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DATE

Wednesday, Aug. 5, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Executive Chairman - Lorne Weil
• President and Chief Executive Officer - Brooks Pierce

TAKEAWAYS

• Revenue -- $60.8 million, up 6% from the first quarter of 2026 despite the exclusion of divested holiday parks revenue and the impact of the pubs restructuring.
• Adjusted EBITDA -- $27.1 million, representing 14% sequential growth and resulting in an Adjusted EBITDA margin of 45%.
• Adjusted EBITDA Margin -- 45%, expanding 1,000 basis points compared to the prior year period following the divestiture of the seasonal holiday parks business and the restructuring of the pubs segment.
• Interactive Revenue -- $15.7 million, growing 15% year over year as market share gains in the U.K. and North America helped offset the impact of increased taxes.
• Interactive Adjusted EBITDA -- $10.3 million, up 13% year over year, reflecting an anomaly where EBITDA growth lagged revenue growth due to a near doubling of the U.K. remote gaming duty.
• U.K. Remote Gaming Duty -- Increased from 21% to 40% effective April 1, which the company reported resulted in its tax impact rising 2.5-fold year over year.
• U.K. Gross Gaming Revenue (GGR) -- Increased 40% year over year in the Interactive segment, driven by content demand and market share growth.
• Retail Solutions Revenue -- $36.2 million, decreasing 37% year over year primarily due to the divestiture of the U.K. holiday parks business and pubs model changes.
• Retail Solutions Adjusted EBITDA Margin -- Exceeded 50% for the first time before corporate allocation, following the removal of lower-margin leisure assets.
• Debt Management -- Repaid $10 million in principal in the second quarter, bringing the year-to-date total to $23.3 million and reducing net leverage to 3x.
• Share Repurchases -- 319,995 shares repurchased for $2.6 million in the quarter, with 707,225 shares repurchased year to date for $5.2 million.
• Fiscal 2026 Guidance -- Management reaffirmed its Adjusted EBITDA target range of $112 million to $118 million.
• Free Cash Flow Conversion -- Projected at 20%+ of EBITDA for the full year, though management noted pro forma conversion is expected to exceed 25% when excluding a one-time $7 million working capital adjustment.
• Greek Terminal Refresh -- Allwyn ordered more than 2,000 replacement machines, with deliveries expected to begin in the fourth quarter; 32% of the 9,000-terminal Greek estate remains to be refreshed.
• Hybrid Dealer Performance -- Turnover increased 13% and GGR grew 25% sequentially from the first quarter to the second quarter.
• Virtual Sports Revenue -- $8.9 million, up 3% sequentially, supported by the rollout of Soccer 4.0 with Bet Builder features.
• Latin American Expansion -- Partnership with Altenar saw turnover increase 55% and GGR rise 61% between the first and second quarters.
• 2027 Financial Targets -- Management projected EBITDA of $130 million, a 47% EBITDA margin, and net leverage under 2.5x by the end of 2027.
• U.K. Retail Estate -- William Hill closed just over 200 lower-performing shops during the quarter, allowing the company to redeploy removed terminals across its broader estate.
• Illinois Terminal Sales -- Sold subscription game packs to more than 92% of the Illinois terminal base, driving improved market performance.

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RISKS

• Weil stated that the U.K. remote gaming duty increase "largely negated this growth, thereby depressing the margin," referencing how a 40% increase in GGR was offset by the near doubling of the tax rate.
• Pierce warned that Hybrid Dealer "may not become as large as we originally anticipated," though he indicated it remains a focused opportunity for Interactive.

SUMMARY

Management at Inspired Entertainment, Inc. (INSE -0.80%) reported that the company's multiyear transformation is shifting its business mix toward less capital-intensive digital segments, resulting in a record Adjusted EBITDA margin of 45%. The company navigated a significant increase in the U.K. remote gaming duty, which doubled from 21% to 40% during the quarter, by growing its underlying U.K. gross gaming revenue. Financial strategy focused on debt reduction and share repurchases, with leverage declining to 3x and guidance reaffirmed for the full year. Operational focus remains on content expansion, including a new studio launch and entry into newly regulated markets like Alberta, Canada.

• CEO Pierce attributed the 40% growth in U.K. GGR to content strength, stating, "U.K. gross gaming revenue grew 40% year-over-year in the second quarter, underscoring the strength of our content and the continued demand for our games."
• The company is expanding its content production capacity with a new studio in Manchester, Bee Reel Games, which is expected to launch its first game by the end of the year and produce one additional game per month thereafter.
• Management noted that the second quarter represented a trough for the year because it was the first full period of the higher U.K. tax rate, and they expect sequential growth to resume as they lap the change.
• In Virtual Sports, the company reported a 50% sequential increase in turnover from BetMGM in New Jersey and Ontario after launching a fully integrated sportsbook solution.
• A contract extension with Paddy Power established the company as the exclusive provider of gaming terminals and content for the operator for four years.
• The company plans to enter the iLottery eInstants vertical in 2027, with content delivery expected to begin next year to leverage existing game creation capabilities.
• CEO Pierce identified Chicago as a significant growth opportunity for VLT placements in late 2026 or 2027, depending on the licensing timeline for major operators J&J and Accel.

INDUSTRY GLOSSARY

• Adjusted EBITDA: A non-GAAP financial metric that excludes specific items like interest, taxes, depreciation, and restructuring costs to reflect underlying operational performance.
• GGR (Gross Gaming Revenue): The amount of money a gaming operator earns after paying out prizes but before deducting operating expenses and taxes.
• Hybrid Dealer: A digital gaming product that combines filmed live actors with random number generator technology for casino games.
• LBO (Licensed Betting Office): A retail establishment in the U.K. permitted to take bets on sports and other events.
• MSA (Motorway Service Area): U.K. roadside service facilities that often house adult gaming centers and amusement machines.
• Remote Gaming Duty: A tax levied by the U.K. government on gambling activities conducted online or through other remote platforms.
• VLT (Video Lottery Terminal): A type of electronic gaming machine typically operated by a state or provincial lottery.

Full Conference Call Transcript

Operator: Good afternoon, everyone, and welcome to the Inspired Entertainment Second Quarter 2026 Conference Call. [Operator Instructions] Please note that today's event is being recorded. Before we begin, please refer to the company's forward-looking statements that appear in the second quarter 2026 earnings press release and in the accompanying slide presentation, both of which are available in the investor section of the company's website at www.inseinc.com. These also apply to today's conference call. Management will be making forward-looking statements within the meaning of United States securities laws.

These statements are based on management's current expectations and beliefs and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in such statements. For a discussion on these risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. During today's call, the company will discuss both GAAP and non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in today's earnings release and slide presentation, which are both available on the website. With that, I would now like to turn the call over to Lorne Weil, the Company's Executive Chairman. Mr.

Weil, please go ahead.

A. Weil: Thank you, operator. Good afternoon, and thank you for joining our second quarter conference call. I'll begin with some overarching comments, and will then hand it over to Brooks, who will discuss the business in significantly more detail. As you'll hear in a few minutes, there was a lot going on in the first half of the year. And there's even more in the second half. Revenue and EBITDA of $61 million and $27 million, respectively, in the quarter were about where we expected. And EBITDA was a little ahead of consensus.

Comparison to the second quarter of 2025 isn't too meaningful because of the exclusion in 2026 of the divested holiday parks revenue and income, which were seasonally strong in 2025, as well as the impact of pubs restructuring. At the same time, however, it's instructive to compare the first and second quarters of 2026 to each other to get a sense of sequential momentum. In that case, second quarter revenue and EBITDA were 6% and 14% respectively from the first quarter, despite the impact of the near doubling of the UK remote gaming duty beginning in April, a subject to which I will return in a moment.

As a result of the combined holiday parks sale and pubs restructuring, together with the momentum in our continuing digital and retail businesses, our EBITDA margin expanded by 1,000 basis points year-over-year to 45%. In parallel, we have year-to-date retired $23 million in debt, repurchased over 700,000 shares and reduced our net leverage to 3x. Slide 4 confirms our 2026 EBITDA target range of $112 million to $118 million and guides to free cash flow conversion for the year of 20%+ of EBITDA. For reasons I will explain more fully later on the call, the true operating free cash flow of the business in 2026 has in fact been significantly better than what can be seen from the reported results.

And for the year, we expect that on a pro forma basis, it will be in excess of 25% versus the 20% shown on the slide. The impact of the increase in the UK gaming duty, which went into effect on April 1st, is something we need to unpack a little more fully in order to fully understand how the rest of the year will unfold. As illustrated on Slide 5, worldwide year-over-year growth in interactive revenue and EBITDA in the second quarter were 15% and 13% respectively. A decent but totally anomalous result, in that historically Interactive EBITDA has consistently grown meaningfully faster than revenue due to operating leverage in the business.

The cause of the second quarter anomaly is of course the UK remote gaming duty. On Slide 5, we illustrate that our UK gross gaming revenue in the second quarter was 40% up year-over-year. I should emphasize this was our gross gaming revenue, not the gross gaming revenue of the U.K. market itself. But the near doubling of the tax largely negated this growth, thereby depressing the margin. The compounding effect of the increase in our GGR of 40% with the doubling of the tax rate meant that in absolute terms, our tax impact went up 2.5x from year to year.

For the balance of the year, the anomaly will continue to distort year-to-year comparisons, but sequentially the situation will be quite different. In a moment, Brooks will show how in each of the last 3 years, consecutive second half interactive volume growth was well ahead of first half, with EBITDA growth even faster. Since the increased tax was fully in effect in this year's second quarter, we can anticipate that as we move through the balance of this year, the sequential relationship between EBITDA and revenue will revert to the historic pattern, showing operating leverage. And with that, I'll hand it over to Brooks.

Brooks Pierce: Okay, thanks, Lorne. As usual, I'll provide more detail on our business segment in the second quarter and share an update on the key initiatives we're focused on for the second half of the year. Our Q2 results demonstrate continued progress in transforming the business into a more digital-led, less capital-intensive model, while increasing adjusted EBITDA, expanding EBITDA margins, generating stronger cash flow, and giving us the flexibility to continue deleveraging and repurchasing shares where appropriate. We discussed these priorities for some time and we are pleased to see the benefits coming through, particularly with EBITDA margin reaching 45% by the end of the second quarter, tracking in line with our full year guidance.

Moving over to Slide 7, Retail Solutions performed very well in the quarter, executing against our margin expansion strategy following last year's sale of the holiday parks business and the restructuring of our pubs segment. And as a result, the business delivered Adjusted EBITDA margins before corporate allocation of more than 50% for the first time. Performance was driven by continued cash box growth across our U.K. retail businesses, including the licensed betting offices, MSAs, pubs, AGCs, and bingo. As previously discussed, William Hill closed just over 200 shops during the quarter, and these closures were largely their lower performing locations, which improved the performance of the remaining William Hill estate.

At the same time, we successfully redeployed the removed terminals across our broader estate with further placement opportunities still ahead. In Greece, we delivered year-over-year cash box growth and further expanded our market-leading share, supported by our latest Vantage cabinets and our best-in-class content. The Vantage Slant cabinet has delivered particularly strong gains in Greece, which were reinforced by Allwyn's additional order of more than 2,000 replacement machines. We expect to begin delivering those units in the fourth quarter of this year as part of the ongoing refresh of our Greek estate, with 32% of our 9,000 terminals yet to be refreshed.

We also installed 125 terminals for AGLC in Alberta this quarter, further strengthening our position in the important Canadian VLT market. A key part of our Retail Solutions strategy is continually refreshing content to keep players engaged. And during the quarter, we sold subscription game packs to both AGLC and to more than 92% of our Illinois terminal base, which has driven the best performance in that market we've seen to date. We're also leveraging our omnichannel strategy by bringing successful online titles into retail and early results are encouraging.

Wolf It Up has proven to be a top game in multiple retail markets in the UK and North America, demonstrating our ability to translate online game success into retail performance. Moving over to Slide 8. The Interactive business continued to perform well with adjusted EBITDA growing approximately 13% year-over-year despite the impact of the U.K. remote gaming taxes nearly doubling from 21% to 40% beginning on April 1st. We continued to gain market share in the U.K., which helped offset some of the tax impact we had previously guided to. As Lorne mentioned, U.K. gross gaming revenue grew 40% year-over-year in the second quarter, underscoring the strength of our content and the continued demand for our games.

On this slide, you'll see the pattern of Interactive plays over the last four years and how each year the lines overlay one another in virtually the same way. As you can see, that pattern didn't change in 2026, despite the introduction of the U.K. tax changes on April 1st. If this historical pattern continues for the remainder of 2026, as it has in prior years, we expect the second half of the year to grow in a similar trajectory, giving us confidence in our second half targets. We've also continued to gain share in North America, led by the performance of our Cash Bank family games across operator customers.

We took advantage of the World Cup fever and released several soccer-themed skins on our most popular franchise brands. And these games kept players as engaged as the World Cup did for fans across the globe. In July, we launched on day one of Alberta's newly regulated market with all major operators, and we're very excited about this market. As we see further opportunity to leverage content that has already proven successful throughout Alberta through AGLC and also Ontario and expand our presence over time. Hybrid Dealer is also gaining momentum with turnover increasing 13% and GGR increasing 25% from Q1 to Q2. In Q2, we launched our branded Wolf It Up!

Roulette game with DraftKings and added key U.K. operators such as Betfred, which contributed to this growth. We're also developing a bespoke BetMGM game based on The Price Is Right license for delivery by the end of the year. While Hybrid Dealer may not become as large as we originally anticipated, it certainly represents a focused opportunity within Interactive and we continue to see attractive growth potential as we expand our offerings and add new customers. And finally, we've committed significant resources to expanding our iLottery eInstants capabilities and expect to begin delivering games into that vertical next year with plans that further leverage our content creation capabilities in all of these areas.

Moving over to Slide 9, we continue to invest in our content creation capabilities, including the building out of our newest content studio in Manchester. Bee Reel Games is generating a lot of buzz. Sorry about that. I couldn't help it. It is expected to launch its first game by year-end. As I've said before, the feedback we hear most often from operator customers is that they love our content, they just want more of it. So our new studio is expected to produce 1 additional game per month with a focus on developing more market-specific content that complements and expands our portfolio of franchise brands.

Moving to Slide 10, we anticipate stronger momentum across Interactive in the second half, which is traditionally higher than the first half due to our seasonal holiday game releases, one of our key strengths. The fourth quarter in particular has been our strongest period with last year's revenue increasing by over 17% and adjusted EBITDA increasing 23% compared with the third quarter. And we expect a similar seasonal uplift in 2026. In addition, we have several upfront custom game development payments scheduled for the fourth quarter, which we expect will provide an additional incremental benefit.

Moving over to Slide 11, our Virtual Sports segment delivered another quarter of stable results supported by several key initiatives launched late in the quarter that we expect to drive growth in the second half of the year. BetMGM now has a fully integrated sportsbook solution in New Jersey and Ontario and turnover increased 50% from Q1 to Q2 with early July results showing continued growth. We also launched with BetMGM in Alberta and with other key customers there, including bet365.

Overall Virtual Sports revenue increased 3% sequentially, driven in part by the rollout of our Soccer 4.0 with the Bet Builder feature to key customers, as you can see in the slide, including Allwyn in Greece and Betano across Latin America. During the World Cup period, these customers saw a 6% increase in turnover generated from this product, and we'll continue to roll this product out to additional customers on a worldwide basis. Momentum is also building through the broader distribution of our Virtual Sports portfolio to sportsbook providers such as Playtech, where we recently just went live with the Malta Lottery.

Moving over to Latin America, our partnership with Altenar delivered significant growth with turnover up 55% and GGR up 61% from Q1 to Q2 while adding several new customers and building a strong pipeline. We're also expanding in the lottery space with a Q3 launch anticipated with the Mass Lottery through our partnership with Aristocrat Interactive, which will bring us to being live in 4 lottery states. We expect to update the market later this year on a few key customer additions and product enhancements. Virtual Sports remains a unique, differentiated product with high margins and significant barriers to entry, and we continue to view it as an important part of our digital strategy.

Overall, we're pleased with the second quarter and the first half results, and we look forward to updating you on our continued progress in the second half. And with that, I'll hand it back over to Lorne.

A. Weil: Thanks, Brooks. That was a great deep dive into the range of initiatives going on throughout the company. On Slide 12, we summarize the transformation we anticipate playing out through the end of 2027. The midpoint of EBITDA and EBITDA margins are expected to reach $130 million and 47% respectively. Leverage is projected to decline to under 2.5x. And free cash flow conversion should comfortably be between 25% and 30%. Let me now return to the subject of pro forma free cash flow that I referenced earlier on.

As a result of the contractual working capital adjustments associated with the restructuring of our pubs business, we had a one-time non-recurring cash outflow in the first half of 2026 of approximately $7 million, which is fully reflected in the reported free cash flow numbers. In that case, the free cash flow projection for the year of $23 million, shown on Slide 13, becomes $30 million on a pro forma basis, or over 25% of EBITDA. As our business mix swings more towards less capital intensity and our declining leverage generates interest savings, we can expect that the conversion percentage will continue to improve from 25%.

And then finally on Slide 14, not to beat a dead horse, but all this comes together in the slide where we reprise the elements of the '26, '27 plan. I think that speaks for itself and it really doesn't require much comment. And with that, we can turn to the operator to Q&A, please.

Operator: We will now begin the question and answer session. [Operator Instructions] Your first question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group.

Ryan Sigdahl: I want to start on Interactive, staring at Slide 5, but the growth decelerated pretty substantially. You explained that U.K. tax increase and the flow-through of that, just given your share of gaming revenue there. But curious if you can double-click into that what the U.K. revenue performance was versus elsewhere or what the mix of the U.K. is or somehow to try and get a better underlying performance of ex U.S. or ex U.K., excuse me, from an interactive standpoint?

Brooks Pierce: Yes, I'll try to answer the question and see if this is what you're looking for. You know, obviously, as we put with the statistics on here, the GGR in the U.K. specifically was up 40%, but obviously the impact of the tax had the negative impact that you've seen on the revenue and EBITDA performance. In terms of gaming, in essence, we think we gained share in the second quarter in the U.K. The official UKGC numbers. aren't out yet, but certainly in our conversation with some of our biggest operators -- operator customers, they've said to us that we're continuing to kind of climb the ladder of performance with them.

So even though the tax had obviously a pretty negative impact, frankly no more than what we had originally anticipated or guided to. But in essence, we're continuing to grow in both the North American and the U.K. markets.

Ryan Sigdahl: Are you able to give what growth was ex U.K.?

Brooks Pierce: I don't think we break that out. Eric?

Eric Carrera: We don't break it out, but we can get back to you.

Brooks Pierce: Why don't we get back to you, Ryan, on that on the absolute numbers. So we don't give you a number 100%.

A. Weil: We know for sure that the revenue growth outside of the U.K. was significantly higher than it was in the U.K., just because the increase in the tax, I mean, if the tax had doubled from 5% to 10%, that would have been relatively insignificant. When the tax doubles from 20% to 40%, if you go through the algebra, the -- what would have been a 20 -- I'm just indexing it, $20 tax becomes almost a $60 tax. And that comes straight off the top in terms of revenue. So the revenue was positive in the U.K., which is a miracle. Most operators had obviously significantly declining revenues, but it was less than the 15% global Interactive.

Now the point that I was making in my remarks, Ryan, is that once we lap the second quarter, so when we get to next year, then the year-to-year comparisons will have the same tax rate. So if our GGR continues to grow 40%, our revenues will continue to grow 40%, and we'll see a re-acceleration back to where we were before. But unfortunately, we have to suck it up for the balance of this year.

Ryan Sigdahl: Sticking on taxes, I think -- yes, sticking on taxes, I think in the U.K., they've recommended increased tax on online gambling last year. Now they're backing an increase to B2 gaming machines in this year's budget. Curious, what you guys are hearing boots on the ground there and any thoughts you may have around that.

Brooks Pierce: Yes, well, I think one of the things that we're hearing is that the industry probably in the online gaming tax, there was -- you probably will know that there were a bunch of different factions. Horse racing had one view, the betting shops had another view, and the AGCs had yet another view. I think seeing how draconian the measures were and doubling of the tax rate, I think everyone in the industry now feels like they need to be aligned against this.

And you've probably read -- obviously, you read one side about increasing the taxes, but you obviously see on the industry side what the potential job loss and high street kind of decimation could be if the taxes were going up like this group had suggested. So, look, it's impossible to predict, but we're certainly hearing and hopeful that it will be -- if there's any increase in tax, it will be measured and not what that group has suggested.

Operator: Your next question comes from the line of Matthew Maus with B. Riley Securities.

Matthew Maus: Hi, this is Matthew on for Josh. So I had a similar kind of question on Interactive. I'm just wondering, it stepped down -- revenue stepped down sequentially slightly. I'm wondering, is this more of the trough for the year? And how are you thinking about the sequential path from here into the seasonally strong fourth quarter?

Brooks Pierce: Yes, I mean, I think the view is that -- and we tried to illustrate this in the slide with some of the history is that we think sequentially, the Interactive business historically over the last few years has grown. The third quarter is better than the second quarter. The fourth quarter is better than the third quarter, and we see nothing to change our views on that. So we expect it to grow sequentially quarter over quarter.

A. Weil: I mean, the key thing just to come back to your observation is the second quarter sequential observation you made is completely due to the tax. The underlying business is growing like crazy. So now that the tax is in the calculation in the second quarter, the third quarter will reflect the full growth in the GGR because there'll be no increase in the tax to offset it. So it's -- the second quarter is definitely a [ trough ]. And the third and fourth quarter should look very good.

Matthew Maus: Great. Sounds good. Last question for me is mainly just on free cash flow conversion. I mean, you're guiding to 20% plus this year. I'm wondering what carries the conversion higher in the back half? And as leverage approaches closer to 2.5x, does that open a refinancing that brings down the cash interest you're paying?

A. Weil: Yes, so the main difference is that, as I mentioned in my remarks, that in the first half, we had the $7 million working capital adjustment associated with the restructuring and shutting down of part of our pubs business. And that was pure cash outflow that directly impacted the free cash flow in the first half, which we don't expect to see in the second half. Well, we know we won't see it in the second half. So without overly complicating it, that's the main reason.

Operator: Your next question comes from the line of Barry Jonas with Truist.

Barry Jonas: Hey guys apologies if this was addressed, but the U.K. growth offsetting the U.K. tax increase, very impressive. Help us understand how do you think those gains will be sustainable? I mean is this really just content driven or do you think once you lap the William Hill reallocations, market share gains will potentially slow?

A. Weil: Well, the William Hill reallocations -- the William Hill allocations that's all the retail thing, Barry. So that wouldn't have anything to do with the digital market.

Brooks Pierce: But I can answer -- go ahead, Barry. I'm sorry.

Barry Jonas: No, apologies there. Yes, just how we understand the sustainability of these market share gains.

Brooks Pierce: Yes, I mean, I think, look, we've shown pretty consistent growth in the U.K. Over the last few years, I think we've gone from kind of 3% or 4% to over 11%, approaching 12%. And I think as we talked about in the second quarter, where a lot of people might be kind of exiting the market because of some of these constraints, we're pretty much doubling down in the U.K. And part of our new content will be producing games not only for North America but for the U.K. as well. So we're confident that we'll continue to grow our share in the U.K.

A. Weil: The other point to add to that, Barry, is that in the U.K., is the one market where we have a very significant retail machine estate. And we know one of the major drivers of online performance is the multi-channel effect of people seeing the games in betting shops and arcades and so forth. And then when they [ leave ] playing those games on their phone or on their computer. So, as we introduce more and more new games into the retail market, in addition to the introduction of games just for online, we're creating that push for our games.

Brooks Pierce: Yes, I think that Lorne is right. And that probably goes also a way in validating the kind of disparities between our market share and the U.K. versus, what we're getting in North America. Our U.K. share is more than double what we have in North America. Both are growing nicely. But Lorne is right. The footprint where you go any place in the U.K. where there's a gaming machine, you're going to see our games. And naturally, people play them online. Obviously, we get that same benefit in Greece.

Barry Jonas: Got it. Just for a follow-up question. You repaid debt and bought back stock in the quarter. How are you thinking about capital allocation priorities from here?

A. Weil: We're thinking about it in the same way. We think there's clearly benefit to debt reduction because, obviously, it not only produces a dollar-for-dollar absolute reduction in interest costs, it helps the computation of the stock value. And as we hit leveraging points, our spread declines. So we get a double or even a triple whammy for paying down debt. On the other hand, you don't have to be a financial genius to believe that at the kind of levels of stock price where we are now, there's tremendous benefit to allocating stock to -- allocating cash to share repurchase.

So I think we're certainly going to allocate all of our excess cash one way or another to debt repayment stock repurchases and the proportions will probably shift from quarter-to-quarter depending upon specifically what we're trying to accomplish, but we certainly intend to continue to do both.

Operator: Your next question comes from Jordan Bender with Citizens JMP.

Jordan Bender: Maybe just follow up on Barry's question a little bit. There's a provision that as your leverage gets lower, your interest rates drop on your debt and you kind of just talked about the mix between buying back stock and paying down debt, but is it kind of fair to assume then that M&A just could be off the table for the time being as you kind of seek lower leverage levels?

A. Weil: No, I wouldn't ever put M&A off the table. We have a pretty carefully designed template in terms of how we think about M&A. But if we have an M&A opportunity that has significant synergies with our existing business and which can immediately be accretive, then we'll definitely consider it. So yes, I mean, certainly to give the full picture of capital allocation, we would consider debt reduction, share repurchase, and potential acquisitions. But when we get that question on these kinds of calls about capital allocation, I don't want to speak for Barry, but normally the question asker is referring to debt reduction and share repurchase.

Jordan Bender: Understood. Okay. And then in the slides here you have -- on the Interactive slide you have higher incremental margin as Interactive scales, which obviously makes sense. We can kind of look back historically. We kind of talked about the Interactive EBITDA margin in the quarter that somewhat took a step down. But with margins with -- in that business kind of sitting here and here and near all-time highs, like realistically, where can we kind of get EBITDA margins to over the next couple years?

Brooks Pierce: Just to be sure I'm answering that question, Jordan, are you talking about overall or just Interactive?

Jordan Bender: Just your Interactive margins.

Brooks Pierce: Yes. I mean, look, obviously, with the scaling opportunities, we think we can increase those margins of several points, but I don't think it's going to be -- this is not going to be a 10% or 15% swing. This is -- I think the Interactive margins are close to 70% now already, which is pretty healthy.

Jordan Bender: Okay. Yes, the question, I guess, would have been, are we near kind of that ceiling? But you did answer that the way I was trying to ask it. So I appreciate it.

Operator: Your next and final question comes from Chad Beynon of Macquarie.

Chad Beynon: I wanted to start with Retail Solutions. So you talked about in the presentation, the 2,000 terminals that'll be delivered in Greece. Wanted to confirm that those are kind of the standard rev share that you already have out there. And then I'm assuming the capex for the year the $30 million to $35 million. Is it fair to assume that a good amount of that comes from this deliverable? I'll start with that one, and then I have a couple follow-ups.

Brooks Pierce: Well, in regards to the terms, yes, there's nothing changing from the kind of last batch. The only thing I would say is the Slant terminal that's kind of doing extraordinarily well. It's probably going to be more of the mix, a, because that's the stuff that's probably makes the most sense to replace and because it's higher performing from a yield management standpoint. They're going to take more Slant terminals than they are our uprights. But just in terms of the capex, Eric, you want to...

Eric Carrera: Yes, sure. Just that capex, we referenced cash CapEx. So it excludes any CapEx that is customer funded, which would be Greece, among some other businesses. So that excludes it, just to answer your question, Chad.

Chad Beynon: Also on Retail Solutions, it sounds like Chicago, the process continues to move along. I think there's been a few dozen applications and potential licenses at this point. Is this factored into the fourth quarter? And how are you thinking about the opportunity for Chicago VLTs?

Brooks Pierce: Well, if it gives you any indication, I'll be in Chicago all next week. So I think you can read from that, that I think it's a pretty important market for us. I know Accel reported earlier and they talked about having the Chicago maybe actually going in the fourth quarter where they had originally said it was the first quarter of 2027. We're kind of dependent on -- it's obviously dominated by 2 big operators, J&J and Accel, who we have very good relationships with both. So we're monitoring it close. We still think Chicago is going to be a very strong market whether it's fourth quarter of this year or moving into 2027, kind of hard to tell.

My guess is if I had to guess, I would say we'll get some this year, but probably more next year.

Chad Beynon: And then lastly, around just the World Cup exposure with your virtual product, I know the placement with BetMGM was improved, but just any commentary in terms of if there was more penetration, more exposure to customers, either in the United States or in some of the bigger European markets.

Brooks Pierce: Yes, I wouldn't say it was more exposure per se, although obviously BetMGM, this was the first time with the World Cup that we would have had them where the other customers, bet365 and Betano. We would have had that in the past. I think we've -- we said in the slide presentation, we had an uplift of about 6%. Some of that was World Cup, but some of that was also probably the product, this Soccer 4.0, which is the latest greatest graphics and included the Bet Builder functionality, which is essentially, like, same-game parlay.

So I think some combination of all of those helped us for the World Cup, and it'll be interesting to see as we go through the year, particularly now with MGM. We've been saying for a long time we really wanted a big sports betting operator in the States to be having a fully integrated virtual package and now MGM does, and we would hope that some of the others will come along with that. But I'll be very interested to see how when football season starts, American football for anyone who's questioning whether that's soccer or football, to see if we're getting some continued uplift that we saw that came out of the World Cup.

So, yes, pretty excited about a number of things in the second half of the year for Virtual Sports.

Operator: There are no further questions at this time. I will now turn the call back to Lorne Weil, Executive Chairman, for closing remarks.

A. Weil: Thank you, operator. And again, everyone, thank you for taking the time to listen to the call. I think we're pretty much on the trajectory that we've been talking about for some time. We're -- as I think should have been clear from my remarks and Brooks', we're very sanguine about the third and fourth quarter and as we move into 2027. And we're excited to meet with you again in 3 months and tell you how we're doing. So thanks again.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.