Inspired Q1 financials headlined by double digit growth in digital sector

Q1 financials
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Inspired Entertainment has published its Q1 financials for the period ended Mar. 31, 2023, revealing double digit growth in both its Virtual Sports and Interactive segments.

The group’s total revenue increased 9% YoY to $66m (Q1 2022: $60.6m), driven by Interactive revenue of $6.6m, representing 24% growth YoY (Q1 2022: $5.3m) as the firm began to profit from recent investments in new products and platform improvements beginning to pay off.

Inspired’s Virtual Sports revenue of $14.9m also marked a 29% rise on last year’s $11.6m, in a quarter which saw the company announce a partnership to develop VS content through Aristocrat Gaming‘s multi-year global licensing agreement with the NFL.

During the quarter, Inspired also launched its full suite of games – including V-Play Soccer and V-Play Basketball – in Ontario with multiple operators.

Meanwhile, the group’s gaming revenue increased 18% YoY to $27.4m in Q1 (Q1 2022: $23.2m), reflecting ‘ongoing strength and resilience in the aggregate land-based businesses’.

Lorne Weil, Executive Chairman of Inspired, commented: “The year is off to a strong start as we continue to deliver double-digit growth in our high-margin, capital efficient digital businesses, while positioning the land-based businesses for steady growth and capital efficiency to increase cash flow.”

Weil continued: “During the quarter, we also launched our new online Terminator slots game with our UK customers and expect to roll the game out to the rest of our European and North American customers over the coming months. Following the success of our Space Invaders game in North America, we are very excited to see this game perform well in other platforms, as we continue to grow our portfolio of licensed content.

“Furthermore, we are extremely proud that following the success of the Buffalo Wild Wings branded online casino slot game in other states, BetMGM has released it in Pennsylvania as a feature title.”

The group’s gaming revenue, meanwhile, increased 18% YoY to $27.4m in Q1 (Q1 2022: $23.2m), reflecting ‘ongoing strength and resilience in the aggregate land-based businesses’.

Weil concluded: “To say we are excited about the future is an understatement. Our land-based business provides us steady growth and substantial cash generation. Our digital business provides a unique combination of strengths in the industry today, specifically high growth, high levels of profitability and modest capital investment required.”

Inspired’s Q1 Leisure Revenue, however, took a significant hit, dropping 13% YoY to $17.1m (Q1 2022: $19.6m), with this fall primarily attributed to ‘the structured withdrawal of non-core low-margin amusement and prize vend machines’ in Q3 2022, as well as the reduction in the number of gaming machines.

Stewart Baker, Executive Vice President and Chief Financial Officer, added: “We are pleased with our first quarter results and the growth evident across our business even in the face of currency impacts compared to last year. The high quality of our earnings is also translating into cash flow.

“During the first quarter, we more than doubled our cash flow from operations compared to last year and increased our cash position by $3m compared to a cash outlay of $7m in the first quarter of 2022. We remain confident in our strategy and in our ability to continue to deliver consistent results to drive shareholder value.”

Meanwhile, Inspired recently highlighted its commitment to the US online casino space by extending its partnership with FanDuel to cover the Michigan market.