Inspired Entertainment (INSE) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $57.2 million, down 5% year-over-year due to divestitures and restructuring, but core business revenue (excluding divested UK holiday parks and restructured pubs) grew 15% year-over-year, driven by 38% growth in Interactive.

• Adjusted EBITDA increased 29% to $23.7 million, with margin expanding by 1,100 basis points to 41%, reflecting operational efficiency and portfolio optimization.

• Net loss for Q1 2026 was $0.5 million, with adjusted net loss of $0.7 million, impacted by lower tax benefit and higher interest expense.

• Free cash flow reached $15.8 million, enabling $13.3 million in debt reduction and $2.6 million in share repurchases.

• Divestiture of UK holiday parks and restructuring of pubs business completed, reducing headcount and annualized capital spending, and improving margin profile.

Financial highlights

• Service revenue decreased to $53.3 million, while product sales rose to $3.9 million year-over-year.

• Adjusted EBITDA margin improved to 41% from 30% year-over-year.

• Net operating income rose to $9.2 million from $1.6 million, driven by lower SG&A and restructuring costs.

• Adjusted net loss per diluted share was $(0.02), compared to adjusted net income per share of $0.13 in the prior year.

• Free cash flow conversion was 66.8%.

Outlook and guidance

• Management reaffirmed full-year 2026 Adjusted EBITDA target range of $112–$118 million, with margin target increased to up to 45%.

• Sequential Adjusted EBITDA growth anticipated throughout the year, with seasonality reduced post-divestiture.

• 2027 targets: Adjusted EBITDA $125–$135 million, margin 45%+, net leverage 2.0x–2.5x.

• Management expects current cash balances, operating cash flow, and borrowing capacity to fund requirements through May 2027.

• Ongoing remediation of internal controls expected to be completed by year-end 2026.