Inspired(US:INSE)2024-11-08 17:23Financial Data and Key Metrics Changes - Year-over-year EBITDA growth in Q3 was 13%, with EBITDA margins approaching the 40% target [5][11] - Cash balance at the end of Q3 was $36.5 million, up from $23.5 million at the end of Q2, with expectations to reach between $50 million and $55 million by the end of Q1 2025 [6][7] Business Line Data and Key Metrics Changes - Interactive business revenue increased by 40% year-over-year, with EBITDA up 47%, and adjusted EBITDA margin at 67.6% [12] - Virtual Sports segment saw a decline due to the loss of the largest customer, but recurring revenue from other customers grew by 11% year-over-year [17] - Gaming segment revenue, excluding low-margin sales, increased by 4% year-over-year, with EBITDA rising by 29% [19] - Leisure segment revenue was up 5% year-over-year, with EBITDA increasing by 17% [23] Market Data and Key Metrics Changes - The UK market is stabilizing and showing growth, with the company gaining market share as smaller players exit [36][37] - The company is expanding into new markets, including Brazil and South Africa, which are expected to contribute to growth [12][16] Company Strategy and Development Direction - The company aims for a 40% EBITDA margin, driven by a shift towards digital-focused growth and cost-saving initiatives [11][39] - Plans to enhance product offerings, including new games and studio capacity, to support growth in the Interactive segment [14][16] - The company is reviewing strategic options for its holiday parks business while focusing on improving operational efficiencies in other segments [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the Interactive segment and the overall business strategy, anticipating continued improvement in financial results [24][40] - The company is optimistic about the impact of new products and market expansions on future performance [12][16] Other Important Information - James Richardson will join as the new CFO starting January 1, 2025, bringing extensive experience in financial reporting and governance [9] - The company is implementing a plan to consolidate and reengineer remaining retail businesses to offset EBITDA from the holiday parks business [8] Q&A Session Summary Question: Thoughts on 2025 impact and consensus - Management is comfortable with the consensus for 2025, citing multiple growth drivers [26][28] Question: Update on product refreshes in the gaming market - Expected uplift from the William Hill conversion similar to previous conversions, with positive performance in North America [30][31] Question: Insights on bespoke content with FanDuel - A mix of bespoke and standard products will be offered, with bespoke content requiring upfront fees [33] Question: Regulatory environment and market share in the UK - The UK market is growing, and the company is gaining market share due to a strong retail presence [36][37] Question: Timeline for achieving 40% consolidated margin - The shift towards digital and high-margin segments will drive margins, but timing is uncertain [38][40] Question: Customer engagement with Hybrid Dealer - Positive metrics on active and repeat players indicate strong performance, with more data expected in the coming quarters [42] Question: Use of debt for share buybacks - Management will not incur additional debt for share buybacks, focusing on organic growth and acquisitions instead [44][45] Question: Challenges in integrating Interactive content with Virtual Sports - Regulatory issues and the need for major players to adopt Virtual Sports are key challenges [46][47]