Core Viewpoint - Inspired Entertainment, Inc. has partnered with bet365 to launch the Hybrid Dealer Roulette game in the UK, marking a significant innovation in online gaming [1][4]. Group 1: Product Overview - Hybrid Dealer Roulette is a new online gaming product that combines casino and gameshow elements, designed to provide a live casino experience without the challenges of traditional live-dealer games [2]. - The game features high-quality Virtual CGI and pre-recorded real-life hosts, with a countdown timer for placing bets, ensuring all players see the same results simultaneously [2][3]. - This game is the second in the Hybrid Dealer series, showcasing advanced technology that allows for a realistic gaming experience without the need for dedicated studios and staffing [4]. Group 2: Market Position and Strategy - Inspired operates in approximately 35 jurisdictions worldwide, supplying gaming systems and content for around 50,000 gaming machines and virtual sports products through over 32,000 retail venues [5]. - The partnership with bet365 is aimed at enhancing the online casino experience, reflecting the company's commitment to innovation and player engagement [4][7]. - bet365 employs over 9,000 staff globally and offers a diverse range of gaming options, indicating a strong market presence and a focus on player satisfaction [7].

NEW YORK, Dec. 17, 2024 (GLOBE NEWSWIRE) -- Inspired Entertainment, Inc. ("Inspired" or the "Company") (NASDAQ:INSE), a leading provider of B2B gaming content and systems, is pleased to announce the extension of its partnership with global aggregation leader Aristocrat Interactive to provide the Virginia Lottery with a comprehensive suite of Inspired V-Lottery scheduled Virtual Sports games, set to transform the iLottery gaming landscape. The supply shall be made via NeoPollard Interactive LLC, jointly owne ...

Financial Data and Key Metrics Changes - Year-over-year EBITDA growth in Q3 was 13%, with EBITDA margins approaching the 40% target [5][11] - Cash balance at the end of Q3 was $36.5 million, up from $23.5 million at the end of Q2, with expectations to reach between $50 million and $55 million by the end of Q1 2025 [6][7] Business Line Data and Key Metrics Changes - Interactive business revenue increased by 40% year-over-year, with EBITDA up 47%, and adjusted EBITDA margin at 67.6% [12] - Virtual Sports segment saw a decline due to the loss of the largest customer, but recurring revenue from other customers grew by 11% year-over-year [17] - Gaming segment revenue, excluding low-margin sales, increased by 4% year-over-year, with EBITDA rising by 29% [19] - Leisure segment revenue was up 5% year-over-year, with EBITDA increasing by 17% [23] Market Data and Key Metrics Changes - The UK market is stabilizing and showing growth, with the company gaining market share as smaller players exit [36][37] - The company is expanding into new markets, including Brazil and South Africa, which are expected to contribute to growth [12][16] Company Strategy and Development Direction - The company aims for a 40% EBITDA margin, driven by a shift towards digital-focused growth and cost-saving initiatives [11][39] - Plans to enhance product offerings, including new games and studio capacity, to support growth in the Interactive segment [14][16] - The company is reviewing strategic options for its holiday parks business while focusing on improving operational efficiencies in other segments [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the Interactive segment and the overall business strategy, anticipating continued improvement in financial results [24][40] - The company is optimistic about the impact of new products and market expansions on future performance [12][16] Other Important Information - James Richardson will join as the new CFO starting January 1, 2025, bringing extensive experience in financial reporting and governance [9] - The company is implementing a plan to consolidate and reengineer remaining retail businesses to offset EBITDA from the holiday parks business [8] Q&A Session Summary Question: Thoughts on 2025 impact and consensus - Management is comfortable with the consensus for 2025, citing multiple growth drivers [26][28] Question: Update on product refreshes in the gaming market - Expected uplift from the William Hill conversion similar to previous conversions, with positive performance in North America [30][31] Question: Insights on bespoke content with FanDuel - A mix of bespoke and standard products will be offered, with bespoke content requiring upfront fees [33] Question: Regulatory environment and market share in the UK - The UK market is growing, and the company is gaining market share due to a strong retail presence [36][37] Question: Timeline for achieving 40% consolidated margin - The shift towards digital and high-margin segments will drive margins, but timing is uncertain [38][40] Question: Customer engagement with Hybrid Dealer - Positive metrics on active and repeat players indicate strong performance, with more data expected in the coming quarters [42] Question: Use of debt for share buybacks - Management will not incur additional debt for share buybacks, focusing on organic growth and acquisitions instead [44][45] Question: Challenges in integrating Interactive content with Virtual Sports - Regulatory issues and the need for major players to adopt Virtual Sports are key challenges [46][47]

Revenue Performance - Third Quarter Revenue reached $78.0 million, a 4% increase from $74.8 million in the same period last year[1] - Total revenue for Q3 2024 was $78.0 million, a decrease of 20% compared to $97.5 million in Q3 2023[23] - Service revenue increased to $73.8 million in Q3 2024, up from $70.7 million in Q3 2023, representing a growth of 4%[23] - Product sales significantly dropped to $4.2 million in Q3 2024 from $26.8 million in Q3 2023, a decline of 84%[23] - The company reported total revenue of $78.0 million for the three months ended September 30, 2024, with Gaming contributing $23.3 million, Virtual Sports $11.2 million, Interactive $10.2 million, and Leisure $33.3 million[31] - For the nine months ended September 30, 2024, total revenue reached $216.7 million, with Gaming at $74.4 million (34.3% of total revenue) and Leisure at $79.3 million (36.6% of total revenue)[33] Segment Performance - Interactive revenue grew by 40% year-over-year, contributing $10.2 million to total revenue[8] - The EBITDA margin for the Interactive segment expanded to 67.6%, driven by strong growth in key markets[2] - The Gaming segment's EBITDA increased by 29% year-over-year, reaching $10.7 million despite modest revenue growth[8] - Virtual Sports revenue experienced a decline of 16%, totaling $11.2 million, while maintaining industry-leading margins of nearly 79%[4] - Leisure segment revenue grew by 5%, with an EBITDA margin improvement to 30.6%[5] - Adjusted EBITDA for the Gaming segment was $10.7 million, while the total adjusted EBITDA for the company was $30.1 million for the three months ended September 30, 2024[26] - The adjusted EBITDA margin for the Gaming segment was 29.2%, while Virtual Sports and Leisure segments contributed 26.3% and 19.9%, respectively, highlighting the varying profitability across segments[31] - Adjusted EBITDA for the nine months ended September 30, 2024, was $71.8 million, with Gaming contributing $28.3 million and Virtual Sports contributing $28.8 million[33] Financial Metrics - Adjusted EBITDA for the third quarter was $30.1 million, reflecting a 13% increase from $26.7 million in 2023[8] - Net income for Q3 2024 was $3.4 million, unchanged from Q3 2023, while the year-to-date net income was a loss of $0.3 million compared to a profit of $7.6 million in the same period last year[23] - Total assets increased to $388.6 million as of September 30, 2024, compared to $340.9 million at the end of 2023, reflecting a growth of 14%[24] - Current liabilities rose to $109.3 million in Q3 2024 from $100.7 million at the end of 2023, an increase of 6%[24] - Long-term debt increased to $312.4 million as of September 30, 2024, up from $295.6 million at the end of 2023, a rise of 6%[24] - Cash provided by operating activities decreased to $24.8 million in Q3 2024 from $43.0 million in Q3 2023, representing a decline of approximately 42.5%[25] - Total cash and restricted cash at the end of the period was $36.5 million, up from $26.4 million at the end of the previous year[25] - The company incurred stock-based compensation expense of $5.7 million in Q3 2024, down from $9.3 million in Q3 2023[25] - Net cash used in investing activities was $(29.5) million for the three months ended September 30, 2024, compared to $(39.4) million in the same period of 2023[25] - The company reported a decrease in accounts receivable by $(4.4) million in Q3 2024, compared to an increase of $11.7 million in Q3 2023[25] - Cash paid for interest during the period was $12.8 million, slightly up from $12.1 million in the previous year[25] - The company reported a total of $1.6 million in cash paid for income taxes during Q3 2024, down from $4.8 million in Q3 2023[25] Strategic Initiatives - The company announced a licensing agreement with the NHL to develop interactive Virtual Sports games, enhancing its sports partnerships[7] - A strategic partnership with FanDuel was established to integrate Inspired's Hybrid Dealer suite and develop proprietary content[7] - The company is focused on expanding digital businesses and optimizing land-based operations to drive sustainable growth[7] - The company anticipates potential new customers and expects to execute its strategic plan effectively in the upcoming quarters[20] - The company continues to focus on market expansion and new product development to drive future growth[32] Cost Management - Costs related to group restructuring amounted to $2.8 million for the nine months ended September 30, 2024, compared to $3.7 million in the same period of 2023, showing a reduction in restructuring expenses[30] - Stock-based compensation expense for the nine months ended September 30, 2024, totaled $5.7 million, compared to $9.3 million in the prior year, reflecting a decrease of approximately 39%[28] - Interest expense for the nine months ended September 30, 2024, was $20.9 million, consistent with the previous year, indicating stable financing costs[28] - The company incurred costs of group restatement totaling $10.7 million for the nine months ended September 30, 2024, which were not present in the prior year[30] Exchange Rates - The exchange rate for USD to GBP was reported at 1.30 for the three months ended September 30, 2024[26] - The exchange rate for $ to £ was 1.28 for the nine months ended September 30, 2024, compared to 1.24 for the same period in 2023, indicating a strengthening of the dollar against the pound[29]

Revenue Performance - Service revenue for the three months ended September 30, 2024, was $73.8 million, up from $70.7 million in the same period last year, representing a growth of 3.7%[8] - Total revenue for the three months ended September 30, 2024, was $78.0 million, with service revenue contributing $73.8 million and product sales $4.2 million[36] - Total revenue for the nine months ended September 30, 2024, was $216.7 million, compared to $241.8 million for the same period in 2023, reflecting a decrease of 10.4%[8] - Total revenue for the nine months ended September 30, 2024, was $216.7 million, with service revenue at $196.7 million and product sales at $20.0 million[39] - Total revenue for the nine months ended September 30, 2023, was $241.8 million, with service revenue contributing $195.7 million, representing a significant portion of total revenue[40] Income and Expenses - Net income for the three months ended September 30, 2024, was $3.4 million, consistent with the same period last year, while the net income for the nine months was a loss of $0.3 million compared to a profit of $7.6 million in 2023[8] - Selling, general, and administrative expenses for the three months ended September 30, 2024, increased to $31.4 million from $26.9 million, marking a rise of 16.7%[8] - The company reported a net operating income of $11.9 million for the three months ended September 30, 2024, compared to $12.2 million in the same period last year, a decline of 2.5%[8] - The company reported a net operating loss of $30.6 million for the nine months ended September 30, 2023[40] - The company recorded stock-based compensation expenses of $1.8 million for the three-month period, down from $3.3 million in the same period of 2023[60] Cash Flow and Liquidity - Cash flows from operating activities for the nine months ended September 30, 2024, amounted to $24.8 million, a decrease from $43.0 million in the prior year[12] - The company had cash on hand of $35.7 million as of September 30, 2024, with additional working capital of $20.4 million[12] - The company reported a working capital outflow of $16.4 million for the nine months ended September 30, 2024, compared to an outflow of $8.0 million for the same period in 2023[111] - Net cash provided by operating activities decreased to $24.8 million for the nine months ended September 30, 2024, down from $43.0 million in the prior year, representing an $18.2 million decline[108] - Net cash used in investing activities was $29.5 million for the nine months ended September 30, 2024, a decrease of $9.9 million compared to the previous year[109] Assets and Liabilities - The accumulated deficit as of September 30, 2024, was $508.9 million, compared to $508.6 million at the beginning of the year, indicating a slight increase in the deficit[9] - Total inventories as of September 30, 2024, amount to $31.6 million, a slight decrease from $32.3 million on December 31, 2023[15] - Accounts payable and accrued expenses totaled $60.4 million as of September 30, 2024[17] - The total contractual obligations as of September 30, 2024, amounted to $435.6 million, with $65.5 million due within one year[116] - The company reported a net leverage ratio of 3.1x as of September 30, 2024, in compliance with the financial covenants[20] Segment Performance - The company operates across four segments: Gaming, Virtual Sports, Interactive, and Leisure, with performance evaluated based on revenue streams[35] - Segment operating income for Gaming was $4.4 million, Virtual Sports $7.4 million, Interactive $5.5 million, and Leisure $6.9 million, totaling $11.9 million[36] - The Interactive segment went live with seventeen new operators during the three months ended September 30, 2024, increasing the total number of customers by twelve overall[52] - Total Gaming Revenue for the three-month period ended September 30, 2024, was £17.9 million, a decrease of 50% compared to £35.5 million for the same period in 2023[71] - Total revenue for the Interactive segment for the three-month period was £7.8 million, an increase of 36.8% from £5.7 million in the same period last year[90] Foreign Currency and Exchange Rates - The company experienced a foreign currency translation loss of $6.3 million for the nine months ended September 30, 2024, compared to a gain of $3.6 million in the same period last year[9] - The average GBP:USD exchange rate for the three-month period ended September 30, 2024, was 1.30, compared to 1.27 for the same period in 2023, indicating currency fluctuations impact[51] - The exchange rate for USD to GBP was reported at 1.30, impacting revenue calculations[102] - A hypothetical 10% adverse change in the Euro and US Dollar relative to GBP would result in favorable translation adjustments of approximately $2.3 million and $1.3 million, respectively[128] Pension and Taxation - The effective income tax rate for Q3 2024 was 23.3%, resulting in an income tax expense of $1.0 million, compared to 37.6% and $2.0 million in Q3 2023[28] - The company maintained a full valuation allowance on deferred tax assets as of September 30, 2024, indicating potential future recognition of these assets[28] - The company expects to eliminate the defined benefit pension scheme funding shortfall by October 31, 2026, following a recovery plan implemented in June 2022[33] - The company reported a funding shortfall in its defined benefit pension scheme as of March 31, 2021, which was finalized in June 2022[33] Compliance and Governance - The company's disclosure controls and procedures were not effective at the reasonable assurance level as of September 30, 2024, due to identified material weaknesses[130] - Management is redesigning and implementing existing and additional controls to remediate the identified material weaknesses in disclosure controls[130] - The company must provide unaudited quarterly financial statements within 60 days after the close of the quarter, which was met following a restatement of previously reported financials[114] - The company reported no new legal proceedings or updates to prior disclosures[133]

Core Insights - Inspired Entertainment, Inc. reported a third quarter revenue of $78.0 million, a 4% increase year-over-year, primarily driven by record Interactive revenue, which grew 40% [1][9] - The company achieved a net income of $3.4 million and an adjusted EBITDA of $30.1 million, reflecting a 13% increase from the previous year [1][9] - James Richardson has been appointed as the new Chief Financial Officer, effective January 1, 2025 [1][6] Financial Performance - Total revenue for the Gaming segment (excluding low margin hardware sales) was $23.3 million, up 4% from $22.4 million in 2023 [9] - Virtual Sports revenue decreased by 16% to $11.2 million, while Interactive revenue surged to $10.2 million, marking a 40% increase [9] - Leisure segment revenue grew by 5% to $33.3 million, with an EBITDA margin improvement to 30.6% [5][9] Segment Highlights - The Interactive segment's EBITDA increased by 47% year-over-year, with an EBITDA margin of 67.6%, showcasing strong growth in key markets such as the UK, North America, and mainland Europe [2][9] - The Gaming segment saw a 29% increase in EBITDA, attributed to an improved revenue mix, despite modest revenue growth [3][9] - Virtual Sports maintained high margins of nearly 79%, with ongoing investments in strategic growth initiatives, particularly in Brazil [4][9] Strategic Developments - The company successfully launched the MGM Bonus City game with BetMGM in Michigan and is advancing its Hybrid Dealer Roulette game in Canada with Loto-Québec [2][8] - A strategic partnership with FanDuel was announced to integrate Inspired's Hybrid Dealer suite and develop proprietary content [2][8] - A licensing agreement with the National Hockey League was established to develop interactive Virtual Sports games featuring NHL branding [7][8] Future Outlook - The company remains focused on expanding its digital businesses, optimizing land-based operations, and investing in new market opportunities [7] - The strong performance in the Interactive segment and improving profitability in Gaming provide confidence in sustainable growth and shareholder value creation [7]

Core Insights - Inspired Entertainment, Inc. has announced a long-term extension of its Virtual Sports partnership with OPAP, Greece's leading gaming company, which has been in place since 2017 [1][3] - The partnership allows Inspired to continue providing a diverse portfolio of Virtual Sports products across OPAP's network of over 3,000 retail venues in Greece [1][2] Company Overview - Inspired offers a wide range of gaming content, systems, and solutions for regulated gaming, betting, lottery, social, and leisure operators globally [6] - The company operates in approximately 35 jurisdictions and supplies gaming systems for around 50,000 gaming machines, as well as virtual sports products through more than 32,000 retail venues [6] Product Offerings - Inspired currently provides five Virtual Sports V-Play products for OPAP, including Soccer 3, Matchday, NBA Re-Play, Greyhounds, and Marbles [2] - The Virtual Sports offerings have been successful in enhancing the retail gaming experience in Greece [3] Future Outlook - Both Inspired and OPAP are optimistic about the future of Virtual Sports and the potential for continued success through innovation and collaboration [5]

NEW YORK, Oct. 02, 2024 (GLOBE NEWSWIRE) -- Inspired Entertainment, Inc. ("Inspired" or the "Company") (NASDAQ: INSE), a leading provider of B2B gaming content, systems, and solutions, announced Loto-Québec will be the first customer in Canada to offer the Hybrid Dealer Roulette game in the fourth quarter of 2024. Hybrid Dealer is a new, US patented, game-changing online product category that offers players casino and gameshow content without the challenges associated with live-dealer products. Hybrid Deale ...

Financial Data and Key Metrics Changes - The company reported a sequential EBITDA growth of 56.5% from Q1 2024, exceeding initial expectations of at least 50% growth [3][4] - Overall EBITDA performance across the business increased by 57% in Q2 compared to Q1 [17] Business Line Data and Key Metrics Changes - The Interactive segment saw a 40% year-over-year revenue increase and a 6% adjusted EBITDA growth year-over-year, with a sequential revenue growth of 16% and adjusted EBITDA growth of 39% [7] - Virtual Sports maintained high EBITDA margins exceeding 80%, although recent revenues have plateaued due to a lack of product and geographic expansion [4][12] Market Data and Key Metrics Changes - The company achieved an 8% market share for slots in the U.K., quadrupling its share from previous years, and increased its blended share of table games and slots from 5.4% to 7% year-over-year [8] - The company is expanding into new markets, including Brazil and South Africa, which are expected to provide growth opportunities [9] Company Strategy and Development Direction - The company is focusing on expanding its interactive portfolio through new products and geographic expansion, particularly with the Harbir dealer initiative [4] - Plans to improve the profitability of the Halide Park business are underway, aiming to enhance overall EBITDA margins [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of 2024, expecting revenue and EBITDA to exceed the first half due to recent product and geographic expansions [5][13] - The company remains optimistic about the performance of the hybrid dealer segment, which is anticipated to become a significant contributor to revenue in 2025 [10][32] Other Important Information - The company is transitioning to fully outsourced manufacturing, which is expected to save approximately $3 million annually [17] - The company is also consolidating logistics facilities to generate additional savings [17] Q&A Session Summary Question: Thoughts on Inspired's positioning regarding M&A and take privates in the gaming tech space - Management emphasized focusing on business performance and growth initiatives rather than M&A activities [20] Question: Capital allocation thoughts, specifically regarding share repurchases - Management indicated a desire to repurchase shares, noting that liquidity has been impacted but expects significant cash increases in Q4 [22] Question: Runway with customers or operators not currently engaged in the U.S. Gaming market - Management stated that there are not many operators left to engage with in the U.S. market, focusing instead on new geographies like Brazil [25] Question: Update on the Greek market performance - Management acknowledged a softening market in Greece but expects new equipment installations to improve market share [27] Question: Expectations for the hybrid dealer segment's growth - Management noted that demand currently exceeds capacity and sees significant growth potential in the hybrid dealer segment [29][30] Question: Updates on the lottery segment opportunities - Management expressed bullishness on the lottery market and indicated potential announcements regarding new customers in the near future [33] Question: Confidence in maintaining revenue growth in Interactive - Management is optimistic about sustaining a growth trajectory of around 30% or higher, supported by recent performance [36]

Core Insights - Inspired Entertainment (INSE) reported a revenue of $75.6 million for the quarter ended June 2024, reflecting a year-over-year decline of 6% and an EPS of $0.07 compared to $0.14 a year ago, with a revenue surprise of +1.75% over the Zacks Consensus Estimate of $74.3 million and an EPS surprise of -36.36% compared to the consensus estimate of $0.11 [1] Revenue Breakdown - Gaming revenue was $27.10 million, exceeding the two-analyst average estimate of $26 million, but showing a year-over-year decline of 14% [3] - Leisure revenue reached $27.40 million, surpassing the two-analyst average estimate of $26.25 million, with a year-over-year increase of 3.4% [4] - Interactive revenue was reported at $9.40 million, exceeding the average estimate of $8.25 million, representing a year-over-year increase of 27% [5] - Virtual Sports revenue was $11.70 million, below the average estimate of $13.80 million, indicating a year-over-year decline of 22% [6] Adjusted EBITDA Performance - Adjusted EBITDA for Interactive was $6.10 million, surpassing the average estimate of $5.10 million [7] - Adjusted EBITDA for Gaming was $10.30 million, slightly above the average estimate of $10.25 million [8] - Adjusted EBITDA for Corporate was -$6.60 million, better than the average estimate of -$7.35 million [9] - Adjusted EBITDA for Leisure was $6.10 million, exceeding the average estimate of $4.70 million [10] - Adjusted EBITDA for Virtual Sports was $9.60 million, below the average estimate of $11.65 million [11] Stock Performance - Shares of Inspired Entertainment have returned -11.5% over the past month, compared to the Zacks S&P 500 composite's -6.5% change, with the stock currently holding a Zacks Rank 3 (Hold) [11]