Inspired reports strong first quarter
Revenue in the first quarter increased 16.1% compared to the same quarter last year on a reported basis, principally driven by growth in Server Based Gaming (“SBG”) service revenue and Virtual Sports recurring revenue; 14.3% after adjusting for foreign currency impact and the longer quarter in 2016 (98 days vs 92 days).
Net loss narrowed significantly, from over $22 million to $4.2 million; in addition, Adjusted EBITDA¹ increased 13.0% after adjusting for foreign currency impact and the length of the quarter, and increased 31.6% after also excluding incremental costs since the closing of our Business Combination. This follows a 19% CAGR in annual Adjusted EBITDA on a constant currency basis from FY2014 to FY2017.
International expansion strategy continued, including our rollout into Greece, with 3,500 SBG terminals deployed to date and an additional 2,860 contracted, our Virtual Sports going live in the State of New Jersey, USA, with five regulated online operators, Virtual Sports launches in various new EU markets and new contracts in Latin America and Scandinavia.
Long-term debt was reduced, with $7.7 million of long-term debt repaid during the quarter.
Luke Alvarez, President and CEO of Inspired said, “We are pleased with our first quarter results, which reflect strong growth in recurring revenues, expansion in non-UK European markets and achievement of a key market entry in North America. We also paid down long-term debt in the quarter as well as significantly reduced our net loss. Our Greek SBG business continues to strengthen, with two additional orders from OPAP since the original contract and a new partnership with Novomatic. Our UK SBG business is expanding, as we deploy our new contract for additional terminals with Betfred. Our Virtual Sports business has expanded with multiple new launches in Italy, the UK, Greece, Poland and Romania, and with new contracts in the UK, Finland and Latin America.”
Mr. Alvarez continued, “We are now live with Virtual Sports in New Jersey, with five online casinos including Caesars and Golden Nugget. Our European mobile games have launched with five new operators. We expect to see our recently announced Virtual Sports American Football game, 1st Down, go live with U.S. gaming and lottery customers during 2018. Our business is progressing on all fronts – UK, rest of world and U.S. – land based and mobile – SBG and Virtual Sports. We are optimistic about our prospects for FY18 and beyond.”