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revenue: reported a 31% increase to $97.5 million, with strong contributions from the interactive division and low-margin gaming hardware sales.
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Adjusted EBITDA: $26.7 million, with a 27% profit margin, or 36% excluding low-margin gaming hardware sales.
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Net income: A decrease of $3.4 million ($0.12 per diluted share) compared to $9.2 million ($0.32 per diluted share) in the prior year.
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Acquisition of treasury stock: Since the start of the stock repurchase program in May 2022, we have acquired 121,847 shares, totaling approximately 1.2 million shares.
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strategic partnership: Announced hybrid dealership and signed a deal with the NBA to develop an NBA-themed virtual sports game.
On February 27, 2024, Inspired Entertainment Inc (NASDAQ:INSE) released its 8-K filing, announcing its financial results for the third quarter ended September 30, 2023. The company is a leading provider of gaming technology in the gaming, virtual sports, interactive and leisure sectors, with the gaming division being the largest revenue contributor.
Revenues rose 31% to $97.5 million in the quarter, helped by the interactive division and low-margin gaming hardware sales. The company's strategic focus on high-margin, highly scalable digital businesses has led to digital businesses contributing 58% of adjusted EBITDA year-to-date, up from 50% in the prior year period. It is also clear from
Financial performance and challenges
Third-quarter adjusted EBITDA was reported at $26.7 million, with a margin of 27%. Excluding low-margin game hardware sales, profit margins were a solid 36%. However, net income decreased significantly to $3.4 million ($0.12 per diluted share) from $9.2 million ($0.32 per diluted share) a year earlier. This decline was due to the timing of one-time sales and ransomware attacks impacting results. The restatement of the company's previously issued financial statements had a minimal impact on Adjusted EBITDA, which decreased by less than 1% for the full year 2022.
Strategic development and prospects
Inspired Entertainment's digital business, particularly its interactive division, showed strong performance, with revenue up 28% and adjusted EBITDA up 55% year over year, excluding currency effects. The company announced a new iGaming product, Hybrid Dealer, and signed a deal with the NBA to develop themed virtual sports games. These strategic moves are expected to contribute to the company's growth trajectory.
Despite the challenges faced, Inspired Entertainment remains optimistic about the dynamics of digital growth and the resilience of its land-based business. The company's omnichannel strategy combines a high-margin digital business with a stable land-based business, making it well-positioned for future growth.
Performance by segment
The company's gaming division, which excludes low-margin gaming hardware sales, saw revenue decline 7%, and its virtual sports division saw a 7% decline. However, the interactive division reported his 38% revenue increase. The leisure sector increased by just 4%.
Overall, the company's financial results, including its share repurchase program and strategic partnerships, support the company's commitment to delivering value to shareholders and strengthening its market position in the gaming technology industry.
For a detailed analysis of Inspired Entertainment Inc (NASDAQ:INSE)'s financial performance and future outlook, investors are encouraged to check out the complete earnings report and listen to the earnings call.
For more information, check out Inspired Entertainment Inc's full 8-K earnings release here.
This article first appeared on GuruFocus.