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]

Financial Data and Key Metrics Changes - The company reported Q3 adjusted EBITDA of $32.3 million and trailing 12-month adjusted EBITDA of $110 million, both exceeding consensus expectations [3][10] - The trailing 12-month revenue reached $310 million, with an adjusted EBITDA margin of 35% [16][19] Business Line Data and Key Metrics Changes - The interactive segment achieved over 40% year-over-year adjusted EBITDA growth for the ninth consecutive quarter, with October being the largest revenue month in the segment's history [7][10] - The virtual sports segment showed stabilization for the second consecutive quarter, with expectations for year-over-year growth in Q4 [7][10] Market Data and Key Metrics Changes - The company is gaining market share in the U.K. and North America, with strong performance noted in both regions [7][13] - In North America, performance in Illinois and key Canadian provinces reached the highest levels since product introduction [15] Company Strategy and Development Direction - The sale of the holiday parks business is a strategic move to enhance adjusted EBITDA margins, reduce capital expenditures, and lower headcount by nearly 40% [8][19] - The company plans to increase game deliveries through a new interactive studio to meet customer demand for more content [11][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential tax changes in the U.K. gaming industry, citing past experiences with similar challenges [5][6] - The company anticipates significant operating leverage from the expansion of iGaming states, viewing it as a transformational opportunity [11][19] Other Important Information - A $25 million share buyback plan has been reauthorized as part of the company's future plans [8][19] - The company is focusing on organic growth without immediate expectations of M&A impacts, although it continues to evaluate potential tuck-in acquisitions [20][27] Q&A Session Summary Question: Can you walk through the revenue growth and margin expectations? - Management indicated that the holiday parks business's divestiture is the main driver for projected revenue changes, while other segments are expected to grow [22][23] Question: What gives confidence in the virtual sports segment's growth? - Adjustments with major customers and new customer additions in Brazil and Turkey are expected to drive growth in the virtual sports segment [24][25] Question: Can you elaborate on M&A strategy? - The company is focused on tuck-in acquisitions that enhance existing operations, avoiding large diversification deals [26][27] Question: What is the status of the interactive studio? - The new interactive studio will be developed organically, with plans to enhance content offerings [34][35] Question: How does the company view share buybacks? - The share buyback will be opportunistic, balancing leverage reduction and potential M&A opportunities [37][39] Question: What is the outlook for the interactive business growth? - The company expects continued strong growth in the interactive segment, driven by increased game delivery and customer demand [48][49]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 was $30.9 million, up 22% from the previous year [6] - Full year adjusted EBITDA was $100.1 million, compared to $99.3 million for 2023 [6][7] - The company received a letter from the SEC indicating that their inquiry is now closed with no further action [7] Business Line Data and Key Metrics Changes - The Interactive business saw revenue and EBITDA growth of 45% and 105% respectively in Q4, accounting for approximately 22% of overall company EBITDA [8][9] - The Digital business is expected to approach 60% of EBITDA by year-end, driven by growth in Interactive and modest acceleration in Virtual Sports [12] - The land-based gaming segment had EBITDA growth of 42% year-over-year in Q4, attributed to gaming hardware sales [25] Market Data and Key Metrics Changes - The company noted that in states with both iGaming and Sports Betting, iGaming outperforms Sports Betting by a ratio of 4 or 5 to 1 [9] - The company is optimistic about the potential growth in the Brazilian market, which is expected to become a significant market for them [53] Company Strategy and Development Direction - The company is focusing on enhancing product development in the Virtual Sports segment to replicate the success seen in Interactive [75] - There is a strategic review ongoing for the holiday parks business, with a cautious optimism about a favorable conclusion [37] - The company is actively looking for M&A opportunities that fit their criteria, although nothing is currently on the horizon [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their business structure, with over 85% of revenue being contractually recurring [13] - The company is optimistic about the future growth of the Virtual Sports business, especially with new innovations and market expansions [34][75] - Management indicated that the current economic environment is being navigated well, with a strong balance sheet and cash position [76] Other Important Information - The company plans to file their 10-K by the end of the week following the earnings call [7] - The company is experiencing a significant year-to-year increase in accounts receivable, impacting year-end cash [15] Q&A Session Summary Question: Challenges in Virtual Sports segment - Management acknowledged that the struggles are primarily driven by one customer but noted stabilization and modest growth in the rest of the business [32][34] Question: Updates on M&A strategy - The company is exploring the sale of holiday parks and remains optimistic about the outcome, while also looking for M&A opportunities that align with their strategy [36][39] Question: U.K. white paper impact - Management expects minimal impact from the upcoming stakes limits and is hopeful for the liberalization of B3 cabinets, which would benefit their sales [42][44] Question: Cash balance expectations - Management indicated that the cash balance is likely to be lower than previously guided due to delays in receivables and accelerated supplier payments [45][46] Question: Virtual Sports growth confidence - Management expressed confidence in the stabilization of Virtual Sports revenue and highlighted strong results from key customers in Brazil [50][53] Question: CapEx needs and cash flow - Management confirmed that CapEx needs are planned and budgeted, with no unexpected expenses anticipated [60][62] Question: Lottery business growth opportunities - Management is excited about the upcoming launch of a cloud-based lottery system and sees significant opportunities in the lottery segment [64][68]