The following is a summary of the Inspired Entertainment, Inc. (INSE) Q2 2024 Earnings Call Transcript:
Financial Performance:
Q2 EBITDA increased by 56.5% from Q1.
Interactive segment revenue and EBITDA up 40% and 69% YoY respectively.
Business Progress:
Introduced 40% more games in Q2; launched in Connecticut.
Plans for expansion in West Virginia, Delaware, Brazil, and South Africa.
Opportunity:
Plans to expand into Brazil and South Africa; introducing new gaming products.
Integrating 5000 Vantage gaming terminals across U.K. betting shops in Q4.
Risk:
Virtual Sports revenue flat due to no recent product or geographic expansion.
Implementation risks for upcoming product launches and market expansions.
Financial Performance:
Second-quarter EBITDA grew by approximately 56.5% over the first quarter.
Interactive segment reported revenue growth of 40% year-over-year and EBITDA growth of 69% compared to Q2 2023.
Virtual Sports maintained high performance with EBITDA margins over 80% and high cash conversion, despite revenue being flat due to lack of recent product and geographic expansion.
Significant growth expected in the second half of the year due to recent expansions.
Q2 revenue from largest betting shop operators, Betfred and Patty Power, showed strong growth; new installations planned with William Hill could drive further growth in 2025.
Business Progress:
Introduction of 40% more games in Q2 compared to Q1, with many exclusive games launched.
Expanding geographical presence with new launches in Connecticut, and plans for West Virginia and Delaware.
Market share for slots in the UK reached 8%, and overall blended market share increased significantly.
Introduction of a progressive game in North America and plans for further rollout.
Expect significant contributions from the hybrid dealer and virtual sports segments in 2025, with expansions in product offerings and entering new geographies like Brazil and South Africa.
Opportunities:
Expansion into new geographic markets, including Brazil and South Africa, and potential market share increase with hybrid dealer technology.
Introduction of new gaming products and progressive games in key markets,
Growth potential from the integration and deployment of about 5000 Vantage gaming terminals starting Q4 across U.K. betting shops.
Potential increased adoption of hybrid dealer products by tier 2 and tier 3 operators due to lower production costs compared to traditional game offerings.
Risks:
Virtual Sports segment saw revenues treading water due to lack of recent product and geographic expansion.
Implementation risks related to upcoming product launches and market expansions, which are crucial for second-half performance improvement.
More details: Inspired Entertainment IR
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