Inspired(US:INSE)2024-08-11 10:58Financial Data and Key Metrics Changes - The company reported a sequential EBITDA growth of 56.5% from Q1 2024, exceeding initial expectations of at least 50% growth [3][4] - Overall EBITDA performance across the business increased by 57% in Q2 compared to Q1 [17] Business Line Data and Key Metrics Changes - The Interactive segment saw a 40% year-over-year revenue increase and a 6% adjusted EBITDA growth year-over-year, with a sequential revenue growth of 16% and adjusted EBITDA growth of 39% [7] - Virtual Sports maintained high EBITDA margins exceeding 80%, although recent revenues have plateaued due to a lack of product and geographic expansion [4][12] Market Data and Key Metrics Changes - The company achieved an 8% market share for slots in the U.K., quadrupling its share from previous years, and increased its blended share of table games and slots from 5.4% to 7% year-over-year [8] - The company is expanding into new markets, including Brazil and South Africa, which are expected to provide growth opportunities [9] Company Strategy and Development Direction - The company is focusing on expanding its interactive portfolio through new products and geographic expansion, particularly with the Harbir dealer initiative [4] - Plans to improve the profitability of the Halide Park business are underway, aiming to enhance overall EBITDA margins [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of 2024, expecting revenue and EBITDA to exceed the first half due to recent product and geographic expansions [5][13] - The company remains optimistic about the performance of the hybrid dealer segment, which is anticipated to become a significant contributor to revenue in 2025 [10][32] Other Important Information - The company is transitioning to fully outsourced manufacturing, which is expected to save approximately $3 million annually [17] - The company is also consolidating logistics facilities to generate additional savings [17] Q&A Session Summary Question: Thoughts on Inspired's positioning regarding M&A and take privates in the gaming tech space - Management emphasized focusing on business performance and growth initiatives rather than M&A activities [20] Question: Capital allocation thoughts, specifically regarding share repurchases - Management indicated a desire to repurchase shares, noting that liquidity has been impacted but expects significant cash increases in Q4 [22] Question: Runway with customers or operators not currently engaged in the U.S. Gaming market - Management stated that there are not many operators left to engage with in the U.S. market, focusing instead on new geographies like Brazil [25] Question: Update on the Greek market performance - Management acknowledged a softening market in Greece but expects new equipment installations to improve market share [27] Question: Expectations for the hybrid dealer segment's growth - Management noted that demand currently exceeds capacity and sees significant growth potential in the hybrid dealer segment [29][30] Question: Updates on the lottery segment opportunities - Management expressed bullishness on the lottery market and indicated potential announcements regarding new customers in the near future [33] Question: Confidence in maintaining revenue growth in Interactive - Management is optimistic about sustaining a growth trajectory of around 30% or higher, supported by recent performance [36]