Inspired Entertainment (NASDAQ:INSE) Issues Quarterly Earnings Results

Key Points

• Inspired Entertainment beat earnings expectations, reporting adjusted EPS of -$0.02 versus the consensus estimate of -$0.15. Revenue came in at $57.2 million, slightly below analyst expectations of $58.89 million.
• Operational performance improved in the quarter, with continuing revenue up about 15% year over year and Interactive revenue rising 38%. The company also posted stronger EBITDA, expanded margins, repaid debt, and repurchased shares.
• Management flagged both growth drivers and risks: Interactive momentum remains strong, but a major UK iGaming tax increase is a headwind to future profitability. Virtual sports growth has been slower than expected, though catalysts like the World Cup and a Playtech partnership could help.

Inspired Entertainment (NASDAQ:INSE - Get Free Report) announced its quarterly earnings results on Thursday. The company reported ($0.02) EPS for the quarter, beating the consensus estimate of ($0.15) by $0.13, Zacks reports. The company had revenue of $57.20 million for the quarter, compared to analyst estimates of $58.89 million. Inspired Entertainment had a negative net margin of 5.78% and a negative return on equity of 1,176.67%.

Here are the key takeaways from Inspired Entertainment's conference call:

• Adjusted for disposals, continuing revenue rose ~15% YoY with Interactive up 38%, reported EBITDA +29% and margin expansion of ~1,100 bps; the company also repaid $13M of debt, repurchased ~400k shares and generated strong free cash flow.
• Portfolio actions (sale of holiday parks and pub restructuring) cut headcount ~33% and reduced annualized capex to the low $30M, shifting the mix to higher‑margin digital businesses and improving cash flow conversion and leverage.
• Interactive momentum continues — North America now >30% of Interactive GGR, the company moved to #4 in the Eilers U.S. report, plans a new studio online in H2 and will use AI to accelerate game releases and secure prime placements.
• A UK iGaming tax increase (21%→40% effective Apr 1) is a material headwind; management says April revenue grew >10% after offsetting share gains, but the higher tax rate remains a risk to future UK profitability.
• Virtual sports growth has been slower than hoped (Brazil weakness offsetting other regions); management now targets mid‑to‑high single‑digit long‑term penetration but cites catalysts — World Cup, Playtech partnership (H2 into 2027) and lottery opportunities — that could revive growth.

Inspired Entertainment Stock Performance

NASDAQ:INSE traded down $0.14 during mid-day trading on Friday, hitting $7.96. 150,156 shares of the company's stock traded hands, compared to its average volume of 100,352. The firm's 50 day simple moving average is $7.17 and its 200 day simple moving average is $8.09. Inspired Entertainment has a 1 year low of $6.10 and a 1 year high of $9.95. The company has a market cap of $212.29 million, a PE ratio of -13.05 and a beta of 1.19.

Analysts Set New Price Targets

A number of equities analysts have recently issued reports on the stock. Weiss Ratings lowered shares of Inspired Entertainment from a "hold (c-)" rating to a "sell (d)" rating in a research report on Wednesday, March 11th. BWS Financial restated a "buy" rating and set a $20.00 target price on shares of Inspired Entertainment in a research report on Wednesday, March 11th. Finally, Zacks Research upgraded shares of Inspired Entertainment from a "strong sell" rating to a "hold" rating in a research report on Thursday. One investment analyst has rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, Inspired Entertainment currently has a consensus rating of "Hold" and an average price target of $15.00.

Insider Buying and Selling at Inspired Entertainment

In other news, Director Michael R. Chambrello acquired 10,000 shares of Inspired Entertainment stock in a transaction that occurred on Thursday, March 26th. The shares were acquired at an average price of $6.92 per share, with a total value of $69,200.00. Following the completion of the purchase, the director owned 64,568 shares of the company's stock, valued at approximately $446,810.56. This represents a 18.33% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Brooks H. Pierce acquired 13,332 shares of Inspired Entertainment stock in a transaction that occurred on Thursday, March 26th. The shares were purchased at an average cost of $6.88 per share, for a total transaction of $91,724.16. Following the purchase, the chief executive officer directly owned 52,407 shares of the company's stock, valued at approximately $360,560.16. This trade represents a 34.12% increase in their position. The SEC filing for this purchase provides additional information. In the last three months, insiders acquired 80,000 shares of company stock worth $545,748. 13.10% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Inspired Entertainment

Several institutional investors and hedge funds have recently bought and sold shares of INSE. Kanen Wealth Management LLC raised its holdings in shares of Inspired Entertainment by 50.9% in the 1st quarter. Kanen Wealth Management LLC now owns 2,006,017 shares of the company's stock worth $18,929,000 after purchasing an additional 676,988 shares during the period. AQR Capital Management LLC raised its holdings in shares of Inspired Entertainment by 57.9% in the 4th quarter. AQR Capital Management LLC now owns 24,541 shares of the company's stock worth $230,000 after purchasing an additional 8,995 shares during the period. Wells Fargo & Company MN raised its holdings in shares of Inspired Entertainment by 78.1% in the 4th quarter. Wells Fargo & Company MN now owns 27,329 shares of the company's stock worth $256,000 after purchasing an additional 11,982 shares during the period. Fuller & Thaler Asset Management Inc. acquired a new stake in shares of Inspired Entertainment in the fourth quarter worth $309,000. Finally, Bank of America Corp DE increased its position in shares of Inspired Entertainment by 122.6% in the third quarter. Bank of America Corp DE now owns 30,121 shares of the company's stock worth $283,000 after acquiring an additional 16,591 shares in the last quarter. Institutional investors and hedge funds own 77.38% of the company's stock.

About Inspired Entertainment

Inspired Entertainment, Inc NASDAQ: INSE is a business-to-business provider of digital gaming content and technology solutions for the global gaming industry. The company's offerings include server-based gaming modules, virtual sports simulations, digital interactive content and mobile sports betting platforms. Inspired designs proprietary games and software that integrate with lotteries, casino operators, retail betting shops and online platforms, emphasizing reliable performance, rapid deployment and engaging player experiences.

At the core of Inspired's product suite is its Virtual Sports catalog, which simulates sporting events using advanced algorithms and randomized outcomes.

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