, compared to a net income of $1.4 million in the same quarter last year [10][8] Segment Performance - The Interactive segment was a key growth driver, with revenue increasing by 45% year-over-year, supported by strong performance in North America and the UK [2][9] - Gaming segment Adjusted EBITDA increased by 35% year-over-year, driven by the successful rollout of Vantage cabinets with William Hill [3][10] - Virtual Sports segment saw sequential growth in revenue and Adjusted EBITDA, with localized content in Brazil showing early promise [4][10] Strategic Developments - The company secured a five-year partnership with Jenningsbet to supply approximately 570 Vantage terminals, enhancing its market presence [8][13] - A comprehensive debt refinancing was completed, issuing £270 million in senior secured notes and securing a new £17.8 million revolving credit facility [8][9] Operational Highlights - The Interactive segment's Adjusted EBITDA margin expanded to 67%, reflecting the scalability of digital operations [2][10] - The Leisure segment performed steadily, with year-to-date revenue up 5% and Adjusted EBITDA up 19% compared to the same period last year [5][10]

Core Insights - Inspired Entertainment, Inc. has appointed Aimee Remey as Vice President of Investor Relations to enhance engagement with the investment community and support business growth [1][2][3] Group 1: Company Overview - Inspired Entertainment is a leading B2B provider of gaming content, technology, hardware, and services, operating in approximately 35 jurisdictions worldwide [4] - The company supplies gaming systems and associated terminals for around 50,000 gaming machines and offers virtual sports products through over 32,000 retail venues [4] - Inspired's portfolio includes digital games for more than 170 websites and amusement entertainment solutions with over 16,000 installed terminals [4] Group 2: Leadership and Strategy - Aimee Remey brings over two decades of experience in the gaming industry and previously served as Vice President of US Investor Relations at Entain Group [2][3] - Remey's appointment is part of Inspired's strategy to scale its business and deepen relationships with the financial community [3] - The leadership team, including President and CEO Brooks Pierce, expresses confidence in Remey's qualifications and her understanding of the company's strategy [3]

Core Insights - Inspired Entertainment, Inc. has secured a significant five-year partnership with Jenningsbet, the largest independent retail bookmaker in the UK, to supply its Vantage terminals to approximately 144 shops, totaling around 570 terminals [1][2] Company Overview - Inspired Entertainment is a leading B2B provider of gaming content, technology, hardware, and services, operating in approximately 35 jurisdictions worldwide [3] - The company supplies gaming systems and associated terminals for around 50,000 gaming machines and offers virtual sports products through more than 32,000 retail venues [3] Partnership Details - The rollout of the Vantage terminals is scheduled to commence in Q4 2025, highlighting the company's commitment to providing top-tier gaming solutions [1][2] - Both companies expressed excitement about the partnership, emphasizing the alignment with their goals of enhancing customer experience and industry leadership [2]

Group 1 - Inspired Entertainment (NASDAQ: INSE) operates in the business-to-business (B2B) segment of the casino gaming industry, providing gaming machines, technology, and related services to both online and land-based casino operators [1] - INSE stock may represent a notable investment opportunity among various companies in the gaming machine sector [1]

Core Insights - Inspired Entertainment, Inc. has expanded its long-term partnership with William Hill, enhancing their collaboration in the UK retail betting market [1][5] - The contract extension includes a comprehensive upgrade to William Hill's Virtual Sports offerings, integrating new and upgraded events into their broadcast networks [2][4] - Approximately 300 new Virtual Sports events will be added daily, increasing entertainment and betting opportunities for retail customers [3] Company Overview - Inspired is a leading B2B provider of gaming content, technology, hardware, and services, operating in around 35 jurisdictions worldwide [6] - The company supplies gaming systems and associated terminals for approximately 50,000 gaming machines and virtual sports products through over 32,000 retail venues [6]