Inspired(US:INSE)2024-11-07 22:46Revenue 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]