Inspired achieves record revenue and earnings in 2022

The provider reported a year-on-year increase in revenue across its gaming, virtual sports, interactive and leisure businesses, with executive chairman Lorne Weil saying this reflects the continued execution of its strategy.

Reflecting on the past year, which was also helped by a record performance in the fourth quarter, Weil said Inspired is now well placed to focus on “significant” growth opportunities in core markets, as well as new markets and additional verticals.

“Results reflect the continued execution of our strategy; our fourth-quarter results ended a record year for Inspired, in which we achieved double-digit, year-over-year top- and bottom-line growth and reached record annual revenue and a milestone $100.0m (£82.7m/€93.5m) in adjusted EBITDA, even in the face of significant adverse currency movements,” Weil said.

“Our results are evidence of our ability to drive high double-digit growth in our high-margin, capital efficient digital businesses, while managing our land-based businesses for modest growth, decreased capital intensity and growing cash flow.”

Fourth quarter

Revenue in the three months to 31 December 2022 amounted to $78.6m, up 17.3% from $67.0m in the corresponding period in 2021. This included $60.8m in services revenue and $17.8m worth of product sales revenue.

Breaking this down by business segment, gaming revenue climbed 41.8% to $38.0m, helped by strong UK betting shop performance and growth in the non-betting shop UK gaming machine installs, as well as the addition of a lottery systems contract in the Dominican Republic.

Virtual sports revenue jumped 35.5% to a record $14.9m, helped by an 83.0% rise in online virtuals revenue, while interactive revenue also edged up 10.5% to $6.3m, driven by growth in the US and Canada.

However, Inspired also reported a 17.5% drop in leisure revenue to $19.4m as revenue from holiday parks and pub customers both fell year-on-year, with only the motorway services segment experiencing an increase.

Turning to spending and while costs of service and product sales were up, Inspired was able to reduce expenses elsewhere, with both selling, general and administrative spending and depreciation and amortisation costs down.

After accounting for $6.5m in additional finance expenses – primarily interest costs – this left a pre-tax profit of $5.9m, compared to a $2.7m loss at the end of Q4 in 2021. Inspired paid $2.8m in income tax, resulting in a net profit of $3.1m, in contrast to the $1.2m loss in the previous year.

Inspired also included a $4.8m foreign currency translation loss and $3.5m worth of actuarial losses on pension plan, meaning the provider ended the quarter with a $5.0m net loss, compared to a $1.8m profit in 2021.

However, adjusted EBITDA for the quarter was 16.4% higher at $25.6m.

Full year

Looking at the full year and revenue in the 12 months to 31 December reached $285.4m, up 36.8% year-on-year. This included $251.8m in service revenue and a further $33.6m worth of product sales revenue.

Gaming revenue jumped 37.2% to $111.7m, while virtual sports revenue climbed 53.9% to $55.4m, interactive revenue edged up 1.3% to $23.1m and leisure revenue increased by 39.0% to $95.5m.

Costs-wise, spending was higher almost across the business, with only depreciation and amortisation and acquisition and integration-related transaction expenses lower year-on-year.

However, with additional financial down 37.9% to $23.4m, this, coupled with the revenue growth, meant pre-tax profit reached $25.5m, compared to a $38.3m loss in the previous year. 

Inspired paid $3.2m in income tax, meaning a net profit of $22.3m, in contrast to a $36.7m loss in 2021. The provider also noted an additional $2.5m in other profit, with an $8.2m gain on foreign currency translation more than offsetting a $6.4m actuarial loss on pension plan.

This resulted in a comprehensive net profit of $24.8m, compared to a $24.0m loss in 2021, while adjusted EBITDA also jumped 55.6% to $99.6m.

“As we look ahead to 2023 and beyond, the stability and resiliency of our business model allows us to focus on significant growth opportunities in the future, which we intend to capture by using our best-in-class differentiated content to grow our presence in core markets, expand into new markets and extend into additional verticals,” Weil said.

“The underlying momentum that has been building throughout 2022 and the strong demand that exists for our products across each of our business lines further supports our confidence in the long-term outlook for the company.”