Inspired Entertainment, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter revenue was $61.4 million, a 29% decrease from $86.2 million in the prior year period; like-for-like revenue increased approximately 4% year-over-year, and adjusting for higher UK gaming taxes, revenue grew approximately 9%.
• Net operating income was $10.3 million, up 6% from $9.7 million in the prior year.
• Net loss was $0.1 million compared to a net loss of $1.9 million in the prior year.
• Adjusted EBITDA was $28.2 million, a 13% decrease from $32.3 million in the prior year, but increased 4% sequentially, delivering a record 46% Adjusted EBITDA margin (up from 37% in the prior year).
• Adjusted net income was $2.8 million, a 66% decrease from $8.2 million in the prior year.
• Free cash flow conversion was 22% year-to-date.
• Total debt decreased from $345.2 million at December 31, 2025, to $325.4 million ($322.9 million long-term + $2.5 million current) at September 30, 2026.
• Cash and restricted cash totaled $36.5 million at September 30, 2026, down from $36.3 million at the end of the prior year period (excluding held-for-sale classification changes).

Guidance and Future Outlook:

• Full-year 2026 Adjusted EBITDA guidance was updated to a range of $109 million to $112 million, down from the previous range of $112 million to $118 million, primarily reflecting the suspension of regulated online gaming in Brazil.
• Full-year 2026 Free Cash Flow conversion is now expected to be slightly below the company's 20% target due to the loss of Brazil's earnings contribution in the fourth quarter.
• Management expects to continue generating strong free cash flow in 2027.
• The UK Budget confirmed Machine Games Duty will increase from 20% to 25% effective April 2027; management plans to pursue disciplined mitigation measures to limit the business impact.
• Management remains confident in the strategic direction, citing expansion of higher-margin digital businesses and increasing operating leverage.

Business Segments and Product Lines:

• Retail Solutions: Revenue was $37.4 million (down 39% YoY); Adjusted EBITDA was $19.6 million (down 13% YoY).
• Virtual Sports: Revenue was $8.5 million (down 9% YoY); Adjusted EBITDA was $5.7 million (down 14% YoY).
• Interactive: Revenue was $15.5 million, up 3% YoY; Adjusted EBITDA was $10.2 million (down 5% YoY).
• New Product Launches: Virtual Sports launches with the Massachusetts Lottery and FanDuel are scheduled for the fourth quarter.
• New Customer Agreements: Delivered over 200 Velos Electronic Table Games terminals to Genting Casino (310 total order, remainder in Q4 2026); installed 300 new lottery terminals in the Dominican Republic as part of a 3,000 terminal upgrade program; signed a contract to supply BetMGM with a bespoke Price Is Right® licensed hybrid dealer game for Q4 2026 delivery.
• Market Expansion: Live on day one with both Interactive and Virtual Sports in the newly regulated Alberta gaming market with customers including FanDuel, DraftKings, BetMGM, Rush Street Interactive, Caesars Entertainment, and bet365.

Market and Competitive Landscape:

• The Interactive segment's U.S. business outpaced the U.S. iGaming market.
• Retail Solutions delivered strong performance in the UK and Greece, with opportunities to refresh the installed base in Greece next year.
• Brazil's unexpected shutdown of regulated online betting and gaming affects a business representing approximately 5% of total revenue.
• The UK Budget provided regulatory clarity, removing uncertainty regarding the size of the gaming tax increase.

Risks and Challenges:

• Regulatory changes in the UK, specifically the increase in Machine Games Duty to 25% in April 2027.
• The suspension of regulated online gaming in Brazil, which limits near-term mitigation options for lost contribution.
• Currency fluctuations impacting reported results.
• The company notes that actual results may differ materially from forward-looking statements due to known and unknown risks, including those detailed in their Form 10-K.

Management Commentary and Tone:

• Brooks Pierce, President and CEO, stated that results highlight progress in building a higher-margin, more digital business with record Adjusted EBITDA margins and market share gains in Interactive.
• Lorne Weil, Executive Chairman, noted the transformation has created a higher margin, less capital intensive, and more diversified business with less concentration in the UK.
• Management expressed confidence in a meaningful pipeline of opportunities expected to offset current regulatory impacts.
• Capital allocation priorities for 2027 include disciplined investment, debt reduction, and share repurchases.

Other Key Points:

• The company divested its UK Holiday Parks business in November 2025 and restructured its Pubs business, which contributed to prior-year period comparisons.
• The company repurchased common stock for $5.2 million during the nine months ended September 30, 2026.
• A conference call and webcast were scheduled for November 5, 2026, at 5:00 p.m. ET.
• The company operates as a leading B2B provider of gaming content, technology, hardware, and services globally.