Inspired(US:INSE)2025-03-17 14:34Financial 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]