Inspired Entertainment's Adjusted EBITDA Margin Reaches 45%

The Tip Desk · August 5, 2026 · 3 min read

Adjusted EBITDA reached $27.1 million in the second quarter, up 14% from the prior quarter, as the company reaffirmed a 2026 target of $112 million to $118 million.

Inspired Entertainment, Inc. (INSE), a B2B provider of gaming content, technology, hardware and services, reported second-quarter revenue of $60.8 million, up 6% sequentially despite a higher UK remote gaming duty that took effect April 1.

Adjusted EBITDA rose to $27.1 million from $23.7 million in the first quarter, a 14% sequential increase that produced a 45% Adjusted EBITDA margin, a company record excluding periods with a UK VAT rebate. A year earlier, company Adjusted EBITDA was $28.4 million and the margin was 35%. Net operating income was $9.9 million. Net income was $0.2 million, or $0.01 a share, versus a year-earlier net loss of $7.8 million, or $0.27 a share. Adjusted net income was $1.5 million, or $0.05 a share.

Reported revenue declined 24% from $80.3 million a year earlier. The company said portfolio optimization, including the November 2025 divestiture of its UK holiday parks business and a restructuring of its pubs business, reduced revenue by approximately 30% year over year. Excluding those initiatives, it said it delivered like-for-like year-over-year revenue growth.

Interactive was the growth engine. Interactive revenue was $15.7 million, up 15% year over year, and Interactive Adjusted EBITDA was $10.3 million, up 13%. The company attributed the results to continued market share gains despite the higher UK duty. That year-over-year pace slowed from 38% revenue growth and 53% Adjusted EBITDA growth in the first quarter. Interactive accounted for 25.8% of second-quarter revenue.

Retail Solutions remained the largest segment at $36.2 million, or 59.5% of revenue, down 37% from $57.5 million a year earlier. Retail Solutions Adjusted EBITDA was $18.4 million. The company said the segment delivered another strong quarter on North American retail sales and continued strength in the UK.

Virtual Sports revenue was $8.9 million and Virtual Sports Adjusted EBITDA was $6.7 million. The company said Virtual Sports had stabilized and that it launched the first of many customers from a SaaS agreement with Playtech, enabling Inspired’s Virtuals to be delivered across Playtech’s global operator network.

President and CEO Brooks Pierce said the quarter showed the transformation translating into expanding margins and continued earnings growth, with resilience against the UK duty increase and continued market share gains. Executive Chairman Lorne Weil said the company is gaining share, expanding profitability and reducing leverage.

Inspired repaid $10.0 million of senior secured notes principal in the second quarter and repurchased 319,995 shares for $2.6 million. Year to date it had repaid $23.3 million of debt and repurchased 707,225 shares for $5.2 million. Cash was $22.0 million at June 30. Long-term debt was $319.4 million.

The company said it was live on day one with Interactive and Virtual Sports in the newly regulated Alberta gaming market, extended a four-year exclusive gaming-terminal and content contract with Paddy Power, and launched Malta Lottery Virtual Sports channels via the Playtech SaaS agreement.

Inspired reaffirmed its full-year 2026 Adjusted EBITDA target of $112 million to $118 million, incorporating the expected impact of the UK duty change. It updated its 2026 free-cash-flow conversion outlook to 20% or above, from a prior expectation of 20% to 25%. Post-divestiture, it said earnings are expected to be less seasonal on a comparable basis, with Adjusted EBITDA expected to grow sequentially throughout the year.