Inspired Entertainment has recorded a revenue of $97.5 million in the third quarter of 2023, up 31% on a reported and 22% on a functional currency basis versus the prior year. The growth was driven by the Interactive segment and low-margin gaming hardware sales.
Q3 results faced significant delays as Inspired postponed their release, originally scheduled for late 2023. The delay stems from challenges, primarily accounting errors, linked to compliance with US GAAP. These errors specifically revolve around accounting policies related to capitalizing software development costs.
Inspired previously said it needed extra time to complete the results, as it worked to restate certain previously issued statements. The Nasdaq stock exchange then gave the company until January 22 to submit a plan to regain compliance, a deadline the provider missed by one day, filing its proposed plan on January 23.
The plan was accepted by Nasdaq earlier this month and the group is now looking to move forward. “We have completed the financial restatement process and, as of today, all amended filings are complete,” Lorne Weil, Executive Chairman of Inspired.
Approximately $70.7 million of total revenue was generated from services, marking a 3.1% increase. The remaining $26.8 million was from product sales, experiencing a significant surge of 378.6%, primarily due to the sale of low-margin gaming hardware.
In terms of segmental performance, Leisure maintains its position as the primary revenue source, totaling $31.7 million and exhibiting a 3.9% increase. In the land-based segment, Gaming revenue faced a 6.7% decline, reaching $22.4 million.
Notably, Inspired highlights an additional $22.7 million in low-margin gaming hardware sales. According to Weil, this contributed to an enhanced overall performance in the land-based segment.
In Q3, Virtual Sports revenue experienced a 6.9% decline, amounting to $13.4 million. This decrease was counteracted by a remarkable 37.7% surge in Interactive revenue, reaching a record $7.3 million.
The net profit for Q3 witnessed a substantial decrease of 58.6%, settling at $7.2 million, while adjusted EBITDA slipped 2.2%, totaling $26.7 million.
Examining the nine months leading up to September 30, overall revenue grew by 18.0%, reaching $241.8 million. Service revenue saw a 3.7% increase to $195.7 million, and product sales spiked by 182.8%, reaching $46.1 million, primarily driven by low-margin gaming hardware sales in Q3.
Despite this, the net loss for the period amounted to $1 million, compared to a $20.4 million profit in the previous year. However, adjusted EBITDA saw a marginal increase of 1.1%, totaling $74.0 million.
“Fundamentally, our business remains very strong, which was reflected in our repurchase of $1.5 million of our stock during the third quarter. We are optimistic about the compelling digital growth dynamics of the business, as a wider audience engages with online betting and gaming while new jurisdictions continue to launch,” Weil said.
“Combined with a resilient land-based business, our diversification and expansion ability reinforce our omni-channel strategy, combining our high-margin, capital efficient digital businesses with our steady land-based businesses.”
Original article: https://www.yogonet.com/international/noticias/2024/02/28/71037-inspired-entertainment-39s-q3-2023-revenue-soars-to-975-million-fueled-by-interactive-growth
