Financial Data and Key Metrics Changes - The company reported a full-year EBITDA of $111 million, an 11% increase over 2024, with an EBITDA margin of 37% [19] - The fourth quarter EBITDA margin reached a record 42%, the highest in the company's history [5] - The company is projecting 2026 EBITDA guidance of $112 million to $118 million, with a midpoint of $115 million representing low double-digit growth over 2025 [6][19] Business Line Data and Key Metrics Changes - The interactive business grew revenue and EBITDA by 53% and 60% respectively in the fourth quarter [4] - More than 80% of the company's revenue is recurring, indicating a stable revenue stream [9] - The digital business accounted for 51% of EBITDA in 2025 and is expected to grow to over 60% by 2027 [19][20] Market Data and Key Metrics Changes - The company is experiencing strong growth in the North American market, particularly with the launch of its Virtuals business with BetMGM [10] - iGaming is more than three times the size of sports betting in states where they compete head-to-head, presenting a significant opportunity for the company [12] Company Strategy and Development Direction - The company is focusing on an asset-light business model, which is positively impacting free cash flow and is expected to continue through 2026 [7][9] - The company plans to combine its gaming and remaining leisure businesses into one reporting entity called Retail Solutions, simplifying its story and reflecting its current management structure [20] - The company is targeting to de-leverage to 2.5-3 times net leverage by year-end 2026 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing momentum of the interactive business, with no signs of slowing down [11][35] - The company is optimistic about the potential for additional states to legalize iGaming, which could significantly enhance growth [12] - Management noted that the impact of tax changes in the UK is manageable and that operators are adjusting their strategies accordingly [24][25] Other Important Information - The company launched a cloud-based lottery platform, which is expected to generate significant revenue in the coming years, particularly outside the U.S. [61][63] - The company is focused on maintaining strong relationships with key customers, which is crucial for contract renewals and product innovation [9] Q&A Session Summary Question: Impact of UK tax changes on guidance - Management indicated that UK operators are adjusting their RTP and bonusing structures to mitigate the impact of tax changes, and they feel comfortable with the expected outcomes [24][25] Question: Capital allocation strategy amid changing valuations - Management acknowledged the potential for share repurchase but emphasized a focus on deleveraging, while also considering stock valuations in their asset allocation [29][30] Question: Expectations for iGaming market share growth - Management noted that the momentum in the interactive business is expected to continue, with strong performance from major customers [36][38] Question: Retail strategies in response to tax changes - Management stated that operators are looking to balance online and retail business to mitigate tax impacts, with some lower-performing shops being taken over by independent operators [42][45] Question: Virtual Sports revenue expectations - Management acknowledged a mixed performance in Virtual Sports but expressed confidence in margin sustainability and ongoing revenue growth initiatives [46][49]

Financial Data and Key Metrics Changes - The company reported a full-year EBITDA of $111 million, an 11% increase over 2024, with an EBITDA margin of 37% [19] - The fourth quarter EBITDA margin reached a record 42%, marking a significant improvement [5] - The company is projecting 2026 EBITDA guidance of $112 million to $118 million, indicating low double-digit growth over 2025 [5][19] Business Line Data and Key Metrics Changes - The interactive business grew revenue and EBITDA by 53% and 60% respectively in the fourth quarter [4] - The digital business accounted for 51% of EBITDA, with expectations to grow to over 60% by 2026 [19] - The company is focusing on a CapEx-light business model, which is expected to improve cash flow significantly [9] Market Data and Key Metrics Changes - The company is optimistic about expanding its footprint in North America, particularly in Illinois, where it has strong relationships with key customers [12] - iGaming is projected to be more than three times the size of sports betting in states where they compete directly, presenting a significant opportunity [18] Company Strategy and Development Direction - The company is transforming towards a higher growth, higher margin, and less capital-intensive business model [21] - A new cloud-based lottery platform has been launched, with plans to expand its market presence outside the U.S. [63] - The company is combining its gaming and leisure businesses into one reporting entity called Retail Solutions to reflect its current management structure [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum, particularly in the interactive segment, with no signs of slowing down [34][70] - The company is prepared for potential impacts from tax changes in the UK, with strategies in place to mitigate effects [25] - Management remains optimistic about the company's ability to navigate challenges in the operating environment, including geopolitical factors [56] Other Important Information - The company is targeting to reduce net leverage to 2.5-3 times by year-end 2026, which may lead to lower interest rates and better financing options [6] - The company has secured long-term contracts with major customers like bet365 and Entain, ensuring a stable revenue stream [48] Q&A Session Summary Question: Impact of UK tax changes on guidance - Management indicated that customers are adjusting their RTP and bonusing structures to mitigate tax impacts, and they feel comfortable with the expected outcomes [25] Question: Capital allocation strategy amid changing valuations - Management acknowledged the potential for stock repurchase or acquisitions but emphasized a focus on deleveraging at present [28] Question: Expectations for digital business growth - Management confirmed ongoing momentum in the interactive business and highlighted opportunities in new markets like Brazil [34] Question: Retail vs. online marketing strategies - Management noted that operators are looking to balance their marketing strategies between retail and online to mitigate tax impacts [44] Question: Performance of Virtual Sports and Bet Builder product - Management reported modest growth in the Bet Builder product and acknowledged some softening in the Brazil market, but remains optimistic about margin sustainability [50]

Core Viewpoint - Inspired Entertainment, Inc. has announced a multi-year extension of its Virtual Sports agreement with bet365, enhancing their partnership and focusing on innovation in Virtual Sports [1][5]. Group 1: Partnership Details - The extension allows Inspired to collaborate with bet365 to introduce Virtual Sports innovations, including a new Virtual Soccer product with Bet Builder functionality, timed for the 2026 FIFA World Cup [2][5]. - The Bet Builder feature enables players to create personalized wagers by combining multiple outcomes, enhancing the betting experience [3][4]. Group 2: Strategic Importance - The introduction of Bet Builder is aimed at improving player retention and aligning Virtual Sports more closely with live sports betting mechanics, setting a new engagement benchmark [4]. - Inspired's President and CEO emphasized the importance of this partnership in delivering products that resonate with players and provide value for operators during major sporting events [5]. Group 3: Company Background - Inspired Entertainment is recognized for its innovative content, technology, and services for gaming, betting, and lottery operators globally, with a focus on delivering consistent performance across various gaming environments [6]. - The company’s integrated approach helps operators enhance their offerings and drive player engagement [6].