Q4 2023 Inspired Entertainment Inc Earnings Call Transcript
Key Points
- Fourth quarter EBITDA of $26.5 million was in line with previous consensus and modestly ahead of 2022, with full year EBITDA of $100.5 million.
- Full year EBITDA from the overall digital business grew by 12% from $56.2 million in 2022 to $63.1 million in 2023, maintaining EBITDA margins of 75%.
- The Interactive business saw revenue growth of close to 50% in the fourth quarter, driven by new content and worldwide account management.
- Retail businesses continued to perform well, benefiting from new Vantage cabinet and new market opportunities in North America.
- The company has a robust pipeline of new products and is expanding into new geographies, such as Brazil, which is expected to be a key market.
- Growth in Virtual Sports moderated over the year, with peak EBITDA in the first quarter of 2023.
- The market share in the Virtual Sports business is high, which constrains volume growth through market share gains without new markets opening.
- The Holiday Parks business has been operating at margins below the company average, affecting overall profitability.
- The first quarter of 2024 is still significantly below the first quarter of 2023 for Virtual Sports EBITDA, indicating a slower recovery.
- The company's focus on maximizing revenue and earnings means M&A is not a top priority, potentially missing out on consolidation opportunities in the market.
Good morning, everyone, and welcome to be Inspired Entertainment fourth quarter 2023 conference call. (Operator Instructions) Please note that today's event is being recorded.
Please refer to the company's Safe Harbor statement that appears in the fourth quarter 2023 earnings press release, which is also available in the Investors section on the company's website at www.inseinc.com. This Safe Harbor statement also applies to today's conference call as the company's management will be making certain statements that will be considered forward-looking under securities laws and rules of the SEC.
These statements are based on management's current expectations or beliefs and are subject to risks, uncertainties and changes in circumstances. In addition, please note that the company will discuss both GAAP and non-GAAP financial measures. A reconciliation is included in the earnings press release.
With that completed, I would now like to turn the conference call over to Lorne Weil, the company's Executive Chairman. Mr. Weil
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