Inspired Entertainment has published its Q1 financial results this week. Total revenue for the period ended March 31, 2019, fell to $33.7m, marking a year-on-year decrease of $3.8m. The slow down was driven, said the firm, mainly by adverse currency movements of $2.5m, as well as a reduction in non-recurring software licenses and nil margin sales of hardware.
Excluding these sales (software licenses of $1.3m and nil margin hardware of $3.6m), revenue increased $3.6m, or 11%, on a functional currency (£) basis, and $1.1m, or 3.3%, on a reported basis.
Adjusted EBITDA for the three months ended March 31, 2019 was $13.7m, a year-over-year increase of 18.5% on a functional currency basis and 10.4% on a reported basis. Adjusted EBITDA margin increased to 40.7% from 36.6% in the prior year, primarily as a result of significant overhead savings, more profitable revenue mix, and more effective business processes.
“Our results for the quarter were in line with our guidance, driven by solid participation revenue, growth in Virtual Sports, and reduced overhead expenses,” said Executive Chairman Lorne Weil. “Most importantly, our high-margin Virtual Sports business, which includes Interactive, delivered a great underlying performance, increasing 11% on a functional currency basis.”
Weil added: “As we move into the second quarter, we have begun to see the impact of the April implementation of the new £2 stake limit in the UK. I applaud the efforts of our UK team, which has successfully remodeled and converted our games and software to satisfy the new requirements on an accelerated timetable.
“We continue to see strong growth in our Virtual Sports and Interactive businesses and we are extremely focused and encouraged by our business development activity across a number of key territories. In particular we have a unique opportunity and a clear strategy to build our VLT, Virtual Sports and Interactive businesses in North America and we expect to see more meaningful results starting in the fourth quarter of 2019 when we plan to commence shipments of VLTs into the market.”
- Total Revenue for the First Quarter of $33.7m
- Functional Currency Virtual Sports Revenue Increased 11% Year-over-Year
- Net Operating Loss Narrows to $0.7m from $0.9m in the Prior Year
- Functional Currency Adjusted EBITDA Growth of 18.5% Year-over-Year
- Adjusted EBITDA Increased to $13.7m from $12.4m in the Prior Year
- Cash Generation of $3.0 Million During the Quarter