Inspired expects to hit revenue and earnings targets in Q4
Inspired did not set out any figures at this point but did say it hopes to publish its Q4 results next month. The group expects to file its Form 10-K on or before 15 April.
This filing will be some way past the initial time that Inspired was expected to report its Q4 figures. As such, it has now filed a Form 12b-25 – Notification of Late Filing – with the US Securities and Exchange Commission.
The delay comes in the wake of a broad review of accounting policies, with this taking place during Q4. Inspired said it had devoted “considerable” resources to this review and, as such, this led to the results being delayed.
This review is connected with restatements of previously issued financial statements, with this also delaying its Q3 results. Errors flagged include compliance with US GAAP, linked to accounting policies for capitalising software development costs.
Incidentally, Nasdaq contacted Inspired in mid-Q4, warning that the late filing placed it in breach of its rules. The stock exchange gave Inspired until 22 January to submit a plan to regain compliance, or risk having its shares de-listed.
Inspired submitted its plan in January, with this being accepted by Nasdaq last month. As such, Inspired avoided any further action over the matter.
What did Inspired cover in the review?
Upon announcing the initial delay back in November, Inspired revealed several errors. These related to the application of relevant accounting standards to projects.
Inspired said errors were flagged in financial statements for financial periods commencing 1 January 2021. As such, it said these statements can no longer be relied upon and should be restated.
Based on these findings, Inspired said one or more additional “material weaknesses” existed in internal control over financial reporting. This led to it committing to implement changes to remediate such weaknesses including restating financial statements for the periods of concern.
Inspired sought to allay investor fears, saying the planned changes will not impact its cash position or overall business plan.
Mixed Q3 at Inspired
As for the delayed Q3 results, these made for somewhat mixed reading. Revenue for the three months to 30 September 2023 climbed 30.9% to $97.5m (£76.8m/€89.9m).
However, higher spending across several areas meant Inspired ended Q3 with a lower net profit of $7.2m, down 58.6%. In addition, adjusted EBITDA slipped 2.2% to $26.7m.
As to how Q3 impacted Inspired in the year to date, revenue during the nine months to 30 September grew 18.0% to $241.8m.
However, spending was higher in almost all areas in the nine-month period. This meant net loss for the period reached $1.0m, compared to a $20.4m profit in the previous year.
There was some good news for Inspired with adjusted EBITDA creeping up 1.1% to $74.0m.