February 11, 2019 | 2:32 PM by Jay Kunstman | jkunstman@jaguaranalytics.com

Behind The Numbers – Inspired Entertainment (INSE)

Inspired Entertainment is a global games technology company, supplying Virtual Sports, Mobile Gaming and Server Based Gaming systems with associated terminals and digital content to regulated lottery, betting and gaming operators around the world. Inspired currently operates approximately 30,000 digital gaming terminals and supplies its Virtual Sports products through more than 40,000 retail channels and over 100 websites, in approximately 35 gaming jurisdictions worldwide.

This morning, the company was out with Q4 earnings:

-EPS of ($0.23) vs ($0.16) estimate – Miss
-Revenue of $30.7M vs $34.9M estimate – Miss

Inspired said that its Average Installed Base increased 15.4% Y/Y due to the continued terminal rollout in Greece and growth from new contract awards in the U.K. Licensed Betting Office.

Total OPAP Terminals installed increased to 7,100 with management saying the roll out into Greece continued during the period, with a further 1,300 terminals being deployed on site and live as of December 31st, 2018 and a further 300 since the quarter ended.

Finally, in Italy, Customer Gross Win per unit per day increased by 16.9% across all customers compared to the same period last year, driven by new content releases


Company has announced that it was changing its fiscal year from September 30 to December 31 beginning with the 2019 year, making this period a transitional one. That being said, company expects good performance in the first quarter. They established Q1 2019 Adjusted EBITDA guidance that could represent approximately 20% growth year over year in functional currency.

They are also expecting solid performance in Q1 driven by “Continued growth in Greece and Italy, as well as Interactive and additional hardware sales opportunities in conjunction with a reduced overhead expense base,” said Lorne Weil, Executive Chairman.

Finally, as the company moves from the first quarter into the second quarter, they expect to begin to see the impact of the implementation of new regulations as a result of the Triennial (10-K Snapshot Below). “We have been investing in the resources necessary to satisfy the new requirements and meet player needs in the UK and we are extremely optimistic about our strategy to mitigate a portion of any potential impact.”

U.K. Focus

Finally, based on the company’s press release, a lot of attention was focused on the U.K.:

CFO Stewart Baker would say, “During this reporting period we started the process of consolidating our six facilities throughout the U.K. into two primary locations, which has resulted in lower headcount and increased efficiencies. These redundancies and a number of other unique line items contributed to a larger reduction in cash flow during the quarter than we otherwise would have exhibited. However, these measures have long-term margin benefits and will help to prepare the organization for the new regulations in the U.K.”

As far as content:

-Over 150 “Flex” B3 Terminals to a Major Customer in the U.K. are expected to commence installation in the first quarter will result in ongoing recurring rental fee and content revenue share to Inspired.

-Over 100 “Sabre Hydra” Terminals sold to a major casino customer in the U.K. and are to be installed during the early half of 2019.

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