Inspired(US:INSE)2024-11-07 22:00Revenue 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]