Gaming content and technology provider Inspired Entertainment has revealed its quarterly results for the three months ended June 30. The company reported a yearly increase in total revenue by 13%, reaching $80.4 million, up from $71.3 million in Q2 last year.
The increase was driven by the company’s core gaming segment, where the revenue jumped by 23.5% to $31.5 million. Meanwhile, leisure was slightly up by 2% to $26.5 million, and the company also recorded increases in virtual sports (7% to $15 million) and interactive (28% to $7.4 million)
Lorne Weil, Executive Chairman of Inspired, said: “Revenue grew in each of our business lines during the second quarter reflecting solid underlying fundamentals. The digital businesses once again generated record reported quarterly revenue and are steadily contributing a greater proportion of our earnings and cash flow.”
“Interactive revenue increased 28% year-over-year on a functional currency basis, posting a quarterly record as we increased our footprint through new customer launches as well as revenue growth from existing customers.”
The company’s virtual sports recorded quarterly revenue of $15 million with “very high conversion to earnings and cash flow,” as Adjusted EBITDA grew faster than revenue, noted Weil. Inspired negotiated long-term extensions for Virtual Sports strategic partnerships with both bet365 and Paddy Power during the period.
Inspired, however, reported a decline in its net profit for Q2 after an increase in its expenses by 12.3% to $80.1 million. The company generated a net income of $4.1 million in Q2 this year, as compared to a net income of $7.2 million, in the prior year quarter primarily owing to increases in selling, general and administrative expenses, depreciation and amortization expense, interest expense and income tax expense.
Weil also spoke about Inspired’s land-based business and recent initiatives during the quarter that are expected to add to future growth. “We are beginning to benefit from the sales of our new Vantage terminals,” he stated. “Through last week with over 40% of the installations complete, early results indicate an improvement in revenue per machine in the high single digits with the potential to reduce operational costs.”
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The company also reported an increase in revenue for the first half of 2023 at $146.4 million, up by 11 % Y-O-Y. The business generated $126.4 million in service revenue and $20 million in product sales revenue.
The half-yearly spending was higher compared to the same period last year with the pre-tax profit falling by 41.4% to $5.1 million. The company paid $1.2 million in tax, with the net profit reaching $3.9 million, down by 53.6%.
Going forward, Inspired expects further growth. Weil added: “We have an exciting pipeline of new products and further enhancements across our businesses. Most significant is that we are on target to deliver our new National Football League (NFL) product in time for the start of the upcoming season.”
“The long-term fundamentals and health of the business remain very strong,” he added. ”We continue to be very excited about the potential of our offering and the experience the product will deliver to NFL fans globally. In both Virtual Sports and Interactive, we remain more convinced than ever that we are in the early stages of an expanding global opportunity.”