Inspired(US:INSE)2024-04-15 20:02Financial Performance - Total revenue for the twelve-month period ended December 31, 2023, was $323.0 million, an increase of 15% compared to $281.6 million for the same period in 2022[27] - Net income for the twelve-month period ended December 31, 2023, was $7.6 million, a decrease of 64% from $20.6 million in 2022[27] - The Company reported a decrease in revenue of $0.5 million or 0.8% for the twelve-month period ended December 31, 2023[79] - Adjusted Revenue, excluding low margin gaming sales, was $292.4 million for 2023, compared to $281.6 million in 2022, indicating a growth of 3.0%[95] - Adjusted EBITDA for the twelve months ended December 31, 2023, was $99.0 million, compared to $43.7 million in 2022, reflecting a significant increase of 126.5%[95] Revenue Breakdown - Service revenue increased by 5% to $261.2 million, while product revenue surged by 86% to $61.8 million[27] - Total Gaming Revenue for the year ended December 31, 2023, was £114.1 million, an increase of £23.7 million or 26.2% compared to £90.4 million in 2022[67] - Gaming Participation Revenue increased to £44.3 million, up £0.8 million or 1.8% from £43.5 million in 2022[67] - Total Gaming Recurring Revenue was £61.6 million, reflecting a growth of £0.8 million or 1.3% from £60.8 million in the previous year[67] Expenses and Costs - Cost of sales, excluding depreciation and amortization, rose by $32.1 million, or 34%, driven by a $29.7 million increase in cost of product[31] - Selling, general and administrative expenses increased by $12.5 million, or 13.7%, compared to the previous year[32] - Stock-based compensation expense increased by 66.7% to $1.0 million compared to $0.6 million in the previous year[78] - Net Operating Income for the year ended December 31, 2023, was $6.8 million, a decrease of $3.4 million or 34.3% from $9.9 million in 2022[78] Cash Flow and Investments - Cash flow from operating activities showed a working capital outflow of $9.0 million for 2023, an improvement from a $44.5 million outflow in 2022[110] - Net cash utilized in investing activities increased by $15.8 million to $48.4 million in 2023, driven by higher spending on plant and equipment, including the installation of 2,500 terminals in Greece[108] - The company had a working capital of $51.8 million, which includes a non-cash settled item of $5.6 million of deferred income[884] Assets and Liabilities - Non-current assets as of December 31, 2023, were 71% attributable to the UK, 12% to Greece, and 17% to the rest of the world[19] - The Company’s current liabilities total $100.7 million, compared to $74.9 million in the previous period[874] - The total contractual obligations as of December 31, 2023, amounted to $408.8 million, with $61.9 million due within one year[116] Goodwill and Impairment - Total goodwill as of December 31, 2023, is allocated as follows: Virtual Sports $44.8 million, Interactive $1.8 million, Gaming $9.3 million, and $2.9 million for another Gaming unit, with no goodwill remaining in the Leisure unit[120] - The annual goodwill impairment test concluded that the fair values of all reporting units substantially exceeded their carrying values, indicating no need for further assessment[121] - The company has determined there were no indicators of impairment for goodwill as of December 31, 2023, 2022, and 2021[906] Foreign Exchange and Financial Instruments - Interest expense increased by $2.0 million primarily due to foreign exchange movements and the termination of swaps[33] - A hypothetical 10% adverse change in the value of the Euro and USD relative to GBP would result in translation adjustments of approximately $1.1 million favorable and $2.2 million unfavorable, respectively, recorded in trading operations[128] - The Company’s Euro functional currency net assets total approximately $18.3 million, while USD functional currency net liabilities total approximately $7.4 million[861] Research and Development - Total research and development costs for the year ended December 31, 2023, amounted to $20.3 million, an increase of 11% from $18.3 million in 2022[896] - Software development costs capitalized during the year ended December 31, 2023, were $7.5 million, up from $6.9 million in 2022, reflecting a 9% increase[896] Revenue Recognition - Revenue recognition is based on the satisfaction of performance obligations, with transaction prices allocated to each obligation based on standalone selling prices[917] - The company recognizes revenue over time for performance obligations that enhance an asset controlled by the customer[923] - The company provides a hosted solution for Virtual Sports, which includes proprietary online and mobile turnkey solutions[928]