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]

Core Insights - Inspired Entertainment, Inc. has announced a strategic partnership with Mecca Bingo to supply 170 advanced gaming machines, enhancing the gaming experience for customers [1][2][3] - The five-year agreement is valued at approximately $12.7 million, which includes installation and a full servicing package [2][3] - The partnership aims to support Mecca Bingo's commitment to innovation and excellence in the gaming sector [4] Company Overview - Inspired Entertainment provides a diverse portfolio of gaming content, technology, hardware, and services for regulated gaming and leisure operators globally [5] - The company operates in around 35 jurisdictions, supplying systems for approximately 50,000 gaming machines and various digital and virtual sports products [5]

Wall Street analysts expect Inspired Entertainment (INSE) to post quarterly earnings of $0.11 per share in its upcoming report, which indicates a year-over-year decline of 21.4%. Revenues are expected to be $74.3 million, down 7.6% from the year-ago quarter. The current level reflects no revision in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period. Before a company ...