Inspired Entertainment (INSE -6.12%), a gaming technology provider covering casino systems, virtual sports, and interactive gaming content, released its results on August 6, 2025. The business reported GAAP revenue of $80.3 million, ahead of analyst expectations by 6.58%. However, profitability lagged sharply, with Non-GAAP earnings per share (EPS) of $(0.19), missing non-GAAP EPS estimates by $0.31. The company produced a GAAP net loss of $7.8 million versus a GAAP net profit last year. While revenue beat forecasts, bottom-line measures fell short, highlighting a mixed quarter with strong top-line momentum but significant earnings pressures.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.19) | $0.12 | $0.18 | NM |
| Revenue (GAAP) | $80.3 million | $75.34 million | $74.8 million | 7.4 % |
| Adjusted EBITDA | $28.4 million | $24.7 million | 15.0 % | |
| Adjusted EBITDA Margin | 35 % | 33 % | 2.0 pp | |
| Net Income (GAAP) | $(7.8 million) | $1.4 million | NM |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Recent Focus
Inspired Entertainment operates across four primary segments: Gaming, Virtual Sports, Interactive, and Leisure. Its core activities include supplying gaming terminals, producing virtual sports content, and developing interactive casino and games software. The company generates most of its revenue through long-term, participation-based contracts with retail operators and digital gaming providers.
Diversification is central to its strategy—segment balance helps it navigate industry cycles and local trends. The business focuses on launching innovative gaming content and expanding into key markets, particularly in North America and regulated international regions. Stability comes from recurring revenues, strong contract renewal rates, and innovation in proprietary game development.
Quarter Highlights and Segment Performance
During the quarter, revenue advancement was driven largely by Interactive gaming products—online slot and table games that run on digital casino platforms. Interactive revenue grew 45% year over year, propelled by growth in North America and the U.K. Adjusted EBITDA in the Interactive segment rose 49% year-over-year, with the Interactive segment Adjusted EBITDA margin expanded to 67%, thanks to scalable digital operations. Notably, the new Hybrid Dealer virtual casino product gained initial traction with several operators, including BetMGM, Caesars, bet365, and Loto-Québec. Management called Interactive “a key growth engine.”
The Gaming segment, which delivers physical terminals and content to retail venues, Adjusted EBITDA for the Gaming segment increased 35% year-over-year, reflecting realized cost efficiencies. Success came from the roll out of Vantage cabinet terminals with William Hill and new machine deployments in Greece. However, gains were partly offset by slower retail demand in parts of the U.K. outside of key client William Hill, and softer results at other partners like Betfred and Paddy Power.
Leisure, which services sectors like pubs and bingo, Results benefitted from timing shifts in U.K. public holidays, increased play at holiday parks, and growth in Bingo. Management reiterated that Leisure remains capital-intensive and flagged ongoing plans to transition this area towards lower capital investment by prioritizing equipment sales over traditional models.
Virtual Sports, which offers simulated sporting events using advanced computer graphics, remains a challenging area. Revenue dropped 21% and Adjusted EBITDA decreased 31% year over year. While new content and partnerships in Turkey, North America, and Brazil were noted, adoption rates in these newer markets, especially Brazil, remained slow. The segment continued to face regulatory headwinds and tax impacts, weighing on group profits despite some recent stabilization at quarter end.
Strategic Actions, Capital Structure, and Developments
Inspired Entertainment refined its capital structure during the period by refinancing existing debt. It issued £270 million in new senior secured notes due 2030 and arranged a £17.8 million revolving credit facility, pushing out maturities and adding financial flexibility. Management expects the average interest rate to decline to about 9.5% by the end of 2025, contingent on further deleveraging and falling benchmark rates. Cash was $46.3 million as of June 30, 2025, with net debt rising to reflect refinance activity. Total liabilities exceeded total assets, which resulted in a stockholders’ deficit of $9.5 million as of June 30, 2025.
Free cash flow improved as the company continued to focus on lowering capital expenditures. Cash generated from operations (GAAP) was $40.7 million for the first six months of 2025, compared to $3.6 million in the same period last year. Plans to sell the holiday park business and rework the pub business—moving toward more asset-light content models—are underway. If successful, these asset sales could help reduce leverage and enhance future margins.
For the year ended December 31, 2024, recurring revenue from long-term participation and licensing contracts accounted for 86% of total revenue. The company secured a new five-year agreement with Jenningsbet, the largest independent bookmaker in the U.K, covering approximately 570 new Vantage terminals commencing in Q4 2025.
Product portfolio expansion remained a stated focus with the continued rollout of Hybrid Dealer casino games. New localized content was launched in Brazil to engage local audiences, such as V-Play Football Brazil, showing some early success in operator trials. Partnerships spread across North America, Turkey, and the U.K, as the company sought to regain momentum in weaker segments through innovation.
Looking Ahead
Management did not provide formal financial guidance for the next quarter or for fiscal 2025. Leadership instead highlighted strategic priorities: accelerating digital product deployment, improving cash flow, and leveraging asset sales to reduce debt and support capital-light growth. They expect Interactive momentum to continue and anticipate a Virtual Sports recovery in the second half, but offered no specific forecasts.
Investors should monitor the pace of asset disposals, particularly of the holiday park business and changes to the U.K. pub business model. The effect of these moves on debt reduction, margin progression, and free cash flow will be significant. Trends in regulated markets, scaling of new gaming formats such as Hybrid Dealer, and a rebound in Virtual Sports adoption are also key areas to watch as Inspired Entertainment executes its strategy. INSE does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
