Inspired Reports Second Quarter 2024 Results
Inspired Entertainment (NASDAQ: INSE) reported solid Q2 2024 results, with revenue of $75.6 million, up 40% year-over-year, driven primarily by Interactive segment performance. Net income was $2.0 million, and Adjusted EBITDA reached $25.5 million, a 69% increase year-over-year. The company highlighted:
1. Record-breaking Interactive segment performance
2. Extended partnership with William Hill, including 5,000 new Vantage® terminals
3. Launch of Hybrid Dealer™ with BetMGM in Michigan
4. Agreement with AGLC for 150 new Valor™ Terminals
5. Expansion of iGaming content with Fanatics and FanDuel
The company expects continued growth in Interactive and Virtual Sports segments, with a focus on expanding Hybrid Dealer offerings and rolling out new content.
Inspired Entertainment (NASDAQ: INSE) ha registrato risultati solidi nel secondo trimestre del 2024, con un fatturato di 75,6 milioni di dollari, in aumento del 40% rispetto all'anno precedente, principalmente grazie alle prestazioni del segmento Interattivo. L'utile netto è stato di 2,0 milioni di dollari e l'EBITDA rettificato ha raggiunto i 25,5 milioni di dollari, con un incremento del 69% su base annua. L'azienda ha messo in evidenza:
1. Prestazioni record nel segmento Interattivo
2. Estensione della partnership con William Hill, includendo 5.000 nuovi terminali Vantage®
3. Lancio del Hybrid Dealer™ con BetMGM in Michigan
4. Accordo con AGLC per 150 nuovi terminali Valor™
5. Espansione dei contenuti di iGaming con Fanatics e FanDuel
L'azienda prevede una continua crescita nei segmenti Interattivo e Sport Virtuali, con un focus sull'espansione delle offerte di Hybrid Dealer e sul lancio di nuovi contenuti.
Inspired Entertainment (NASDAQ: INSE) reportó sólidos resultados en el segundo trimestre de 2024, con ingresos de 75.6 millones de dólares, un aumento del 40% interanual, impulsados principalmente por el desempeño del segmento Interactivo. La ganancia neta fue de 2.0 millones de dólares y el EBITDA ajustado alcanzó los 25.5 millones de dólares, un incremento del 69% respecto al año anterior. La compañía destacó:
1. Rendimiento récord del segmento Interactivo
2. Ampliación de la asociación con William Hill, incluyendo 5,000 nuevos terminales Vantage®
3. Lanzamiento de Hybrid Dealer™ con BetMGM en Michigan
4. Acuerdo con AGLC para 150 nuevos terminales Valor™
5. Expansión de contenido de iGaming con Fanatics y FanDuel
La compañía espera un crecimiento continuo en los segmentos Interactivos y de Deportes Virtuales, con un enfoque en expandir las ofertas de Hybrid Dealer y lanzar nuevo contenido.
Inspired Entertainment (NASDAQ: INSE)는 2024년 2분기에 7,560만 달러의 수익을 기록하며, 지난해 대비 40% 증가한 solid한 결과를 보고했습니다. 이는 주로 Interactivo 부문의 성과에 의해 주도되었습니다. 순이익은 200만 달러였으며 조정 EBITDA는 2,550만 달러에 달하여, 지난해 대비 69% 증가했습니다. 회사는 다음과 같은 주요 사항을 강조했습니다:
1. Interactivo 부문에서의 기록적인 성과
2. William Hill과의 파트너십 연장, 5,000개의 새로운 Vantage® 단말기 포함
3. 미시간州에서 BetMGM과 함께 Hybrid Dealer™ 출시
4. AGLC와의 150개의 새로운 Valor™ 단말기에 관한 계약
5. Fanatics 및 FanDuel과의 iGaming 콘텐츠 확장
회사는 Interactivo 및 가상 스포츠 부문에서의 지속적인 성장을 예상하며, Hybrid Dealer 제공 확대와 새로운 콘텐츠 출시에 집중할 예정입니다.
Inspired Entertainment (NASDAQ: INSE) a annoncé des résultats solides pour le deuxième trimestre 2024, avec un chiffre d'affaires de 75,6 millions de dollars, en hausse de 40 % par rapport à l'année précédente, principalement grâce aux performances du segment Interactif. Le bénéfice net s'est élevé à 2,0 millions de dollars, et l'EBITDA ajusté a atteint 25,5 millions de dollars, soit une augmentation de 69 % par rapport à l'année précédente. L'entreprise a souligné :
1. Performance record du segment Interactif
2. Partenariat prolongé avec William Hill, incluant 5 000 nouveaux terminaux Vantage®
3. Lancement de Hybrid Dealer™ avec BetMGM dans le Michigan
4. Accord avec l'AGLC pour 150 nouveaux terminaux Valor™
5. Expansion du contenu iGaming avec Fanatics et FanDuel
L'entreprise s'attend à une croissance continue des segments interactif et des sports virtuels, avec un accent sur l'expansion des offres d'Hybrid Dealer et le lancement de nouveaux contenus.
Inspired Entertainment (NASDAQ: INSE) meldete im zweiten Quartal 2024 solide Ergebnisse mit einem Umsatz von 75,6 Millionen US-Dollar, was einem Anstieg von 40 % im Jahresvergleich entspricht, hauptsächlich aufgrund der Performance des interaktiven Segments. Der Nettoertrag betrug 2,0 Millionen Dollar, und das bereinigte EBITDA erreichte 25,5 Millionen Dollar, ein Anstieg von 69 % im Jahresvergleich. Das Unternehmen hob hervor:
1. Rekordbrechende Leistung im interaktiven Segment
2. Verlängerung der Partnerschaft mit William Hill, einschließlich 5.000 neuer Vantage®-Terminals
3. Einführung von Hybrid Dealer™ mit BetMGM in Michigan
4. Vereinbarung mit AGLC über 150 neue Valor™-Terminals
5. Erweiterung des iGaming-Inhalts mit Fanatics und FanDuel
Das Unternehmen erwartet weiteres Wachstum im interaktiven und virtuellen Sportsegment mit einem Fokus auf die Erweiterung der Hybrid Dealer-Angebote und die Einführung neuer Inhalte.
- Interactive segment revenue increased 40% year-over-year
- Adjusted EBITDA grew 69% year-over-year to $25.5 million
- Extended six-year contract with William Hill, including 5,000 new Vantage® terminals
- Launched Hybrid Dealer™ with BetMGM in Michigan
- Expanded iGaming content with Fanatics and FanDuel in new markets
- Virtual Sports segment revenue decreased 23% year-over-year
- Overall net income decreased from $5.6 million in Q2 2023 to $2.0 million in Q2 2024
- Total company revenue (including Low Margin Gaming Hardware Sales) decreased 5% year-over-year
Insights
Inspired Entertainment's Q2 2024 results show a mixed performance. The company reported
However, the Virtual Sports segment saw a
The new contract with William Hill for 5,000 Vantage terminals and the expansion of the Hybrid Dealer product are positive developments that could drive future growth. However, the company needs to address the decline in Virtual Sports and improve overall profitability to maintain investor confidence.
Inspired's Q2 results reveal interesting market trends in the gaming industry. The significant growth in the Interactive segment (
The company's focus on expanding its Hybrid Dealer offering, particularly into roulette, is strategic given that roulette is a major category in the live dealer sector. This move could position Inspired well in the competitive online gaming market.
However, the decline in Virtual Sports revenue (
The extended partnership with William Hill and the new agreement with AGLC demonstrate Inspired's strong position in the traditional gaming machine market, balancing its digital growth strategy.
From a technological perspective, Inspired's Q2 results highlight the company's innovation-driven strategy. The success of the Interactive segment, particularly the Hybrid Dealer product, showcases Inspired's ability to leverage technology to create engaging gaming experiences.
The planned expansion of the Hybrid Dealer offering to include roulette is a significant technological undertaking. Roulette, being a complex game to replicate digitally while maintaining the feel of a live experience, will test Inspired's technical capabilities.
The deployment of 5,000 new Vantage cabinets for William Hill represents a substantial hardware upgrade. These terminals likely incorporate advanced features to enhance player experience and potentially improve data collection and analysis capabilities for the operator.
The company's venture into virtual esports games like CS:GO demonstrates its adaptability to emerging gaming trends. However, the decline in Virtual Sports revenue suggests a need for technological rejuvenation in this segment to maintain competitiveness.
- Second Quarter Revenue of
$75.6 million , driven primarily by Interactive results, up40% year-over-year - Second Quarter Net Income of
$2.0 million - Second Quarter Adjusted EBITDA of
$25.5 million , driven primarily by Interactive results, up69% year-over-year - Signed new six-year contract with William Hill, pursuant to which we will supply 5,000 new Vantage® terminals within their UK LBO estate
- Announced agreement with AGLC to purchase 150 new Valor™ Terminals
- Launched Hybrid Dealer™ with BetMGM in a second state, Michigan
NEW YORK, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Inspired Entertainment, Inc. (“Inspired” or the “Company”) (NASDAQ: INSE), a leading B2B provider of gaming content, technology, hardware and services, today reported financial results for the three-month period ended June 30, 2024.
“We delivered solid second quarter 2024 results led by strength in our interactive business and a stable performance in gaming,” said Lorne Weil, Executive Chairman of Inspired. "Our Interactive segment had a record-breaking performance, achieving quarterly all-time highs in both revenue and Adjusted EBITDA, up
“Looking ahead, the expansion of our Hybrid Dealer offering remains a top priority. We’re pleased to announce that in July, we successfully launched the Hybrid Dealer game show wheel with BetMGM in Michigan, marking an important milestone in our growth strategy. We anticipate onboarding our second customer with a bespoke version of the game show wheel in the third quarter. Following that launch, we plan to roll out roulette for both customers. This is a particularly exciting development as roulette represents, by a significant margin, the largest category in the live dealer sector and one of the largest in the online gaming industry overall. The potential for growth in this area is substantial, and we’re incredibly excited to continue expanding our Hybrid Dealer presence.”
Weil added, “Within our digital business, we continue to experience a mix shift, with an increased contribution from Interactive relative to Virtual Sports. We anticipate the current period of sequential quarterly fluctuations in Virtual Sports revenue will begin to change, as we are in process of expanding geographies and continuing to roll out our latest content, including our NFL and NBA-themed games and virtual esports games such as CS:GO. Given our initiatives, we anticipate revenue and Adjusted EBITDA during the second half of the year from Virtual Sports will exceed the revenues and Adjusted EBITDA from the first half of 2024.
“The gaming and leisure segments continue to provide a core foundation to our earnings and cash flow. The segment is poised for a solid second half with several recent agreements that we’ve announced. A significant highlight of the quarter was the extension of our long-term partnership agreement with William Hill, covering approximately 1,300 betting shops in the United Kingdom. This extended agreement cements our position as the leading supplier for fully integrated managed services for William Hill’s entire UK estate of gaming terminals. As part of this partnership, William Hill is set to add 5,000 of our new Vantage® cabinets, a move designed to significantly enhance the offering within their licensed betting offices and drive growth.
“The deployment of these new cabinets is scheduled to begin during the fourth quarter of 2024, with expected completion in the first half of 2025. Based on our extensive experience with the Vantage cabinet in the UK LBO market and the consistent double-digit growth we’ve observed, we’re confident that these upgraded terminals will empower William Hill to deliver an enhanced gaming experience to their players, ultimately boosting their results and ours in parallel.”
Weil concluded, “Overall, we’re encouraged by the overall trajectory of our business, including the success of our Interactive segment, coupled with the promising expansion of our Hybrid Dealer product our strategic partnership with William Hill, and a range of initiatives in Virtual Sports. As we continue to innovate and adapt to market dynamics, we remain committed to delivering long-term value for our shareholders.”
Recent Business Highlights
- Extended long-term relationship with William Hill by six years to provide fully integrated managed services for William Hill’s entire UK estate of gaming terminals, which includes 1,300 betting shops in the UK. William Hill has committed to lease 5,000 new Vantage® terminals.
- Announced agreement with Alberta Gaming, Liquor and Cannabis (“AGLC”) in Canada to deploy 150 new Valor Terminals.
- Launched iGaming content with Fanatics in Michigan and Pennsylvania.
- Launched iGaming content with FanDuel in Connecticut, where Inspired is now covering
100% of the market. - Subsequent to quarter-end, launched the innovative Hybrid Dealer game MGM Bonus City with BetMGM in Michigan.
- Subsequent to quarter-end, announced the expansion of Inspired’s agreement with bet365 to provide premium iGaming content in Pennsylvania.
- Subsequent to quarter-end, announced a partnership with Scientific Games as the latest game studio to join the SG Content Hub Partner Program, the global lottery industry’s premier content delivery platform.
- Subsequent to quarter-end, announced major contract with Mecca Bingo to supply 170 state-of-the-art gaming machines through a five-year agreement worth approximately
$12.7 million .
| Summary of Second Quarter 2024 Segment Financial Results (unaudited) | ||||||||||||||||||
| Three Months Ended June 30, | Reported Variance | Currency Movement 20242 | Functional Currency Variance | |||||||||||||||
| (In $ millions) | 2024 | 2023 | % | $ | % | |||||||||||||
| Total Revenue | ||||||||||||||||||
| Gaming (excl. Low Margin Hardware Sales) | 1 | % | 0 | % | ||||||||||||||
| Virtual Sports | 11.7 | 15.1 | (23 | %) | 0.1 | (23 | %) | |||||||||||
| Interactive | 9.4 | 6.7 | 40 | % | - | 40 | % | |||||||||||
| Leisure | 27.4 | 26.5 | 3 | % | 0.3 | 3 | % | |||||||||||
| Total Company Revenue (excl. Low Margin Gaming Hardware Sales) | $75.6 | $75.0 | 1 | % | $0.8 | 0 | % | |||||||||||
| Low Margin Gaming Hardware Sales | - | 4.4 | (100 | %) | - | (100 | %) | |||||||||||
| Total Company Revenue (incl. Low Margin Gaming Hardware Sales) | $75.6 | $79.4 | (5 | %) | $0.8 | (6 | %) | |||||||||||
| Net operating income | 9.4 | 13.8 | (32 | %) | 0.4 | (35 | %) | |||||||||||
| Net income | 2.0 | 5.6 | (64 | %) | 0.2 | (68 | %) | |||||||||||
| Net loss per basic share | $0.07 | $0.20 | (65 | %) | NM3 | (62 | %) | |||||||||||
| Net loss per diluted share | $0.07 | $0.19 | (65 | %) | NM3 | (62 | %) | |||||||||||
| Non-GAAP Financial Measures | ||||||||||||||||||
| Adjusted EBITDA1 | ||||||||||||||||||
| Gaming | (8 | %) | 0.1 | (9 | %) | |||||||||||||
| Virtual Sports | 9.6 | 13.1 | (27 | %) | - | (27 | %) | |||||||||||
| Interactive | 6.1 | 3.6 | 69 | % | 0.1 | 66 | % | |||||||||||
| Leisure | 6.1 | 6.5 | (6 | %) | (0.2 | ) | (4 | %) | ||||||||||
| Corporate | (6.6 | ) | (7.2 | ) | 8 | % | 0.2 | 6 | % | |||||||||
| Total Company Adjusted EBITDA1 | (6 | %) | (7 | %) | ||||||||||||||
| Adjusted EBITDA Margin1 | 34 | % | 34 | % | ||||||||||||||
| Adjusted EBITDA Margin (Excl. Low Margin Gaming Hardware Sales) | 34 | % | 36 | % | ||||||||||||||
| Adjusted net income1 | (12 | %) | 0.1 | (13 | %) | |||||||||||||
| Adjusted net income per diluted share | $0.20 | $0.22 | (12 | %) | NM3 | (11 | %) | |||||||||||
| 1Reconciliation to US GAAP shown below. | ||||||||||||||||||
| 2Currency movement calculated by translating 2024 and 2023 performances at 2023 exchange rates. | ||||||||||||||||||
| 3Percentage/dollar change is not meaningful. | ||||||||||||||||||
Non-GAAP Financial Measures
We use non-GAAP financial measures, including Adjusted EBITDA, to analyze our operating performance. We use these financial measures to manage our business on a day-to-day basis. We believe that these measures are also commonly used in our industry to measure performance. For these reasons, we believe that these non-GAAP financial measures provide expanded insight into our business, in addition to standard U.S. GAAP financial measures. There are no uniform rules for defining and using non-GAAP financial measures, and as a result the measures we use may not be comparable to measures used by other companies, even if they have similar labels. The presentation of non-GAAP financial information should not be considered in isolation from, as a substitute for, or superior to, financial information prepared and presented in accordance with U.S. GAAP. You should consider our non-GAAP financial measures in conjunction with our U.S. GAAP financial statements.
We define our non-GAAP financial measures as follows:
EBITDA is defined as net loss excluding depreciation and amortization, interest expense, interest income and income tax expense.
Adjusted EBITDA is defined as net income (loss) excluding depreciation and amortization, interest expense, interest income and income tax expense, and other additional exclusions and adjustments (see Adjusted EBITDA reconciliation table). Such additional excluded amounts include stock-based compensation U.S. GAAP charges where the associated liability is expected to be settled in stock, and changes in the value of earnout liabilities and income and expenditure in relation to legacy portions of the business (being those portions where trading no longer occurs) including closed defined benefit pension schemes. Additional adjustments are made for items considered outside the normal course of business, including (1) restructuring costs, which include charges attributable to employee severance, management changes, restructuring, dual running costs, costs related to facility closures and integration costs, (2) merger and acquisition costs and (3) gains or losses not in the ordinary course of business.
We believe Adjusted EBITDA, when considered along with other performance measures, is a particularly useful performance measure, because it focuses on certain operating drivers of the business, including sales growth, operating costs, selling and administrative expense and other operating income and expense. We believe Adjusted EBITDA can provide a more complete understanding of our operating results and the trends to which we are subject, and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income or loss, because it does not take into account certain aspects of our operating performance (for example, it excludes non-recurring gains and losses which are not deemed to be a normal part of underlying business activities). Our use of Adjusted EBITDA may not be comparable to the use by other companies of similarly termed measures. Management compensates for these limitations by using Adjusted EBITDA as only one of several measures for evaluating our operating performance. In addition, capital expenditures, which affect depreciation and amortization, interest expense, and income tax benefit (expense), are evaluated separately by management.
Adjusted Net Income is defined as net income (loss) excluding the effects of certain exclusions and adjustments. Such excluded amounts include income and expenditure in relation to legacy portions of the business (being those portions where trading no longer occurs) including closed defined benefit pension schemes. Additional adjustments are made for items considered outside the normal course of business, including (1) restructuring costs, which include charges attributable to employee severance, management changes, restructuring, dual running costs, costs related to facility closures and integration costs, (2) merger and acquisition costs and (3) gains or losses not in the ordinary course of business. These items have been adjusted to reflect the tax impact from excluding them from net income (loss).
Adjusted Net Income per diluted share is computed by dividing the Adjusted Net Income by the weighted-average number of common shares outstanding during the period, including the effects of any potentially dilutive securities, including RSUs, using the treasury stock method, and convertible debt or convertible preferred stock, using the if-converted method, unless the inclusion would be anti-dilutive.
Functional Currency at Constant rate. Currency impacts shown have been calculated as the current-period average GBP:USD rate less the equivalent average rate in the prior year quarter, multiplied by the current period amount in our functional currency (GBP). The remaining difference, referred to as functional currency at constant rate, is calculated as the difference in our functional currency, multiplied by the prior year quarter average GBP: USD rate, as a proxy for functional currency at constant rate movement.
Currency Movement represents the difference between the results in our reporting currency (USD) and the results on a functional currency at constant rate basis.
Reconciliations from net loss, as shown in our Consolidated Statements of Operations and Comprehensive Loss, to Adjusted EBITDA are shown below.
Conference Call and Webcast
Inspired management will host a conference call and simultaneous webcast at 8:00 a.m. ET / 1:00 p.m. UK on Thursday, August 8, 2024 to discuss the financial results and general business trends.
Telephone: The dial-in number to access the call live is 1-800-715-9871 (US) or 1-646-307-1963 (International). Participants should ask to be joined into the Inspired Entertainment call.
Webcast: A live audio-only webcast of the call can be accessed through the “Events and Presentations” page of the Company’s website at www.inseinc.com under the Investors link. Please follow the registration prompts.
Replay: A replay of the webcast will be available on the Company’s website at www.inseinc.com.
About Inspired Entertainment, Inc.
Inspired offers an expanding portfolio of content, technology, hardware and services for regulated gaming, betting, lottery, social and leisure operators across retail and mobile channels around the world. The Company’s gaming, virtual sports, interactive and leisure products appeal to a wide variety of players, creating new opportunities for operators to grow their revenue. The Company operates in approximately 35 jurisdictions worldwide, supplying gaming systems with associated terminals and content for approximately 50,000 gaming machines located in betting shops, pubs, gaming halls and other route operations; virtual sports products through more than 32,000 retail venues and various online websites; interactive games for 170+ websites; and a variety of amusement entertainment solutions with a total installed base of more than 16,000 terminals. Additional information can be found at www.inseinc.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our ability to bring certain of our products to customers in the various markets in which we operate and execute on our strategic plan, statements regarding expectations with respect to potential new customers and statements regarding our anticipated financial performance. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “continue,” “expect,” “estimate,” “plan,” “will,” “would” and “project” and other similar expressions that indicate future events or trends or are not statements of historical matters. These statements are based on Inspired management’s current expectations and beliefs, as well as a number of assumptions concerning future events.
Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of Inspired’s control and all of which could cause actual results to differ materially from the results discussed in the forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing Inspired’s views as of any subsequent date. You are advised to review carefully the “Risk Factors” section of Inspired’s annual report on Form 10-K for the fiscal year ended December 31, 2023, and subsequent quarterly reports on Form 10-Q, which are available, free of charge, on the U.S. Securities and Exchange Commission’s website at www.sec.gov. Inspired does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as required by law.
Contact:
For Investors
IR@inseinc.com
+1 (646) 277-1285
For Press and Sales
inspiredsales@inseinc.com
| INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in millions, except share data) (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue: | ||||||||||||||||
| Service | $ | 65.8 | $ | 67.5 | $ | 122.9 | $ | 125.0 | ||||||||
| Product sales | 9.8 | 11.9 | 15.8 | 19.3 | ||||||||||||
| Total revenue | 75.6 | 79.4 | 138.7 | 144.3 | ||||||||||||
| Cost of sales: | ||||||||||||||||
| Cost of service (1) | (19.0 | ) | (20.5 | ) | (34.9 | ) | (35.5 | ) | ||||||||
| Cost of product sales (1) | (5.8 | ) | (8.4 | ) | (10.3 | ) | (15.1 | ) | ||||||||
| Selling, general and administrative expenses | (30.8 | ) | (26.6 | ) | (65.0 | ) | (55.8 | ) | ||||||||
| Depreciation and amortization | (10.6 | ) | (10.1 | ) | (20.5 | ) | (19.5 | ) | ||||||||
| Net operating income | 9.4 | 13.8 | 8.0 | 18.4 | ||||||||||||
| Other expense | ||||||||||||||||
| Interest expense, net | (6.7 | ) | (7.3 | ) | (13.3 | ) | (13.6 | ) | ||||||||
| Other finance income | 0.1 | 0.1 | 0.2 | 0.2 | ||||||||||||
| Total other expense, net | (6.6 | ) | (7.2 | ) | (13.1 | ) | (13.4 | ) | ||||||||
| Net income (loss) before income taxes | 2.8 | 6.6 | (5.1 | ) | 5.0 | |||||||||||
| Income tax (expense) benefit | (0.8 | ) | (1.0 | ) | 1.4 | (0.8 | ) | |||||||||
| Net income (loss) | 2.0 | 5.6 | (3.7 | ) | 4.2 | |||||||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation (loss) gain | (0.2 | ) | (2.7 | ) | 0.8 | (5.6 | ) | |||||||||
| Reclassification of loss on hedging instrument to comprehensive income | — | 0.1 | — | 0.3 | ||||||||||||
| Actuarial gains on pension plan | 0.3 | 0.3 | 0.6 | 0.5 | ||||||||||||
| Other comprehensive income (loss) | 0.1 | (2.3 | ) | 1.4 | (4.8 | ) | ||||||||||
| Comprehensive income (loss) | $ | 2.1 | $ | 3.3 | $ | (2.3 | ) | $ | (0.6 | ) | ||||||
| Net income (loss) per common share – basic | $ | 0.07 | $ | 0.20 | $ | (0.13 | ) | $ | 0.15 | |||||||
| Net income (loss) per common share - diluted | $ | 0.07 | $ | 0.19 | $ | (0.13 | ) | $ | 0.14 | |||||||
| Weighted average number of shares outstanding during the period – basic | 28,474,059 | 28,186,725 | 28,538,897 | 28,081,041 | ||||||||||||
| Weighted average number of shares outstanding during the period – diluted | 29,046,281 | 29,073,078 | 28,538,897 | 29,023,288 | ||||||||||||
| Supplemental disclosure of stock-based compensation expense | ||||||||||||||||
| Stock-based compensation included in: | ||||||||||||||||
| Selling, general and administrative expenses | $ | (1.6 | ) | $ | (3.1 | ) | $ | (3.9 | ) | $ | (6.0 | ) | ||||
(1) Excluding depreciation and amortization
| INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share data) | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Cash | $ | 23.5 | $ | 40.0 | ||||
| Accounts receivable, net | 41.9 | 40.6 | ||||||
| Inventory | 30.4 | 32.3 | ||||||
| Prepaid expenses and other current assets | 39.7 | 39.6 | ||||||
| Total current assets | 135.5 | 152.5 | ||||||
| Property and equipment, net | 61.4 | 62.8 | ||||||
| Software development costs, net | 23.1 | 21.8 | ||||||
| Other acquired intangible assets subject to amortization, net | 16.7 | 13.4 | ||||||
| Goodwill | 58.3 | 58.8 | ||||||
| Operating lease right of use asset | 15.3 | 14.2 | ||||||
| Costs of obtaining and fulfilling customer contracts, net | 10.3 | 9.4 | ||||||
| Other assets | 6.0 | 8.0 | ||||||
| Total assets | $ | 326.6 | $ | 340.9 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 47.7 | $ | 60.8 | ||||
| Corporate tax and other current taxes payable | 4.5 | 6.3 | ||||||
| Deferred revenue, current | 4.9 | 5.6 | ||||||
| Operating lease liabilities | 5.2 | 4.7 | ||||||
| Current portion of long-term debt | 19.0 | 19.1 | ||||||
| Other current liabilities | 6.4 | 4.2 | ||||||
| Total current liabilities | 87.7 | 100.7 | ||||||
| Long-term debt | 294.0 | 295.6 | ||||||
| Finance lease liabilities, net of current portion | 2.0 | 1.6 | ||||||
| Deferred revenue, net of current portion | 7.2 | 7.1 | ||||||
| Operating lease liabilities | 10.3 | 9.8 | ||||||
| Other long-term liabilities | 2.8 | 4.1 | ||||||
| Total liabilities | 404.0 | 418.9 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock; | — | — | ||||||
| Common stock; | — | — | ||||||
| Additional paid in capital | 389.0 | 386.1 | ||||||
| Accumulated other comprehensive income | 45.9 | 44.5 | ||||||
| Accumulated deficit | (512.3 | ) | (508.6 | ) | ||||
| Total stockholders’ deficit | (77.4 | ) | (78.0 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 326.6 | $ | 340.9 | ||||
| INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) | |||||||||
| Six Months Ended June 30, | |||||||||
| 2024 | 2023 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net (loss) / income | $ | (3.7 | ) | $ | 4.2 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 20.5 | 19.5 | |||||||
| Amortization of right of use asset | 2.0 | 1.9 | |||||||
| Stock-based compensation expense | 3.9 | 6.0 | |||||||
| Contract cost expense | (5.7 | ) | (5.2 | ) | |||||
| Reclassification of loss on hedging instrument to comprehensive income | — | 0.3 | |||||||
| Non-cash interest expense relating to senior debt | 0.6 | 1.0 | |||||||
| Changes in assets and liabilities: | |||||||||
| Accounts receivable | (1.6 | ) | 3.2 | ||||||
| Inventory | 1.7 | (14.6 | ) | ||||||
| Prepaid expenses and other assets | 5.0 | 2.5 | |||||||
| Corporate tax and other current taxes payable | (6.1 | ) | (1.5 | ) | |||||
| Accounts payable and accrued expenses | (17.6 | ) | (7.6 | ) | |||||
| Deferred revenues and customer prepayment | 1.7 | 24.7 | |||||||
| Operating lease liabilities | (2.1 | ) | (1.8 | ) | |||||
| Other long-term liabilities | (0.7 | ) | (0.1 | ) | |||||
| Net cash (used in) provided by operating activities | (2.1 | ) | 32.5 | ||||||
| Cash flows from investing activities: | |||||||||
| Purchases of property and equipment | (7.3 | ) | (8.7 | ) | |||||
| Acquisition of third-party company trade and assets | — | (0.6 | ) | ||||||
| Purchases of capital software and internally developed costs | (6.2 | ) | (6.7 | ) | |||||
| Net cash used in investing activities | (13.5 | ) | (16.0 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Repurchase of common stock | — | (0.1 | ) | ||||||
| Repayments of finance leases | (0.5 | ) | (0.7 | ) | |||||
| Net cash used in financing activities | (0.5 | ) | (0.8 | ) | |||||
| Effect of exchange rate changes on cash | (0.4 | ) | 1.4 | ||||||
| Net (decrease) increase in cash | (16.5 | ) | 17.1 | ||||||
| Cash, beginning of period | 40.0 | 25.0 | |||||||
| Cash, end of period | $ | 23.5 | $ | 42.1 | |||||
| Supplemental cash flow disclosures | |||||||||
| Cash paid during the period for interest | $ | 12.8 | $ | 11.9 | |||||
| Cash paid during the period for income taxes | $ | 1.4 | $ | 4.5 | |||||
| Cash paid during the period for operating leases | $ | 5.0 | $ | 3.9 | |||||
| Supplemental disclosure of non-cash investing and financing activities | |||||||||
| Lease liabilities arising from obtaining right of use assets | $ | (3.1 | ) | $ | (0.2 | ) | |||
| Additional paid in capital from settlement of RSUs | $ | (0.8 | ) | $ | (0.2 | ) | |||
| Property and equipment acquired through finance lease | $ | 1.3 | $ | 1.2 | |||||
| ARO assets arising during the period | $ | 0.1 | $ | — | |||||
| INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||
| ADJUSTED EBITDA RECONCILIATION BY SEGMENT (in millions) (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | ||||||||||||||||||||||||
| Gaming | Virtual Sports | Interactive | Leisure | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 6.4 | $ | 7.0 | $ | 4.8 | $ | 3.0 | $ | (19.2 | ) | $ | 2.0 | |||||||||||
| Items Relating to Legacy Activities: | ||||||||||||||||||||||||
| Pension charges | — | — | — | — | 0.3 | 0.3 | ||||||||||||||||||
| Items outside the normal course of business: | ||||||||||||||||||||||||
| Costs of group restructure | 0.3 | — | — | — | 0.5 | 0.8 | ||||||||||||||||||
| Costs of group restatement | — | — | — | — | 2.8 | 2.8 | ||||||||||||||||||
| Stock-based compensation expense | 0.2 | 0.1 | 0.1 | 0.1 | 1.1 | 1.6 | ||||||||||||||||||
| Depreciation and amortization | 3.4 | 2.5 | 1.2 | 3.0 | 0.5 | 10.6 | ||||||||||||||||||
| Interest expense, net | — | — | — | — | 6.7 | 6.7 | ||||||||||||||||||
| Other finance income | — | — | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||||||
| Income tax | — | — | — | — | 0.8 | 0.8 | ||||||||||||||||||
| Adjusted EBITDA | $ | 10.3 | $ | 9.6 | $ | 6.1 | $ | 6.1 | $ | (6.6 | ) | $ | 25.5 | |||||||||||
| Adjusted EBITDA | £ | 8.1 | £ | 7.7 | £ | 4.8 | £ | 4.9 | £ | (5.3 | ) | £ | 20.2 | |||||||||||
| Exchange rate - $ to £ | 1.26 | |||||||||||||||||||||||
Three Months Ended June 30, 2023
| Gaming | Virtual Sports | Interactive | Leisure | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 6.2 | $ | 12.1 | $ | 2.5 | $ | 3.1 | $ | (18.3 | ) | $ | 5.6 | |||||||||||
| Items Relating to Legacy Activities: | ||||||||||||||||||||||||
| Pension charges | — | — | — | — | 0.2 | 0.2 | ||||||||||||||||||
| Items outside the normal course of business: | ||||||||||||||||||||||||
| Costs of group restructure | — | — | — | — | — | — | — | |||||||||||||||||
| Stock-based compensation expense | 0.4 | 0.2 | 0.1 | 0.4 | 2.0 | 3.1 | ||||||||||||||||||
| Depreciation and amortization | 4.6 | 0.8 | 1.0 | 3.0 | 0.7 | 10.1 | ||||||||||||||||||
| Interest expense, net | — | — | — | — | 7.3 | 7.3 | ||||||||||||||||||
| Other finance income | — | — | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||||||
| Income tax | — | — | — | — | 1.0 | 1.0 | ||||||||||||||||||
| Adjusted EBITDA | $ | 11.2 | $ | 13.1 | $ | 3.6 | $ | 6.5 | $ | (7.2 | ) | $ | 27.2 | |||||||||||
| Adjusted EBITDA | £ | 8.9 | £ | 10.5 | £ | 2.9 | £ | 5.1 | £ | (5.6 | ) | £ | 21.8 | |||||||||||
| Exchange rate - $ to £ | 1.24 | |||||||||||||||||||||||
Six Months Ended June 30, 2024
| Gaming | Virtual Sports | Interactive | Leisure | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 9.2 | $ | 16.4 | $ | 7.9 | $ | 1.7 | $ | (38.9 | ) | $ | (3.7 | ) | ||||||||||
| Items Relating to Legacy Activities: | ||||||||||||||||||||||||
| Pension charges | — | — | — | — | 0.6 | 0.6 | ||||||||||||||||||
| Items outside the normal course of business: | ||||||||||||||||||||||||
| Costs of group restructure | 0.3 | — | — | — | 0.6 | 0.9 | ||||||||||||||||||
| Costs of group restatement | — | — | — | — | 7.8 | 7.8 | ||||||||||||||||||
| Stock-based compensation expense | 0.4 | 0.2 | 0.2 | 0.2 | 2.9 | 3.9 | ||||||||||||||||||
| Depreciation and amortization | 7.7 | 3.4 | 2.4 | 6.0 | 1.0 | 20.5 | ||||||||||||||||||
| Interest expense, net | — | — | — | — | 13.3 | 13.3 | ||||||||||||||||||
| Other finance income | — | — | — | — | (0.2 | ) | (0.2 | ) | ||||||||||||||||
| Income tax | — | — | — | — | (1.4 | ) | (1.4 | ) | ||||||||||||||||
| Adjusted EBITDA | $ | 17.6 | $ | 20.0 | $ | 10.5 | $ | 7.9 | $ | (14.3 | ) | $ | 41.7 | |||||||||||
| Adjusted EBITDA | £ | 14.0 | £ | 15.6 | £ | 8.2 | £ | 6.3 | £ | (11.3 | ) | £ | 32.8 | |||||||||||
| Exchange rate - $ to £ | 1.27 | |||||||||||||||||||||||
Six Months Ended June 30, 2023
| Gaming | Virtual Sports | Interactive | Leisure | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 11.1 | $ | 23.8 | $ | 4.8 | $ | 0.8 | $ | (36.3 | ) | $ | 4.2 | |||||||||||
| Items Relating to Legacy Activities: | ||||||||||||||||||||||||
| Pension charges | — | — | — | — | 0.4 | 0.4 | ||||||||||||||||||
| Items outside the normal course of business: | ||||||||||||||||||||||||
| Costs of group restructure | — | — | — | — | — | 3.0 | 3.0 | |||||||||||||||||
| Stock-based compensation expense | 0.7 | 0.4 | 0.3 | 0.5 | 4.1 | 6.0 | ||||||||||||||||||
| Depreciation and amortization | 9.1 | 1.6 | 1.6 | 6.1 | 1.1 | 19.5 | ||||||||||||||||||
| Interest expense, net | — | — | — | — | 13.6 | 13.6 | ||||||||||||||||||
| Other finance income | — | — | — | — | (0.2 | ) | (0.2 | ) | ||||||||||||||||
| Income tax | — | — | — | — | 0.8 | 0.8 | ||||||||||||||||||
| Adjusted EBITDA | $ | 20.9 | $ | 25.8 | $ | 6.7 | $ | 7.4 | $ | (13.5 | ) | $ | 47.3 | |||||||||||
| Adjusted EBITDA | £ | 16.9 | £ | 20.9 | £ | 5.4 | £ | 5.9 | £ | (10.7 | ) | £ | 38.4 | |||||||||||
| Exchange rate - $ to £ | 1.23 | |||||||||||||||||||||||
| ADJUSTED NET INCOME RECONCILIATION (in millions, except share data) (Unaudited) | ||||||||||||||||
| For the Three-Month Period ended | For the Six-Month Period ended | |||||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| (In millions) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (loss) | $ | 2.0 | $ | 5.6 | $ | (3.7 | ) | $ | 4.2 | |||||||
| Items Relating to Legacy Activities: | ||||||||||||||||
| Pension charges | 0.3 | 0.2 | 0.6 | 0.4 | ||||||||||||
| Items outside the normal course of business: | ||||||||||||||||
| Cost of group restructure | 0.8 | — | 0.9 | 3.0 | ||||||||||||
| Cost of group restatement | 2.8 | — | 7.8 | — | ||||||||||||
| Effect of exchange rates on cash | — | 1.0 | (0.4 | ) | 1.0 | |||||||||||
| Mark to market movement on currency deals | (0.1 | ) | (0.2 | ) | 0.2 | (0.1 | ) | |||||||||
| Other finance income | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||
| Tax Impact | — | — | 0.1 | — | ||||||||||||
| Adjusted Net Income | $ | 5.7 | $ | 6.5 | $ | 5.3 | $ | 8.3 | ||||||||
| Adjusted Net Income | £ | 4.5 | £ | 5.2 | £ | 4.2 | £ | 6.8 | ||||||||
| Exchange Rate - $ to £ | 1.26 | 1.25 | 1.27 | 1.23 | ||||||||||||
| Weighted average number of shares outstanding– diluted | 29,046,281 | 29,073,078 | 29,021,756 | 29,023,288 | ||||||||||||
| Adjusted Net Income per diluted share | $ | 0.20 | $ | 0.22 | $ | 0.18 | $ | 0.29 | ||||||||
| PRO-RATED SEGMENT ADJUSTED EBITDA CONTRIBUTION (in millions) (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||
| Gaming | Virtual Sports | Interactive | Leisure | Corporate Functions | Total | ||||||||||||||||||||||
| Total Revenue | $ | 27.1 | $ | 11.7 | $ | 9.4 | $ | 27.4 | $ | — | $ | 75.6 | |||||||||||||||
| Segment % of Total Revenue | 35.9 | % | 15.5 | % | 12.4 | % | 36.2 | % | 100.0 | % | |||||||||||||||||
| Adjusted EBITDA | $ | 10.3 | $ | 9.6 | $ | 6.1 | $ | 6.1 | $ | (6.6 | ) | $ | 25.5 | ||||||||||||||
| Corporate allocation(1) | (2.4 | ) | (1.0 | ) | (0.8 | ) | (2.4 | ) | 6.6 | — | |||||||||||||||||
| Segment-level Adjusted EBITDA including pro-rated corporate allocation | $ | 7.9 | $ | 8.6 | $ | 5.3 | $ | 3.7 | $ | — | $ | 25.5 | |||||||||||||||
| Segment Contribution to Adjusted EBITDA | 31.0 | % | 33.7 | % | 20.8 | % | 14.5 | % | 100.0 | % | |||||||||||||||||
(1) Corporate allocation pro-rated by segment % of total revenue contribution
Three Months Ended June 30, 2023
| Gaming | Virtual Sports | Interactive | Leisure | Corporate Functions | Total | ||||||||||||||||||||||
| Total Adjusted Revenue | $ | 26.7 | $ | 15.1 | $ | 6.7 | $ | 26.5 | $ | — | $ | 75.0 | |||||||||||||||
| Segment % of Total Adjusted Revenue | 35.6 | % | 20.1 | % | 9.0 | % | 35.3 | % | 100.0 | % | |||||||||||||||||
| Adjusted EBITDA | $ | 11.2 | $ | 13.1 | $ | 3.6 | $ | 6.5 | $ | (7.2 | ) | $ | 27.2 | ||||||||||||||
| Corporate allocation(1) | (2.6 | ) | (1.4 | ) | (0.7 | ) | (2.5 | ) | 7.2 | — | |||||||||||||||||
| Segment-level Adjusted EBITDA including pro-rated corporate allocation | $ | 8.6 | $ | 11.7 | $ | 2.9 | $ | 4.0 | $ | — | $ | 27.2 | |||||||||||||||
| Segment Contribution to Adjusted EBITDA | 31.6 | % | 43.0 | % | 10.7 | % | 14.7 | % | 100.0 | % | |||||||||||||||||
(1) Corporate allocation pro-rated by segment % of total Adjusted Revenue contribution
Six Months Ended June 30, 2024
| Gaming | Virtual Sports | Interactive | Leisure | Corporate Functions | Total | ||||||||||||||||||||||
| Total Revenue | $ | 51.1 | $ | 24.1 | $ | 17.5 | $ | 46.0 | $ | — | $ | 138.7 | |||||||||||||||
| Segment % of Total Revenue | 36.8 | % | 17.4 | % | 12.6 | % | 33.2 | % | 100.0 | % | |||||||||||||||||
| Adjusted EBITDA | $ | 17.6 | $ | 20.0 | $ | 10.5 | $ | 7.9 | $ | (14.3 | ) | $ | 41.7 | ||||||||||||||
| Corporate allocation(1) | (5.3 | ) | (2.5 | ) | (1.8 | ) | (4.7 | ) | 14.3 | — | |||||||||||||||||
| Segment-level Adjusted EBITDA including pro-rated corporate allocation | $ | 12.3 | $ | 17.5 | $ | 8.7 | $ | 3.2 | $ | — | $ | 41.7 | |||||||||||||||
| Segment Contribution to Adjusted EBITDA | 29.5 | % | 42.0 | % | 20.8 | % | 7.7 | % | 100.0 | % | |||||||||||||||||
(1) Corporate allocation pro-rated by segment % of total revenue contribution
Six Months Ended June 30, 2023
| Gaming | Virtual Sports | Interactive | Leisure | Corporate Functions | Total | ||||||||||||||||||||||
| Total Adjusted Revenue | $ | 53.8 | $ | 29.9 | $ | 12.6 | $ | 43.6 | $ | — | $ | 139.9 | |||||||||||||||
| Segment % of Total Adjusted Revenue | 38.4 | % | 21.4 | % | 9.0 | % | 31.2 | % | 100.0 | % | |||||||||||||||||
| Adjusted EBITDA | $ | 20.9 | $ | 25.8 | $ | 6.7 | $ | 7.4 | $ | (13.5 | ) | $ | 47.3 | ||||||||||||||
| Corporate allocation(1) | (5.2 | ) | (2.9 | ) | (1.2 | ) | (4.2 | ) | 13.5 | — | |||||||||||||||||
| Segment-level Adjusted EBITDA including pro-rated corporate allocation | $ | 15.7 | $ | 22.9 | $ | 5.5 | $ | 3.2 | $ | — | $ | 47.3 | |||||||||||||||
| Segment Contribution to Adjusted EBITDA | 33.2 | % | 48.4 | % | 11.6 | % | 6.8 | % | 100.0 | % | |||||||||||||||||
(1) Corporate allocation pro-rated by segment % of total Adjusted Revenue contribution
FAQ
What was Inspired Entertainment's revenue for Q2 2024?
How did Inspired Entertainment's Interactive segment perform in Q2 2024?
What new partnership did Inspired Entertainment announce with William Hill?
When did Inspired Entertainment launch Hybrid Dealer™ with BetMGM in Michigan?
