Inspired Entertainment (INSE) Q4 2024 earnings summary

Executive summary

• Adjusted EBITDA for Q4 was $30.9M, up 22% year-over-year, with Interactive Adjusted EBITDA up 105%.

• Q4 2024 revenue reached $83.0M, led by record Interactive revenue up 45% year-over-year.

• Full-year adjusted EBITDA reached $100.1M, with full-year revenue at $297.1M and net income of $65.8M.

• SEC inquiry has been closed with no further action, removing a regulatory overhang.

• The company is actively exploring the sale of its holiday parks business and restructuring in anticipation.

Financial highlights

• Interactive segment Q4 revenue grew 45% and EBITDA 105% year-over-year; now 22% of total EBITDA, expected to exceed 25% in Q1.

• Q4 net income was $68.0M; adjusted net income was $4.7M; Q4 adjusted EBITDA margin was 37%.

• Gaming segment Q4 EBITDA grew 42% year-over-year, driven by hardware sales; full-year margin improved by 260 bps.

• Leisure segment Q4 revenue grew 7% year-over-year, with higher EBITDA from margin improvements and one-time adjustments.

• Over 85% of revenue is contractually recurring, and digital businesses now represent more than 50% of combined EBITDA.

Outlook and guidance

• Digital business expected to approach 60% of EBITDA by year-end, with interactive and virtual sports as key drivers.

• Management expects continued growth in Interactive and Gaming, with a robust Hybrid Dealer pipeline and new launches planned in 2025.

• Virtual sports business is stabilizing and expected to return to growth, supported by new products and market expansion, especially in Brazil.

• Cash balance for Q1 is expected to be slightly below previous guidance due to timing of receivables and accelerated supplier payments.