Inspired Entertainment Q3 2026 revenue falls 29%
Brazil's measure prohibits regulated online betting and gaming, but must be considered by Congress within 120 days to remain in effect.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Inspired Entertainment, Inc. (INSE) reported third-quarter 2026 revenue of $61.4 million, versus $86.2 million a year earlier, and nine-month revenue of $179.4 million versus $226.9 million. Lower service revenue mainly reflected the sale of its UK holiday parks business and associated leisure assets and a pub-operator model change; product sales rose in both periods. Net operating income was $10.3 million for the quarter versus $9.7 million and $29.4 million for nine months versus $19.2 million. Net losses were $0.1 million and $0.4 million, compared with $1.9 million and $9.8 million, respectively.
Nine-month operating cash flow was $45.7 million, compared with $50.8 million; cash excluding restricted cash was $35.3 million at September 30, 2026. Brazil's government issued a provisional measure prohibiting regulated online betting and gaming, effective upon publication and subject to congressional consideration within 120 days. Inspired expects Brazil results to be adversely affected while the prohibition remains in effect, primarily in Virtual Sports. During the nine months, it repurchased 707,225 shares for approximately $5.2 million; approximately $19.4 million remained available under the program at September 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month operating income increased to $29.4 million from $19.2 million.
- Moderate pointNine-month net loss narrowed to $0.4 million from $9.8 million.
Negative
- Moderate pointThird-quarter revenue fell 29% to $61.4 million.
- Moderate pointNine-month operating cash flow declined to $45.7 million from $50.8 million.
- Moderate pointBrazil's September 25, 2026 measure prohibits regulated online betting and gaming.
- Minor pointNine-month revenue fell 21% to $179.4 million.
Filing Explained
The Senior Notes mature in 2030, later than management’s stated funding horizon through November 2027.
This unaudited quarterly report records Inspired Entertainment’s September 30 position:
The company received a
The Senior Notes have stated principal of
Management currently believes cash, expected operating cash flow, control or deferral of capital projects, and available external borrowing will be sufficient to fund net cash requirements through
Key Figures
Key Terms
functional currency (at constant rate) financial
Notes Financial Covenant financial
SONIA financial
cash flow hedges technical
Transaction Price Allocated to Remaining Performance Obligations financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did INSE report in the third quarter of 2026?
Did INSE make a profit in the third quarter of 2026?
What is happening to INSE's Brazil operations?
How much revenue does INSE expect from remaining performance obligations?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period _______________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | ||
| Non-accelerated filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
As of November 2, 2026, there were shares of the Company’s common stock issued and outstanding.
TABLE OF CONTENTS
| PART I. | FINANCIAL INFORMATION | 1 |
| ITEM 1. | FINANCIAL STATEMENTS (Unaudited) | 1 |
| Condensed Consolidated Balance Sheets | 1 | |
| Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | 2 | |
| Condensed Consolidated Statement of Stockholders’ Deficit | 3 | |
| Condensed Consolidated Statements of Cash Flows | 5 | |
| Notes to Condensed Consolidated Financial Statements | 6 | |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 20 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 43 |
| ITEM 4. | CONTROLS AND PROCEDURES | 43 |
| PART II. | OTHER INFORMATION | 45 |
| ITEM 1. | LEGAL PROCEEDINGS | 45 |
| ITEM 1A. | RISK FACTORS | 45 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 45 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 45 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 45 |
| ITEM 5. | OTHER INFORMATION | 45 |
| ITEM 6. | EXHIBITS | 45 |
| SIGNATURES | 46 | |
| i |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
References in this report to “we,” “us,” “our,” the “Company” and “Inspired” refer to Inspired Entertainment, Inc. and its subsidiaries unless the context suggests otherwise.
Certain statements and other information set forth in this report, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein, may relate to future events and expectations, and as such constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Our forward-looking statements include, but are not limited to, statements regarding our business strategy, plans and objectives and our expected or contemplated future operations, results, financial condition, beliefs and intentions. In addition, any statements that refer to projections, forecasts or other characterizations or predictions of future events or circumstances, including any underlying assumptions on which such statements are expressly or implicitly based, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “scheduled,” “seek,” “should,” “would” and similar expressions, among others, and negatives expressions including such words, may identify forward-looking statements.
Our forward-looking statements reflect our current expectations about our future results, performance, liquidity, financial condition, prospects and opportunities, and are based upon information currently available to us, our interpretation of what we believe to be significant factors affecting our business and many assumptions regarding future events. Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, our forward-looking statements. This could occur as a result of various risks and uncertainties, including the following:
| ● | government regulation and taxation of our industries; | |
| ● | our ability and our customers’ ability to compete effectively in our industries; | |
| ● | the impact of evolving and disruptive technologies, including artificial intelligence, on our business; | |
| ● | risks associated with the use, development and deployment of AI technologies | |
| ● | our ability to maintain relationships with suppliers; | |
| ● | our ability to protect and enforce our intellectual property rights, and to do so in all markets in which we operate; | |
| ● | our ability to protect our business against cybersecurity threats; | |
| ● | our ability to successfully grow by acquisition as well as organically; | |
| ● | fluctuations due to seasonality; | |
| ● | our ability to attract and retain key members of our management team; | |
| ● | our need for working capital; | |
| ● | our ability to secure capital for growth and expansion; | |
| ● | changing consumer, technology and other trends in our industries; | |
| ● | our ability to successfully operate across multiple jurisdictions and markets around the world; | |
| ● | changes in local, regional and global economic and political conditions; | |
| ● | risks associated with responsible gaming, and social impact expectations, including heightened regulatory scrutiny and reputational impacts; and | |
| ● | other factors described in the reports and documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”). |
In light of these risks and uncertainties, and others discussed in this report, there can be no assurance that any matters covered by our forward-looking statements will develop as predicted, expected or implied. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. We advise you to carefully review the reports and documents we file from time to time with the SEC.
| ii |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Corporate tax and other current taxes receivable | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Software development costs, net | ||||||||
| Other acquired intangible assets subject to amortization, net | ||||||||
| Goodwill | ||||||||
| Finance lease right of use asset | ||||||||
| Operating lease right of use asset | ||||||||
| Costs of obtaining and fulfilling customer contracts, net | ||||||||
| Deferred tax | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Corporate tax and other current taxes payable | ||||||||
| Deferred revenue, current | ||||||||
| Operating lease liabilities | ||||||||
| Current portion of long-term debt | ||||||||
| Current portion of finance lease liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term debt | ||||||||
| Finance lease liabilities, net of current portion | ||||||||
| Deferred revenue, net of current portion | ||||||||
| Operating lease liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock; $ par value; shares authorized, shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively. | ||||||||
| Common stock; $ par value; shares authorized; shares and shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in millions, except share and per share data)
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue: | ||||||||||||||||
| Service | $ | $ | $ | $ | ||||||||||||
| Product sales | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of sales: | ||||||||||||||||
| Cost of service (1) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cost of product sales (1) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment loss on property and equipment classified as held-for-sale | ( | ) | ( | ) | ||||||||||||
| Net operating income | ||||||||||||||||
| Other expense | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other finance income | ||||||||||||||||
| Total other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) before income taxes | ( | ) | ( | ) | ||||||||||||
| Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income/(loss): | ||||||||||||||||
| Foreign currency translation (loss) gain | ( | ) | ( | ) | ||||||||||||
| Change in fair value of hedging instrument | ||||||||||||||||
| Reclassification of gain on hedging instrument to comprehensive income | ( | ) | ( | ) | ||||||||||||
| Reclassification of loss on pension plan to comprehensive income | ||||||||||||||||
| Other comprehensive income (loss) | ( | ) | ||||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net loss per common share – basic and diluted | $ | $ | ) | $ | ) | $ | ) | |||||||||
| Weighted average number of shares outstanding during the period – basic and diluted | ||||||||||||||||
| Supplemental disclosure of stock-based compensation expense | ||||||||||||||||
| Stock-based compensation included in: | ||||||||||||||||
| Selling, general and administrative expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE PERIOD JANUARY 1, 2026 TO SEPTEMBER 30, 2026
(in millions, except share data)
(Unaudited)
| Common stock | Additional paid in | Accumulated other comprehensive | Accumulated | Total stockholders’ | ||||||||||||||||||||
| Shares | Amount | capital | income | deficit | deficit | |||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | — | |||||||||||||||||||||||
| Change in fair value of hedging instrument | — | |||||||||||||||||||||||
| Reclassification of gain on hedging instrument to comprehensive income | — | ( | ) | ( | ) | |||||||||||||||||||
| Reclassification of loss on pension plan to comprehensive income | — | |||||||||||||||||||||||
| Issuances under stock plans | ||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Stock-based compensation expense | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||
| Change in fair value of hedging instrument | — | ( | ) | ( | ) | |||||||||||||||||||
| Reclassification of gain on hedging instrument to comprehensive income | — | ( | ) | ( | ) | |||||||||||||||||||
| Reclassification of loss on pension plan to comprehensive income | — | |||||||||||||||||||||||
| Issuances under stock plans | ||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Stock-based compensation expense | — | |||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||
| Change in fair value of hedging instrument | — | |||||||||||||||||||||||
| Reclassification of gain on hedging instrument to comprehensive income | — | ( | ) | ( | ) | |||||||||||||||||||
| Reclassification of loss on pension plan to comprehensive income | — | |||||||||||||||||||||||
| Issuances under stock plans | ||||||||||||||||||||||||
| Stock-based compensation expense | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE PERIOD JANUARY 1, 2025 TO SEPTEMBER 30, 2025
(in millions, except share data)
(Unaudited)
| Common stock | Additional paid in | Accumulated other comprehensive | Accumulated | Total stockholders’ | ||||||||||||||||||||
| Shares | Amount | capital | income | deficit | deficit | |||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||
| Reclassification of loss on pension plan to comprehensive income | — | |||||||||||||||||||||||
| Issuances under stock plans | ||||||||||||||||||||||||
| Stock-based compensation expense | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||
| Reclassification of loss on pension plan to comprehensive income | — | |||||||||||||||||||||||
| Issuances under stock plans | ||||||||||||||||||||||||
| Stock-based compensation expense | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | — | |||||||||||||||||||||||
| Reclassification of loss on pension plan to comprehensive income | — | |||||||||||||||||||||||
| Issuances under stock plans | ||||||||||||||||||||||||
| Stock-based compensation expense | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of finance lease right of use asset | ||||||||
| Amortization of operating lease right of use asset | ||||||||
| Impairment loss on property and equipment classified as held-for-sale | ||||||||
| Stock-based compensation expense | ||||||||
| Amortization of deferred financing fees relating to senior debt | ||||||||
| Deferred tax | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Corporate tax and other current taxes payable | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ||||||||
| Deferred revenue and customer prepayment | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Pension contributions | ( | ) | ( | ) | ||||
| Other long-term liabilities | ( | ) | ||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Purchases of capital software and internally developed costs | ( | ) | ( | ) | ||||
| Contract cost expense | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from long-term debt | ||||||||
| Repayments of long-term and short-term debt | ( | ) | ( | ) | ||||
| Repurchase of common stock | ( | ) | ||||||
| Debt fees incurred | ( | ) | ||||||
| Repayments of finance leases | ( | ) | ( | ) | ||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net increase in cash classified within assets held-for-sale | ( | ) | ||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Components of cash and restricted cash | ||||||||
| Cash | ||||||||
| Restricted cash | ||||||||
| Total cash and restricted cash, end of period | $ | $ | ||||||
| Supplemental cash flow disclosures | ||||||||
| Cash paid during the period for interest | $ | $ | ||||||
| Cash paid during the period for income taxes | $ | $ | ||||||
| Cash paid during the period for operating leases | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Lease liabilities arising from obtaining finance lease right of use assets | $ | $ | ( | ) | ||||
| Lease liabilities arising from obtaining operating lease right of use assets | $ | ( | ) | $ | ( | ) | ||
| Right of use property and equipment acquired through finance lease | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. Nature of Operations, Management’s Plans and Summary of Significant Accounting Policies
Company Description and Nature of Operations
We are a global gaming technology company, supplying content, platform and other products and services to licensed online and land-based lottery, betting and gaming operators worldwide through a broad range of distribution channels, on a business-to-business basis. We provide end-to-end digital gaming solutions (i) on our own proprietary and secure network, which accommodates a wide range of devices, including land-based gaming machine terminals, mobile devices and online computer applications and (ii) through third party networks. Our content and other products can be found through the consumer-facing portals of our customers operating digital channels, on aggregator platforms, and in licensed betting offices, adult gaming centers, pubs, bingo halls and motorway service areas for our customers operating land-based venues.
Management Liquidity Plans
As
of September 30, 2026, the Company’s cash on hand, excluding restricted cash, was $
Historically,
the Company has generally had positive cash flows from operating activities and has relied on a combination of cash flows provided by
operations and the incurrence of debt and/or the refinancing of existing debt to fund its obligations. Cash flows provided by operations
amounted to $
Management currently believes that the Company’s cash balances on hand, cash flows expected to be generated from operations, ability to control and defer capital projects and amounts available from the Company’s external borrowings will be sufficient to fund the Company’s net cash requirements through November 2027.
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2025. The financial information as of December 31, 2025 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 10, 2026, as amended on May 22, 2026 (the “2025 Form 10-K”). The financial information for the three and nine months ended September 30, 2025 is derived from the unaudited consolidated financial statements presented in the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025 filed with the SEC on November 5, 2025. The interim results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future interim periods.
| 6 |
2. Allowance for Credit Losses
Changes in the allowance for credit losses are as follows:
September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Beginning balance | $ | ( | ) | $ | ( | ) | ||
| Additional allowance for credit losses on contracts with customers | ( | ) | ||||||
| Write offs | ||||||||
| Foreign currency translation adjustments | ||||||||
| Ending balance | $ | ( | ) | $ | ( | ) | ||
3. Inventory
Inventory consists of the following:
September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Component parts | $ | $ | ||||||
| Work in progress | ||||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
Component parts include parts for gaming terminals. Our finished goods inventory primarily consists of gaming terminals which are ready for sale.
4. Prepaid Expenses and Other Assets
Prepaid expenses and other assets consist of the following:
September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Prepaid expenses and other assets | $ | $ | ||||||
| Fair value of hedging instrument | ||||||||
| Unbilled accounts receivable | ||||||||
| Total prepaid expenses and other assets | $ | $ | ||||||
| 7 |
5. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Accounts payable | $ | $ | ||||||
| Intellectual property licenses | ||||||||
| Payroll and related costs | ||||||||
| Interest payable | ||||||||
| Other creditors | ||||||||
| $ | $ | |||||||
6. Contract Related Disclosures
The following table summarizes contract related balances:
Accounts Receivable | Unbilled Accounts Receivable | Right to recover asset | Deferred Income | Customer Prepayments and Deposits | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
| At September 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
| At December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
During
the nine months ended September 30, 2026 and 2025, the Company recognized $
No significant amounts of revenue were recognized during the periods presented as a result of changes in contract transaction prices related to performance obligations satisfied in prior periods.
Transaction Price Allocated to Remaining Performance Obligations
At
September 30, 2026, in respect of contracts exceeding one year duration, the aggregate amount of the transaction price allocated
to the performance obligations which are unsatisfied (or partially unsatisfied) at the end of the reporting period was approximately
$
| 8 |
7. Long Term and Other Debt
Senior Notes
Long-term
debt consists of £
The
Notes Purchase Agreement which governs the Senior Notes requires that the Company maintain a maximum consolidated senior secured net
leverage ratio of 5.0x on the test date for the relevant periods ended or ending September 30, 2025, December 31, 2025, March 31, 2026,
June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027, stepping down to 4.75x on June 30, 2027 and each relevant period
thereafter (the “Notes Financial Covenant”). The Notes Financial Covenant is calculated as the ratio of consolidated senior
secured net debt to consolidated pro forma EBITDA (defined as consolidated net income after adding back certain items including (without
limitation) interest expense, taxes, depreciation and amortization expenses and exceptional or non-recurring costs and losses and after
adjusting for certain projected savings and synergies) for the 12-month period preceding the relevant quarterly testing date and is tested
quarterly on a rolling basis. The Notes Purchase Agreement does not include a minimum interest coverage ratio or other financial covenants.
Covenant testing at September 30, 2026 showed covenant compliance with a net leverage of
On
March 6, 2026, as permitted by the Notes Purchase Agreement, the Company repaid £
Loan
On July 7, 2026 the Company
received a loan amounting to $
Amounts due at September 30, 2026, net of the Historical Balance, are as follows:
September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Current portion of long-term debt | $ | | $ | |||||
| Long-term debt | ||||||||
| Total | $ | $ | ||||||
Amounts due at September 30, 2026, net of the Historical Balance, mature as follows:
| September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Fiscal period: | ||||||||
| 2026 | $ | $ | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| Total | $ | $ | ||||||
8. Derivatives and Hedging Activities
On
November 12, 2025, subsidiaries of the Company entered into two interest rate swap agreements with Macquarie Bank Limited designed to
manage our exposure to interest rate volatility associated with our Senior Notes. The swaps are effective from December 9, 2025, until
maturity on
Risk Management Objective of Using Derivatives
The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the nine months ended September 30, 2026, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.
For
derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in
Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged
transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified
to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve-months, the Company
estimates that an additional $
| 9 |
As of September 30, 2026, and December 31, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
| Interest Rate Derivative | Number of Instruments |
Notional | ||
| Interest rate swaps | £ |
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheet as of September 30, 2026 and December 31, 2025.
| September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| Other short-term assets | $ | $ | ||||||
| Other long-term assets | ||||||||
| Other current liabilities | ( | ) | ||||||
| Other long-term liabilities | ( | ) | ||||||
| Total derivatives designated as hedging instruments | $ | $ | ( | ) | ||||
There was no effect of offsetting of the derivative financial instruments at September 30, 2026 or December 31, 2025.
The tables below present the effect of fair value and cash flow hedge accounting on accumulated other comprehensive income for the nine months ended September 30, 2026 and September 30, 2025.
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives
Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||
| (in millions) | ||||||||
| Interest rate products | $ | $ | ||||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||
| (in millions) | ||||||||
| Interest expense, net | $ | $ | ||||||
| 10 |
The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the nine months ended September 30, 2026 and September 30, 2025.
Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||
| (in millions) | ||||||||
| Total amounts of income and expense line items presented in the statement of operations and comprehensive loss in which the effects of fair value or cash flow hedges are recorded | ||||||||
| Interest expense, net | $ | ( | ) | $ | ( | ) | ||
Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||
| (in millions) | ||||||||
| Amount of gain (loss) reclassified from accumulated other comprehensive income into income | ||||||||
| Interest expense, net | $ | $ | ||||||
Credit-risk-related Contingent Features
In November 2025, each of Inspired Gaming (UK) Limited and Gaming Acquisitions Limited, wholly owned (indirect) subsidiaries of the Company (each, a “Hedging Subsidiary”), entered into an industry standard ISDA Master Agreement, with a negotiated Schedule thereto (each, an “ISDA Agreement”), with Macquarie Bank Limited, the counterparty to the derivative transactions, and which ISDA Agreements set forth various provisions which govern the relationship between each such Hedging Subsidiary and the counterparty with respect to such derivative instruments. Such provisions include certain events which, if triggered by either party, may give rise to a termination of the relevant derivative instruments, which may trigger a requirement for the exchange of a breakage payment between the parties.
Each ISDA Agreement contains a provision whereby if any of the Company’s subsidiaries that has granted credit support in respect of such derivative transactions defaults on any of its indebtedness above a threshold amount, including default where repayment of such indebtedness has not been accelerated by the relevant creditor, then the relevant Hedging Subsidiary could also be declared in default on its derivative obligations. Each ISDA Agreement also contains a provision where the relevant Hedging Subsidiary could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the relevant Hedging Subsidiary’s default on its indebtedness.
As of September 30, 2026, no derivatives were in a net liability position. As of September 30, 2026, no Hedging Subsidiary has posted any collateral related to the ISDA Agreement, as no collateral is required under the terms thereof. If the Hedging Subsidiaries had breached any of the provisions under the terms which resulted in an acceleration of the ISDA Agreements, as at September 30, 2026, no assets would have been required for the Company to settle its obligations under the respective ISDA Agreements.
9. Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset and liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of our assets and liabilities utilizing an established three-level hierarchy. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. | |
| Level 2: | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions. | |
| Level 3: | Unobservable inputs that are supported by little or no market activity that are significant to the fair value of the asset or liability. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that are unable to be corroborated with observable market data. |
| 11 |
The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments approximates their recorded values.
For each period, derivative financial instrument assets and liabilities measured at fair value on a recurring basis are included in the financial statements as per the table below.
| September 30, | December 31, | |||||||||||
| Level | 2026 | 2025 | ||||||||||
| (in millions) | ||||||||||||
| Derivative asset (see note 8) | 2 | $ | $ | |||||||||
| Derivative liability (see note 8) | 2 | $ | $ | ( | ) | |||||||
Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the derivative liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Principal Financial and Accounting Officer determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Principal Financial and Accounting Officer.
At September 30, 2026 and December 31, 2025, there were no Level 3 inputs, and no transfers in or out of Level 3 from other levels in the fair value hierarchy.
Number of Shares | ||||
| Unvested Outstanding at January 1, 2026 | ||||
| Granted (1) | ||||
| Forfeited | ( | ) | ||
| Vested | ( | ) | ||
| Unvested Outstanding at September 30, 2026 | ||||
| (1) |
The Company issued a total of shares during the nine months ended September 30, 2026, in connection with the Company’s equity-based plans, which primarily reflected the net settlement of RSUs that vested on December 31, 2025.
11. Accumulated Other Comprehensive Loss (Income)
The accumulated balances for each classification of comprehensive loss (income) are presented below:
Foreign Currency Translation Adjustments | Fair Value of Hedging Instrument | Unrecognized Pension Benefit Costs | Accumulated Other Comprehensive (Income) | |||||||||||||
| (in millions) | ||||||||||||||||
| Balance at January 1, 2026 | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Change during the period | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||
| Change during the period | ( | ) | ||||||||||||||
| Balance at June 30, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||
| Change during the period | ( | ) | ( | ) | ( | ) | ||||||||||
| Balance at September 30, 2026 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
Foreign Currency Translation Adjustments | Fair Value of Hedging Instrument | Unrecognized Pension Benefit Costs | Accumulated Other Comprehensive (Income) | |||||||||||||
| (in millions) | ||||||||||||||||
| Balance at January 1, 2025 | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Change during the period | ( | ) | ||||||||||||||
| Balance at March 31, 2025 | ( | ) | ( | ) | ||||||||||||
| Change during the period | ( | ) | ||||||||||||||
| Balance at June 30, 2025 | ( | ) | ( | ) | ||||||||||||
| Change during the period | ( | ) | ( | ) | ( | ) | ||||||||||
| Balance at September 30, 2025 | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| 12 |
Basic income/loss per share (“EPS”) is computed by dividing net income/loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period, including stock options and RSUs, unless the inclusion would be anti-dilutive.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| RSUs | ||||||||||||||||
There were no reconciling items for the three and nine months ended September 30, 2026 or September 30, 2025.
| 13 |
The calculation of Basic EPS includes the effects of and shares for the three and nine months ended September 30, 2026 and 2025, respectively, with respect to RSU awards that have vested but have not yet been issued.
13. Repurchase of Common Stock
In
November 2025, the Board of Directors authorized the Company to use up to $
During
the nine months ended September 30, 2026, the Company repurchased shares under the Share Repurchase Program for gross payments
of approximately $
14. Other Finance Income
Other finance income consisted of the following:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (in millions) | (in millions) | |||||||||||||||
| Pension interest cost | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Expected return on pension plan assets | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
15. Income Taxes
The
effective income tax rate for the three months ended September 30, 2026 and 2025 was
The effective tax rate reported in any given year will continue to be influenced by a variety of factors including the level of pre-tax income or loss, the income mix between jurisdictions, and any discrete items that may occur.
| 14 |
16. Related Parties
Macquarie
Bank Limited (“Macquarie Bank”) (a party to our interest rate swap agreements, as described in Note 8) and Macquarie Corporate
Holdings Pty Limited (UK Branch) (“Macquarie UK”) (an arranger and lending party under our previous revolving credit facility
(“RCF”) which was repaid on June 9, 2025) are affiliates of MIHI LLC, which beneficially owned approximately
Richard
Weil, the brother of A. Lorne Weil, our Executive Chairman, provides consulting services to the Company relating to our lottery operations
under a consultancy agreement dated December 31, 2021, as amended and extended. The aggregate amount incurred by the Company in consulting
fees was $
17. Leases
Certain of our arrangements include leases for equipment installed at customer locations. As the lessor, we combine lease and non-lease components for all classes of underlying assets in arrangements that involve operating leases. The single combined component is accounted for under ASC 606, Revenue from Contracts with Customers based on the consideration that the non-lease components are the predominant items in the arrangements. If a component cannot be combined, the consideration is allocated between the lease component and the non-lease component based on relative standalone selling price. The lease component is accounted for under ASC 842, Leases and the non-lease component is accounted for under ASC 606.
Lease income from operating leases is not material for any of the periods presented. Lease income from sales type leases is as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (in millions) | (in millions) | |||||||||||||||
| Interest receivable | $ | $ | ||||||||||||||
| Profit recognized at commencement date of sales type leases | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
18. Commitments and Contingencies
Employment Agreements
We are party to employment agreements with our executive officers and other employees of the Company and our subsidiaries which contain, among other terms, provisions relating to severance and notice requirements.
Legal Matters
From time to time, the Company may become involved in lawsuits and legal matters arising in the ordinary course of business. While the Company believes that, currently, it has no such matters that are material, there can be no assurance that existing or new matters arising in the ordinary course of business will not have a material adverse effect on the Company’s business, financial condition or results of operations.
Purchase commitments
At
September 30, 2026 the Company had commitments to purchase property and equipment amounting to $
| 15 |
19. Pension Plan
We operate a defined contribution plan in the US, and both defined benefit and defined contribution pension plans in the UK. The defined contribution plan assets are held separately from those of the Company in independently administered funds.
Defined Benefit Pension Plan
The defined benefit plan has been closed to new entrants since April 1, 1999 and closed to future accruals for services rendered to the Company for the entire financial statement periods presented. The Actuarial Valuation of the plan as at March 31, 2024, which was finalized in March 2025, determined that the statutory funding objective was not met, i.e., there were insufficient assets to cover the plan’s technical provisions and there was a funding shortfall.
In
March 2025, a recovery plan was put in place to eliminate the funding shortfall. The recovery plan included a requirement for the plan
actuary to assess the funding position of the plan at March 31, 2026 and if the funding level at that point was less than 100% the Company
would pay a single lump sum contingent contribution calculated as the lower of the deficit calculated by the plan actuary at March 31,
2026 and £
The following table presents the components of our net periodic pension cost:
Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| (in millions) | ||||||||
| Components of net periodic pension cost: | ||||||||
| Interest cost | $ | $ | ||||||
| Expected return on plan assets | ( | ) | ( | ) | ||||
| Amortization of net loss | ||||||||
| Net periodic cost | $ | $ | ||||||
20. Segment Reporting and Geographic Information
Operating segments are identified as components of an enterprise for which separate and discrete financial information is available and is used by the chief operating decision maker, or decision-making group, (the “CODM”), in making decisions on how to allocate resources and assess performance. The Company’s CODM consists of our Executive Chairman and our President and Chief Executive Officer.
The Company’s CODM uses measures of segment profit and loss to evaluate the performance areas of 1) revenue and gross margin; 2) staff and non-staff expenses against budget; 3) investment in capitalized software development; and 4) additional cash expenditures impacting working capital. The CODM uses the information to allocate financial resources and drive operation decisions such as investing in new customers, products, geographies and refocusing commercial teams to drive new sales, accelerating or delaying staffing or other selling, general and administrative expenditures and ensuring technology staff utilization on new product development.
During the first quarter of 2026, we changed our reportable segments to align with changes in our internal management reporting structure and the manner in which the CODM assesses performance and allocates resources.
As
a result of these changes, the Company now reports the following reportable segments: Retail Solutions, Virtual Sports, and Interactive.
Previously, the Company reported the following reportable segments: Gaming, Virtual Sports, Interactive, and Leisure. The change in reportable
segments reflects organizational realignment and did not affect the Company’s consolidated financial position, results of operations,
or cash flows. We believe this method of
Prior-period segment information has been recast to conform to the current period presentation. The recast had no impact on previously reported consolidated totals.
The references below to “Other segment items” consist of costs incurred in restructuring activities.
The following tables present revenue, cost of sales, excluding depreciation and amortization, staff-related selling, general and administrative expenses, non-staff related selling, general and administrative expenses, labor costs capitalized, depreciation and amortization, stock-based compensation expense, other segment items, operating profit/(loss) and total capital and other long-lived asset expenditures for the periods ended September 30, 2026 and September 30, 2025, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization and capital expenditures relating to corporate/shared functions. Asset information by reportable segment is not given as this information is not provided to the Company’s CODM due to it not being considered necessary in order for the CODM to assess the reportable segments’ performance or to make decisions concerning the allocation of resources.
Segment Information
Three Months Ended September 30, 2026
| Retail Solutions | Virtual Sports | Interactive | Corporate Functions | Total | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Service | $ | $ | $ | $ | $ | |||||||||||||||
| Product sales | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization: | ||||||||||||||||||||
| Cost of service | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Cost of product sales | ( | ) | ( | ) | ||||||||||||||||
| Staff-related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-staff related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Labor costs capitalized | ||||||||||||||||||||
| Stock-based compensation expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other segment items | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Segment operating income (loss) | ( | ) | ||||||||||||||||||
| Net operating income | $ | |||||||||||||||||||
| Total capital and other long-lived asset expenditures for the three months ended September 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
| 16 |
Three Months Ended September 30, 2025
| Retail Solutions | Virtual Sports | Interactive | Corporate Functions | Total | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Service | $ | $ | $ | $ | $ | |||||||||||||||
| Product sales | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization: | ||||||||||||||||||||
| Cost of service | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Cost of product sales | ( | ) | ( | ) | ||||||||||||||||
| Staff-related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-staff related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Labor costs capitalized | ||||||||||||||||||||
| Stock-based compensation expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Impairment loss on classification as held-for-sale | ( | ) | ( | ) | ||||||||||||||||
| Other segment items | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Segment operating income (loss) | ( | ) | ||||||||||||||||||
| Net operating income | $ | |||||||||||||||||||
| Total capital and other long-lived asset expenditures for the three months ended September 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||
Nine Months Ended September 30, 2026
| Retail Solutions | Virtual Sports | Interactive | Corporate Functions | Total | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Service | $ | $ | $ | $ | $ | |||||||||||||||
| Product sales | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization: | ||||||||||||||||||||
| Cost of service | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Cost of product sales | ( | ) | ( | ) | ||||||||||||||||
| Staff-related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-staff related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Labor costs capitalized | ||||||||||||||||||||
| Stock-based compensation expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other segment items | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Segment operating income (loss) | ( | ) | ||||||||||||||||||
| Net operating income | $ | |||||||||||||||||||
| Total capital and other long-lived asset expenditures for the nine months ended September 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
| 17 |
Nine Months Ended September 30, 2025
| Retail Solutions | Virtual Sports | Interactive | Corporate Functions | Total | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Service | $ | $ | $ | $ | $ | |||||||||||||||
| Product sales | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization: | ||||||||||||||||||||
| Cost of service | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Cost of product sales | ( | ) | ( | ) | ||||||||||||||||
| Staff-related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-staff related selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Labor costs capitalized | ||||||||||||||||||||
| Stock-based compensation expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Impairment loss on classification as held-for-sale | ( | ) | ( | ) | ||||||||||||||||
| Other segment items | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Segment operating income (loss) | ( | ) | ||||||||||||||||||
| Net operating income | $ | |||||||||||||||||||
| Total capital and other long-lived asset expenditures for the nine months ended September 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||
Geographic Information
Geographic information for revenue is set forth below:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (in millions) | (in millions) | |||||||||||||||
| Total revenue | ||||||||||||||||
| UK | $ | $ | $ | $ | ||||||||||||
| USA | ||||||||||||||||
| Greece | ||||||||||||||||
| Rest of world | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
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UK revenue includes revenue from customers headquartered in the UK, but whose revenue is generated globally.
Geographic information of our non-current assets excluding goodwill and deferred tax is set forth below:
September 30, 2026 | December 31, 2025 | |||||||
| (in millions) | ||||||||
| UK | $ | $ | ||||||
| Greece | ||||||||
| Rest of world | ||||||||
| Total | $ | $ | ||||||
Software development costs are included as attributable to the market in which they are utilized.
21. Customer Concentration
During
the three months ended September 30, 2026, two customers represented at least
During
the nine months ended September 30, 2026, two customers represented at least
At September 30, 2026 and December 31, 2025, there were no customers that represented at least 10% of the Company’s accounts receivable.
22. Subsequent Events
The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued. The Company did not identify subsequent events that would have required adjustment or disclosure in the consolidated financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes thereto included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual future results could differ materially from the historical results discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this report.
Forward-Looking Statements
We make forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. For definitions of the term Forward-Looking Statements, see the definitions provided in the Cautionary Note Regarding Forward-Looking Statements at the forepart of this report
Revenue
We generate revenue in four principal ways: i) on a participation basis, ii) on a fixed rental fee basis, iii) through product sales and iv) through software license fees. Participation revenue generally includes a right to receive a share of our customers’ gaming revenue, typically as a share of net win but sometimes as a share of the handle or “coin in” which represents the total amount wagered.
Geographic Range
Geographically, the majority of our revenue is derived from, and the majority of our non-current assets are attributable to, our UK operations. The remainder of our revenue is derived from, and non-current assets attributable to, Greece and the rest of the world (including North America).
For the three and nine-months ended September 30, 2026, we derived approximately 61% and 59% of our revenue from the UK (including customers headquartered in the UK but whose revenue is generated globally), respectively, 8% and 9% respectively from USA, 11% (in both periods) from Greece, and the remaining 20% and 21% respectively across the rest of the world. During the three and nine months ended September 30, 2025, we derived approximately 73% and 71% of our revenue from the UK respectively, 6% (in both periods) from USA, 7% and 8% from Greece respectively and 14% and 15% respectively for the rest of world.
As of September 30, 2026, our non-current assets (excluding goodwill) were attributable as follows: 70% to the UK, 15% to Greece and 15% across the rest of the world. As of September 30, 2025, our non-current assets (excluding goodwill) were attributable as follows: 70% to the UK, 15% to Greece and 15% across the rest of the world.
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Foreign Exchange
Our results are affected by changes in foreign currency exchange rates as a result of the translation of foreign functional currencies into our reporting currency and the re-measurement of foreign currency transactions and balances. The impact of foreign currency exchange rate fluctuations represents the difference between current rates and prior-period rates applied to current activity. The geographic region in which the largest portion of our business is operated is the UK and the British pound (“GBP”) is our functional currency. Our reporting currency is the U.S. dollar (“USD”). Our results are translated from our functional currency of GBP into the reporting currency of USD using average rates for profit and loss transactions and applicable spot rates for period-end balances. The effect of translating our functional currency into our reporting currency, as well as translating the results of foreign subsidiaries that have a different functional currency into our functional currency, is reported separately in Accumulated Other Comprehensive Income.
During the three and nine-months ended September 30, 2026, we derived approximately 39% and 41% respectively of our revenue from sales to customers outside the UK (see discussion above), compared to 27% and 29% during the three and nine months ended September 30, 2025, respectively.
In the section “Results of Operations” below, currency impacts shown have been calculated as the current-period average GBP:USD rate less the equivalent average rate in the prior year period, multiplied by the current period amount in our functional currency (GBP). The remaining difference, referred to as functional currency at constant rate, is calculated as the difference in our functional currency, multiplied by the prior-period average GBP:USD rate. This is not a U.S. GAAP measure, but one which management believes provides a useful indication of results. In the tables below, variances in particular line items from period to period exclude currency translation movements, and currency translation impacts are shown independently.
Non-GAAP Financial Measures
We use certain financial measures that are not compliant with U.S. GAAP (“Non-GAAP financial measures”), including EBITDA and Adjusted EBITDA, to analyze our operating performance. In this discussion and analysis, we present certain non-GAAP financial measures, define and explain these measures and provide reconciliations to the most comparable U.S. GAAP measures. See “Non-GAAP Financial Measures” below.
Seasonality
Our results of operations can fluctuate due to seasonal trends and other factors. Sales of our gaming terminals can vary quarter to quarter due to both supply and demand factors.
Results of Operations
Our results are affected by changes in foreign currency exchange rates, primarily between our functional currency (GBP) and our reporting currency (USD). During the three-month periods ended September 30, 2026 and September 30, 2025, the average GBP:USD rates were 1.34 and 1.35, respectively, and for the nine-month periods ended September 30, 2026 and September 30, 2025 were 1.34 and 1.32, respectively.
The following discussion and analysis of our results of operations has been organized in the following manner:
| ● | a discussion and analysis of the Company’s results of operations for the three and nine-month periods ended September 30, 2026, compared to the same period in 2025; and | |
| ● | a discussion and analysis of the results of operations for each of the Company’s segments (Retail Solutions, Virtual Sports, Interactive) for the three and nine-month periods ended September 30, 2026, compared to the same period in 2025, including key performance indicator (“KPI”) analysis. |
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In the discussion and analysis below, certain data may vary from the amounts presented in our consolidated financial statements due to rounding.
For all reported variances, refer to the overall company and segment tables shown below. All variances discussed in the overall company and segment results are on a functional currency (at constant rate) basis, which excludes the impact of any changes in foreign currency exchange rates.
Key Events during the three-month period ended September 30, 2026
On August 18, 2026, the Company announced that Simona Camilleri had stepped down from her role as General Counsel. The Company’s Board of Directors promoted Carys Damon, previously Inspired’s Corporate Secretary, to the role of Executive Vice President, General Counsel and Board Secretary, effective September 7, 2026. Carys previously served as Inspired’s Executive Vice President, General Counsel and Corporate Secretary prior to serving as Corporate Secretary from July 2024.
On September 25, 2026, the Brazilian government issued a provisional measure prohibiting, the operation of regulated online betting and gaming operations in Brazil. The provisional measure became effective upon publication and provides for the wind-down of regulated betting operations in Brazil. The provisional measure must be considered by the Brazilian Congress within 120 days to remain in effect, during which time it may convert the measure into law or reject the measure. If Congress fails to consider the measure within the applicable period, it will lapse. The Company continues to monitor legislative and legal developments related to the provisional measure and expects its results of operations from Brazil to be adversely affected for as long as the prohibition remains in effect. Virtual Sports is the primary reporting segment impacted by the provisional measure. As part of the ongoing monitoring of the developing situation, the Company remains aware that a permanent closure of the Brazil market could potentially result in an impairment of the segment’s goodwill balance.
During the period ended September 30, 2026, in the Retail Solutions segment, 213 Velos Electronic Table Games (“ETG”) terminals were delivered to Genting Casino as part of total order of 310 terminals, with the remaining terminals expected to be delivered in 2026. In the same period, 300 replacement Lottery terminals were installed in venues operated by Loteria Electrônica Internacional Dominicana S.A. (“LEIDSA”) in the Dominican Republic. These form part of an approximately 3,000 terminal refresh program, including approximately 500 terminals in new venues, which is expected to continue into the first half of 2027.
During the period ended September 30, 2026, the Interactive segment announced the launch of its portfolio of online slot games in the province of Alberta, Canada through a broad range of operators. This launch follows the approval of the Company by the Alberta Gaming, Liquor and Cannabis Commission (“AGLC”) in the second quarter of 2026 as an iGaming Goods or Services Supplier, enabling the Company to supply content to licensed operators participating in the province’s regulated market.
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Overall Company Results
Three and nine Months ended September 30, 2026, compared to Three and nine Months ended September 30, 2025
For the Three-Month | Variance | For the Nine-Month | Variance | |||||||||||||||||||||||||||||||||||||||||||||
| Period ended | 2026 vs 2025 | Period ended | 2026 vs 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | September 30, 2026 | September 30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | September 30, 2026 | September 30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | ||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Service | $ | 52.2 | $ | 79.4 | $ | (0.1 | ) | $ | (27.1 | ) | (34 | )% | (34 | )% | $ | 159.8 | $ | 210.2 | $ | 3.2 | $ | (53.6 | ) | (25 | )% | (24 | )% | |||||||||||||||||||||
| Product | 9.2 | 6.8 | 0.0 | 2.4 | 35 | % | 35 | % | 19.6 | 16.7 | 0.2 | 2.7 | 16 | % | 17 | % | ||||||||||||||||||||||||||||||||
| Total revenue | 61.4 | 86.2 | (0.1 | ) | (24.7 | ) | (29 | )% | (29 | )% | 179.4 | 226.9 | 3.4 | (50.9 | ) | (22 | )% | (21 | )% | |||||||||||||||||||||||||||||
| Cost of Sales, excluding depreciation and amortization: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of Service | (7.4 | ) | (22.0 | ) | 0.1 | 14.5 | (66 | )% | (66 | )% | (24.7 | ) | (58.2 | ) | - | 33.5 | (58 | )% | (58 | )% | ||||||||||||||||||||||||||||
| Cost of Product | (4.5 | ) | (3.7 | ) | (0.1 | ) | (0.7 | ) | 19 | % | 22 | % | (10.6 | ) | (10.6 | ) | (0.2 | ) | 0.2 | (2 | )% | 0 | % | |||||||||||||||||||||||||
| Staff-related selling general and administrative expenses | (15.7 | ) | (18.2 | ) | 0.1 | 2.4 | (13 | )% | (14 | )% | (43.4 | ) | (52.1 | ) | (1.3 | ) | 10.0 | (19 | )% | (17 | )% | |||||||||||||||||||||||||||
| Non-staff related selling, general and administrative expenses | (8.1 | ) | (13.2 | ) | 0.1 | 5.0 | (38 | )% | (39 | )% | (29.7 | ) | (37.4 | ) | (0.8 | ) | 8.5 | (23 | )% | (21 | )% | |||||||||||||||||||||||||||
| Labor costs capitalized | 2.5 | 3.2 | (0.1 | ) | (0.6 | ) | (19 | )% | (22 | )% | 7.9 | 10.5 | 0.2 | (2.8 | ) | (27 | )% | (25 | )% | |||||||||||||||||||||||||||||
| Other segment items: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | (1.3 | ) | (1.4 | ) | 0.1 | - | 0 | % | (7 | )% | (4.3 | ) | (4.6 | ) | (0.1 | ) | 0.4 | (9 | )% | (7 | )% | |||||||||||||||||||||||||||
| Depreciation and amortization | (14.5 | ) | (13.2 | ) | 1.2 | (2.5 | ) | 19 | % | 10 | % | (41.5 | ) | (39.1 | ) | 0.4 | (2.8 | ) | 7 | % | 6 | % | ||||||||||||||||||||||||||
| Held for sale adjustment - Impairment | - | (5.9 | ) | - | 5.9 | (100 | )% | (100 | )% | - | (5.9 | ) | 0.1 | 5.8 | (98 | )% | (100 | )% | ||||||||||||||||||||||||||||||
| Other selling, general and administrative expenses | (2.1 | ) | (2.1 | ) | 0.1 | (0.1 | ) | 5 | % | 0 | % | (3.7 | ) | (10.3 | ) | (0.2 | ) | 6.8 | (66 | )% | (64 | )% | ||||||||||||||||||||||||||
| Net operating Income (Loss) | 10.3 | 9.7 | 1.4 | (0.8 | ) | (8 | )% | 6 | % | 29.4 | 19.2 | 1.5 | 8.7 | 45 | % | 53 | % | |||||||||||||||||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (9.6 | ) | (12.5 | ) | 0.1 | 2.8 | (22 | )% | (23 | )% | (29.6 | ) | (26.6 | ) | (0.5 | ) | (2.5 | ) | 9 | % | 11 | % | ||||||||||||||||||||||||||
| Other finance income (expense) | 0.1 | 0.2 | - | (0.1 | ) | (50 | )% | (50 | )% | 0.4 | 0.6 | - | (0.2 | ) | (33 | )% | (33 | )% | ||||||||||||||||||||||||||||||
| Total other income (expense), net | (9.5 | ) | (12.3 | ) | 0.1 | 2.7 | (22 | )% | (23 | )% | (29.2 | ) | (26.0 | ) | (0.5 | ) | (2.7 | ) | 10 | )% | 12 | % | ||||||||||||||||||||||||||
| Net Income (loss) from continuing operations before income taxes | 0.8 | (2.6 | ) | 1.5 | 1.9 | (73 | )% | (131 | )% | 0.2 | (6.8 | ) | 1.0 | 6.0 | (88 | )% | (103 | )% | ||||||||||||||||||||||||||||||
| Income tax expense | (0.9 | ) | 0.7 | (0.0 | ) | (1.6 | ) | (229 | )% | (229 | )% | (0.6 | ) | (3.0 | ) | 0.3 | 2.1 | (70 | )% | (80 | )% | |||||||||||||||||||||||||||
| Net Income (Loss) | $ | (0.1 | ) | $ | (1.9 | ) | $ | 1.5 | $ | 0.3 | (16 | )% | (95 | )% | $ | (0.4 | ) | $ | (9.8 | ) | $ | 1.3 | $ | 8.1 | (83 | )% | (96 | )% | ||||||||||||||||||||
| Exchange Rate - $ to £ | 1.34 | 1.35 | 1.34 | 1.32 | ||||||||||||||||||||||||||||||||||||||||||||
See “Segments Results” below for a more detailed explanation of the significant changes in our components of revenue within the individual segment results of operations.
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Revenue (for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025)
Consolidated Reported Revenue by Segment
For the three-month period ended September 30, 2026, Total revenue on a functional currency (at constant rate) basis decreased by $24.7 million or 29% compared to the three-month period ended September 30, 2025, and for the nine-month period ended September 30, 2026, revenue on a functional currency basis decreased by $50.9 million or 22% compared to the nine-month period ended September 30, 2025.
For the three-month period ended September 30, 2026, compared to the three-month period ended September 30, 2025, Retail Solutions revenue declined by $24.3 million, due to a decrease in service revenue, primarily reflecting the sale of the UK holiday parks business and certain associated leisure assets in November 2025, and the pub operator model change. This was partially offset by an increase in product sales of $2.4 million (reflecting the variable nature of terminal sales). Virtual Sports revenue declined by $0.7 million due to a decrease in online revenue and the provisional measures prohibiting regulated online betting and gaming operations in Brazil, while Interactive revenue grew by $0.5 million, due to growth in North American markets.
For the nine-month period ended September 30, 2026, compared to the nine-month period ended September 30, 2025, Retail Solutions revenue declined by $55.3 million, predominantly due to a decrease in service revenue of $58.0 million, reflecting the sale of the UK holiday parks business and certain associated leisure assets, and the pub operator model change. This was partially offset by an increase in product sales of $2.7 million (reflecting the variable nature of terminal sales). Virtual Sports revenue declined by $1.7 million due to a decrease in online revenue and the provisional measures prohibiting regulated online betting and gaming operations in Brazil, while Interactive revenue increased by $6.1 million, driven by growth in the UK, mainland Europe and North America reflecting a higher number of games released and strong performance of new titles. UK growth was partially offset by higher UK remote gaming taxes, from April 2026.
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Cost of Sales, excluding depreciation and amortization
Cost of sales, excluding depreciation and amortization, for the three and nine-month period ended September 30, 2026, decreased by $13.8 million and $33.7 million, or 54% and 49%, respectively, compared to the three and nine-month period ended September 30, 2025. The decreases were predominantly driven by a reduction of $14.5 million and $33.5 million in cost of service, respectively, primarily due to the sale of the UK holiday parks business and certain leisure assets and the pub operator business model change, with the three-month period decrease partially offset by an increase in cost of product of $0.7 million driven by product sales increase.
Staff-related selling, general and administrative expenses
Staff-related selling, general and administrative expenses for the three and nine-month period ended September 30, 2026, decreased by $2.4 million and $10.0 million, or 13% and 19% respectively compared to the three and nine-month period ended September 30, 2025. This was predominantly related to the sale of the UK holiday parks business and certain associated leisure assets.
Non-staff related selling, general and administrative expenses
Non-staff related selling, general and administrative expenses for the three and nine-month ended September 30, 2026, decreased by $5.0 million and $8.5 million, or 38% and 23% respectively compared to the three and nine- month period ended September 30, 2025.
The decrease in the three-month period ended September 30, 2026, compared to the three-month period ended September 30, 2025, was mainly driven by lower professional fees of $4.0 million (ad-hoc in nature and timing does not correlate year-on-year), and lower facility costs of $1.1 million related to the sale of the UK holiday parks business and certain leisure assets and the pub operator business model restructuring activity.
The decrease in the nine-month period ended September 30, 2026, compared to the period ended September 30, 2025, was driven by reductions of $3.4 million in professional fees, $2.7 million in facility costs, $2.4 million in fleet costs and $1.1 million in storage costs, reflecting the sale of the UK holiday parks business and certain leisure assets and the pub operator business model restructuring activity. These reductions were partially offset by a realized loss on foreign currency movements of $1.3 million.
Stock-based compensation
During the three and nine-month period ended September 30, 2026, the Company recorded expenses of $1.3 million and $4.3 million, respectively, compared to the expenses of $1.4 million and $4.6 million for the three and nine-month period ended September 30, 2025. All expenses related to outstanding awards.
Depreciation and amortization
Depreciation and amortization for the three-month period ended September 30, 2026, increased by $2.5 million compared to the three-month period ended September 30, 2025, driven by an increase in Retail Solutions of $0.6 million due to an increase in contract cost amortization, an increase in Virtual Sports of $0.4 million and Interactive of $0.3 million for increased software development and intangible assets.
Depreciation and amortization for the nine-month period ended September 30, 2026, increased by $2.8 million compared to the nine-month period ended September 30, 2025. This increase was driven by increases in Virtual Sports of $1.8 million and Interactive of $0.9 million respectively, for increased software and intangible assets, partially offset by a reduction in Retail Solutions of $0.6 million mainly due to the sale of the UK holiday parks business and certain leisure assets and the pub operator business model restructuring activity.
Other selling, general and administrative expenses
Other selling, general and administrative expenses for the three-month period ended September 30, 2026, increased by $0.1 million or 5%, compared to the three-month period ended September 30, 2025.
Other selling, general and administrative expenses for the nine-month period ended September 30, 2026, decreased by $6.8 million or 66% compared with the nine-month period ended September 30, 2025. The decrease was primarily driven by costs relating to the absence of the restatement of previously issued financial statements not repeated, expenses relating to restructuring costs, and costs relating to refinancing during the nine-month period ended September 30, 2025.
Net operating income
During the three and nine-month period ended September 30, 2026, net operating income was $10.3 million and $29.4 million, respectively, representing a decrease of $0.8 million on a functional basis and increase of $8.7 million, respectively, compared to the three and nine-month period ended September 30, 2025.
The decrease in the three-month period ended September 30, 2026, on a functional basis, was predominantly due to lower revenues and increased depreciation and amortization expense, partially offset by the decrease in staff and non-staff related selling, general and administrative expenses (due to lower professional fees and the sale of the UK holiday parks business and certain associated leisure assets) and by the absence of the Held for Sale impairment recognized during the three-month period ended September 30, 2025.
The growth in the nine-month period ended September 30, 2026, compared to the nine-month period ended September 30, 2025, was mainly due to lower staff and non-staff related selling, general and administrative expenses (due to lower professional fees and the sale of the UK holiday parks business and certain associated leisure assets), and by the absence of costs relating to the restatement of previously issued financial statements not repeated, expenses relating to restructuring costs, and cost relating to refinancing during the nine-month period ended September 30, 2025.
Net Income (Loss)
For the three-month period ended September 30, 2026, net loss was $0.1 million compared to a net loss of $1.9 million for the three-month period ended September 30, 2025, primarily due to lower net interest expense of $2.7 million partially offset by lower net operating income of $0.8 million and an increase of income tax expense of $1.6 million.
For the nine-month period ended September 30, 2026, net loss was $0.4 million compared to a net loss of $9.8 million for the nine-month period ended September 30, 2025, mainly due to the increase of net operating income of $8.7 million and a favorable movement in income taxes of $2.1 million, partially offset by an adverse movement in net interest expense of $2.7 million.
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Deferred Tax
The Company maintains a valuation allowance related to capital loss carryovers in the United Kingdom, state net operating losses unable to be utilized in the United States, and United States interest expected to be limited under Section 163(j).
Segment Results (for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025)
Retail Solutions
We generate revenue from our Retail Solutions segment through delivery of our gaming terminals preloaded with proprietary gaming software, server-based content, as well as services such as terminal repairs, maintenance, software upgrades and upgrades on a when and if available basis and content development. We receive rental fees for machines, typically in conjunction with long-term contracts, on both a participation and fixed fee basis. Our participation contracts are typically structured to pay us a percentage of net win (defined as net revenue to our operator customers, after deducting player winnings, free bets or plays and any relevant regulatory levies) from gaming terminals placed in our customers’ facilities. Typically, we recognize revenue from these arrangements on a daily basis over the term of the contract.
Revenue growth for our Retail Solutions business is principally driven by changes in (i) the number of operator customers we have, (ii) the number of Retail Solutions machines in operation, (iii) the net win performance of the machines and (iv) the net win percentage that we receive pursuant to our contracts with our customers.
Retail Solutions, Key Performance Indicators
For the Three-Month Period ended | Variance | For the Nine-Month Period ended | Variance | |||||||||||||||||||||||||||||
| September 30, | September 30, | 2026 vs 2025 | September 30, | September 30, | 2026 vs 2025 | |||||||||||||||||||||||||||
| Retail Solutions | 2026 | 2025 | % | 2026 | 2025 | % | ||||||||||||||||||||||||||
| End of period installed base (# of terminals) (2) | 37,420 | 40,233 | (2,813 | ) | (7.0 | )% | 37,420 | 40,233 | (2,813 | ) | (7.0 | )% | ||||||||||||||||||||
| Total Retail Solutions - Average installed base (# of terminals) (2) | 37,841 | 41,528 | (3,687 | ) | (8.9 | )% | 38,562 | 41,894 | (3,332 | ) | (8.0 | )% | ||||||||||||||||||||
| Participation - Average installed base (# of terminals) (2) | 30,150 | 30,654 | (504 | ) | (1.6 | )% | 30,914 | 30,753 | 161 | 0.5 | % | |||||||||||||||||||||
| Fixed Rental - Average installed base (# of terminals) | 12,547 | 15,855 | (3,308 | ) | (20.9 | )% | 12,554 | 15,461 | (2,907 | ) | (18.8 | )% | ||||||||||||||||||||
| Service Only - Average installed base (# of terminals) | 8,781 | 9,912 | (1,131 | ) | (11.4 | )% | 8,797 | 9,948 | (1,151 | ) | (11.6 | )% | ||||||||||||||||||||
| Customer Gross Win per unit per day (1) (2) | £ | 105.1 | £ | 97.7 | £ | 7.4 | 7.6 | % | £ | 103.8 | £ | 98.7 | £ | 5.1 | 5.2 | % | ||||||||||||||||
| Customer Net Win per unit per day (1) (2) | £ | 77.2 | £ | 72.1 | £ | 5.1 | 7.1 | % | £ | 76.4 | £ | 72.9 | £ | 3.5 | 4.8 | % | ||||||||||||||||
| Inspired Blended Participation Rate | 5.9 | % | 6.7 | % | (0.8 | )% | (11.9 | )% | 5.9 | % | 6.5 | % | (0.6 | )% | (9.2 | )% | ||||||||||||||||
| Inspired Fixed Rental Revenue per Retail Solutions Machine per week | £ | 37.5 | £ | 45.1 | £ | (7.6 | ) | (16.9 | )% | £ | 36.8 | £ | 47.5 | £ | (10.7 | ) | (22.5 | )% | ||||||||||||||
| Inspired Service Rental Revenue per Retail Solutions Machine per week | £ | 7.2 | £ | 7.8 | £ | (0.6 | ) | (7.7 | )% | £ | 7.8 | £ | 8.2 | £ | (0.4 | ) | (4.9 | )% | ||||||||||||||
| Retail Solutions Long term license amortization (£’m) | £ | 1.0 | £ | 0.7 | £ | 0.3 | 42.9 | % | £ | 2.9 | £ | 1.8 | £ | 1.1 | 61.1 | % | ||||||||||||||||
| Number of Machine sales | 1,169 | 1,799 | (630 | ) | (35.0 | )% | 2,483 | 2,650 | (167 | ) | (6.3 | )% | ||||||||||||||||||||
| Average selling price per terminal | £ | 5,375 | £ | 2,506 | £ | 2,869 | 114.5 | % | £ | 5,340 | £ | 5,495 | £ | (155 | ) | (2.8 | )% | |||||||||||||||
| Total Holiday Parks Revenue (£’m) | £ | - | £ | 11.0 | £ | (11.0 | ) | (100.0 | )% | £ | - | £ | 14.0 | £ | (14.0 | ) | (100.0 | )% | ||||||||||||||
| (1) | Includes all SBG terminals in which the Company takes a participation revenue share across all territories. |
| (2) | Includes approximately 2,500 lottery terminals where the revenue share is on handle instead of net win. |
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In the table above:
“End of Period Installed Base” represent the number of gaming machines installed (excluding Holiday Park machines) that are Category B and Category C only (UK Gambling Act 2005 places machines into categories dependent on maximum stake and prize available), This is equal to the number of deployed Retail Solutions terminals at the end of each period that have been placed on a participation or fixed rental basis. Retail Solutions participation revenue, which comprises the majority of Retail Solutions service revenue, is directly related to the participation terminal installed base. This is the medium by which our customers generate revenue and pay a revenue share to the Company. To the extent all other KPIs and certain other factors remain constant, the larger the installed base, the higher the Company’s revenue would be for a given period. Management gives careful consideration to this KPI in terms of driving growth across the segment. This does not include Service Only terminals.
Revenue is derived from the performance of the installed base as described by the Gross and Net Win KPIs.
If the End of Period Installed Base is materially different from the Average Installed Base (described below), we believe this gives an indication as to potential future performance. We believe the End of Period Installed Base is particularly useful for assessing new customers or markets, to indicate the progress being made with respect to entering new territories or jurisdictions.
“Total Retail Solutions - Average Installed Base” is the average number of deployed Retail Solutions terminals during the period consisting of both participation terminals and fixed rental terminals. Therefore, it is more closely aligned to revenue in the period. We believe this measure is particularly useful for assessing existing customers or markets to provide comparisons of historical size and performance. This does not include Service Only terminals.
“Participation - Average Installed Base” is the average number of deployed Retail Solutions terminals that generated revenue on a participation basis.
“Fixed Rental - Average Installed Base” is the average number of deployed Retail Solutions terminals that generated revenue on a fixed rental basis.
“Service Only - Average Installed Base” is the average number of terminals that generated revenue on a Service only basis.
“Customer Gross Win per unit per day” is a KPI used by our management to (i) assess impact on the Company’s revenue, (ii) determine changes in the performance of the overall market and (iii) evaluate the impact of regulatory change and our new content releases on our customers. Customer Gross Win per unit per day is the average per unit cash generated across all Gaming terminals in which the Company takes a participation revenue share across all territories in the period, defined as the difference between the amounts staked less winnings to players divided by the Average Installed Base in the period, then divided by the number of days in the period.
Retail Solutions revenue accrued in the period is derived from Customer Gross Win accrued in the period after deducting gaming taxes (defined as a regulatory levy paid by the Customer to government bodies) and applying the Company’s contractual revenue share percentage.
Our management believes Customer Gross Win measures are meaningful because they represent a view of customer operating performance that is unaffected by our revenue share percentage and allow management to (1) readily view operating trends, (2) perform analytical comparisons and benchmarking between customers and (3) identify strategies to improve operating performance in the different markets in which we operate.
“Customer Net Win per unit per day” is Customer Gross Win per unit per day after giving effect to the deduction of gaming taxes.
“Inspired Blended Participation Rate” is the Company’s average revenue share percentage across all participation terminals where revenue is earned on a participation basis, weighted by Customer Net Win per unit per day.
“Inspired Fixed Rental Revenue per Gaming Machine per week” is the Company’s average fixed rental amount across all fixed rental terminals where revenue is generated on a fixed fee basis, per unit per week.
“Inspired Service Rental Revenue per Retail Solutions Machine per week” is the Company’s average service rental amount across all service only rental terminals where revenue is generated on a service only fixed fee basis, per unit per week.
“Retail Solutions Long term license amortization” is the upfront license fee per terminal which is typically spread over the life of the terminal.
Our overall Retail Solutions revenue from terminals placed on a participation basis can therefore be calculated as the product of the Participation - Average Installed Base, the Customer Net Win per unit per day, the number of days in the period, and the Inspired Blended Participation Rate, which is equal to “Participation Revenue”.
“Number of Machine sales” is the number of terminals sold during the period.
“Average selling price per terminal” is the total revenue in GBP of the Retail Solutions terminals sold divided by the “number of Machine sales”.
| 27 |
Retail Solutions, Recurring Revenue
Set forth below is a breakdown of our Retail Solutions recurring revenue. Retail Solutions recurring revenue principally consist of Retail Solutions participation revenue and fixed rental revenue.
For the Three-Month Period ended | Variance | For the Nine-Month Period ended | Variance | |||||||||||||||||||||||||||||
| September 30, | September 30, | 2026 vs 2025 | September 30, | September 30, | 2026 vs 2025 | |||||||||||||||||||||||||||
| (In £ millions) | 2026 | 2025 | % | 2026 | 2025 | % | ||||||||||||||||||||||||||
| Retail Solutions Recurring Revenue | ||||||||||||||||||||||||||||||||
| Total Retail Solutions Revenue | £ | 27.8 | £ | 45.8 | £ | (18.0 | ) | (39 | )% | £ | 78.5 | £ | 120.3 | £ | (41.8 | ) | (35 | )% | ||||||||||||||
| Retail Solutions Participation Revenue | £ | 12.6 | £ | 13.6 | £ | (1.0 | ) | (7 | )% | £ | 38.0 | £ | 40.4 | £ | (2.4 | ) | (6 | )% | ||||||||||||||
| Retail Solutions Project Recurring Revenue | £ | 0.1 | £ | 0.2 | £ | (0.1 | ) | (50 | )% | £ | 0.4 | £ | 1.1 | £ | (0.7 | ) | (64 | )% | ||||||||||||||
| Other Fixed Fee Recurring Revenue | £ | 7.0 | £ | 10.3 | £ | (3.3 | ) | (32 | )% | £ | 20.7 | £ | 31.6 | £ | (10.9 | ) | (34 | )% | ||||||||||||||
| Retail Solutions Long-term license amortization | £ | 1.0 | £ | 0.7 | £ | 0.3 | 43 | % | £ | 2.9 | £ | 1.8 | £ | 1.1 | 61 | % | ||||||||||||||||
| Retail Solutions Holiday Parks Recurring Revenue | £ | - | £ | 14.5 | £ | (14.5 | ) | (100 | )% | £ | - | £ | 28.2 | £ | (28.2 | ) | (100 | )% | ||||||||||||||
| Total Retail Solutions Recurring Revenue | £ | 20.7 | £ | 39.3 | £ | (18.6 | ) | (47 | )% | £ | 62.0 | £ | 103.1 | £ | (41.1 | ) | (40 | )% | ||||||||||||||
| Retail Solutions Recurring Revenue as a % of Total Retail Solutions Revenue | 74 | % | 86 | % | (12 | )% | 79 | % | 86 | % | (7 | )% | ||||||||||||||||||||
In the table above:
“Retail Solutions Participation Revenue” includes our share of revenue generated from (i) our Retail Solutions terminals placed in gaming and lottery venues; and (ii) licensing of our game content and intellectual property to third parties.
“Retail Solutions Other Fixed Fee Recurring Revenue” includes service revenue in which the Company earns a periodic fixed fee on a contracted basis.
“Retail Solutions Project Recurring Revenue” relates specifically to a single customer for machine estate upgrades and distribution.
“Retail Solutions Long term license amortization” – see the definition provided above.
“Total Retail Solutions Recurring Revenue” is equal to Retail Solutions Participation Revenue plus Retail Solutions Other Fixed Fee Recurring Revenue.
Retail Solutions, Service Revenue by Region
Set forth below is a breakdown of our Retail Solutions service revenue by geographic region. Retail Solutions Service revenue consists principally of Retail Solutions participation revenue, Retail Solutions other fixed fee revenue, Retail Solutions long-term license amortization and Retail Solutions other non-recurring revenue. See “Retail Solutions Segment Revenue” below for a discussion of gaming service revenue between the periods under review.
| For the Three-Month | For the Nine-Month | |||||||||||||||||||||||||||||||||||||||
| Period ended | Variance | Period ended | Variance | |||||||||||||||||||||||||||||||||||||
| (In millions) | September 30, 2026 | September 30, 2025 | 2026 vs 2025 | Total Functional Currency % | September 30, 2026 | September 30, 2025 | 2026 vs 2025 | Total Functional Currency % | ||||||||||||||||||||||||||||||||
| Service Revenue: | ||||||||||||||||||||||||||||||||||||||||
| UK LBO | $ | 11.1 | $ | 11.1 | - | - | - | $ | 34.7 | $ | 33.1 | $ | 1.6 | 5 | % | 2 | % | |||||||||||||||||||||||
| UK Holiday Parks | - | 19.7 | (19.7 | ) | (100 | )% | (100 | )% | - | 38.1 | (38.1 | ) | (100 | )% | (1 | )% | ||||||||||||||||||||||||
| UK Other | 9.9 | 17.7 | (7.8 | ) | (44 | )% | (44 | )% | 26.3 | 51.5 | (25.2 | ) | (49 | )% | 1 | % | ||||||||||||||||||||||||
| Italy | 0.4 | 0.4 | - | - | 10 | % | 1.2 | 1.1 | 0.1 | 9 | % | 3 | % | |||||||||||||||||||||||||||
| Greece | 5.0 | 4.4 | 0.6 | 14 | % | 11 | % | 14.6 | 13.7 | 0.9 | 7 | % | 3 | % | ||||||||||||||||||||||||||
| Rest of the World | 0.3 | 0.3 | - | - | (12 | )% | 4.9 | 0.7 | 4.2 | 600 | % | 14 | % | |||||||||||||||||||||||||||
| Lotteries | 1.5 | 1.4 | 0.1 | 7 | % | 11 | % | 4.1 | 4.0 | 0.1 | 3 | % | 3 | % | ||||||||||||||||||||||||||
| Total Service revenue | $ | 28.2 | $ | 55.0 | $ | (26.8 | ) | (49 | )% | (49 | )% | $ | 85.8 | $ | 142.2 | $ | (56.4 | ) | (40 | )% | 1 | % | ||||||||||||||||||
| Exchange Rate - $ to £ | 1.34 | 1.35 | 1.34 | 1.32 | ||||||||||||||||||||||||||||||||||||
Note: Exchange rate in the table is calculated by dividing the USD total service revenue by the GBP total service revenue, therefore this could be slightly different from the average rate during the period depending on timing of transactions.
| 28 |
Retail Solutions, Results of Operations
| For the Three-Month | Variance | For the Nine-Month | Variance | |||||||||||||||||||||||||||||||||||||||||||||
| Period ended | 2026 vs 2025 | Period ended | 2026 vs 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | September 30, 2026 | September 30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | September 30, 2026 | September 30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | ||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Service | $ | 28.2 | $ | 55.0 | $ | (0.1 | ) | $ | (26.7 | ) | (49 | )% | (49 | )% | $ | 85.8 | $ | 142.2 | $ | 1.6 | $ | (58.0 | ) | (41 | )% | (40 | )% | |||||||||||||||||||||
| Product | 9.2 | 6.8 | - | 2.4 | 35 | % | 35 | % | 19.6 | 16.7 | 0.2 | 2.7 | 16 | % | 17 | % | ||||||||||||||||||||||||||||||||
| Total revenue | 37.4 | 61.8 | (0.1 | ) | (24.3 | ) | (39 | )% | (39 | )% | 105.4 | 158.9 | 1.8 | (55.3 | ) | (35 | )% | (34 | )% | |||||||||||||||||||||||||||||
| Cost of Sales, excluding depreciation and amortization: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of Service | (6.2 | ) | (20.6 | ) | 0.1 | 14.3 | (69 | )% | (70 | )% | (20.8 | ) | (54.2 | ) | - | 33.4 | (62 | )% | (62 | )% | ||||||||||||||||||||||||||||
| Cost of Product | (4.5 | ) | (3.7 | ) | - | (0.8 | ) | 22 | % | 22 | % | (10.6 | ) | (10.6 | ) | (0.2 | ) | 0.2 | (2 | )% | 0 | % | ||||||||||||||||||||||||||
| Total cost of sales | (10.7 | ) | (24.3 | ) | 0.1 | 13.5 | (56 | )% | (56 | )% | (31.4 | ) | (64.8 | ) | (0.2 | ) | 33.6 | (52 | )% | (52 | )% | |||||||||||||||||||||||||||
| Staff-related selling, general and administrative expenses | (5.1 | ) | (8.5 | ) | (0.1 | ) | 3.5 | (41 | )% | (40 | )% | (14.4 | ) | (24.6 | ) | (0.7 | ) | 10.9 | (44 | )% | (41 | )% | ||||||||||||||||||||||||||
| Non-staff related selling, general and administrative expenses | (3.0 | ) | (7.9 | ) | - | 4.9 | (62 | )% | (62 | )% | (10.7 | ) | (20.8 | ) | (0.3 | ) | 10.4 | (50 | )% | (49 | )% | |||||||||||||||||||||||||||
| Labor costs capitalized | 1.0 | 1.5 | - | (0.5 | ) | (33 | )% | (33 | )% | 3.4 | 5.4 | 0.2 | (2.2 | ) | (41 | )% | (37 | )% | ||||||||||||||||||||||||||||||
| Other segment items: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | (0.2 | ) | (0.2 | ) | - | (0.0 | ) | 0 | % | 0 | % | (0.6 | ) | (1.0 | ) | - | 0.4 | (40 | )% | (40 | )% | |||||||||||||||||||||||||||
| Depreciation and amortization | (9.8 | ) | (9.1 | ) | (0.1 | ) | (0.6 | ) | 7 | % | 8 | % | (27.9 | ) | (27.9 | ) | (0.6 | ) | 0.6 | (2 | )% | 0 | % | |||||||||||||||||||||||||
| Held for sales adjustment - Impairment | - | (5.9 | ) | 0.0 | 5.9 | (100 | )% | (100 | )% | - | (5.9 | ) | 0.0 | 5.9 | (100 | )% | (100 | )% | ||||||||||||||||||||||||||||||
| Other selling, general and administrative expenses | (0.1 | ) | (1.2 | ) | - | 1.1 | (92 | )% | (92 | )% | (1.2 | ) | (1.8 | ) | - | 0.6 | (33 | )% | (33 | )% | ||||||||||||||||||||||||||||
| Net operating Income | $ | 9.5 | $ | 6.2 | $ | (0.2 | ) | $ | 3.5 | 56 | % | 53 | % | $ | 22.6 | $ | 17.5 | $ | 0.2 | $ | 4.9 | 28 | % | 29 | % | |||||||||||||||||||||||
| Exchange Rate - $ to £ | 1.34 | 1.35 | 1.34 | 1.32 | ||||||||||||||||||||||||||||||||||||||||||||
Note: Exchange rate in the table is calculated by dividing the USD total revenue by the GBP total revenue, therefore this could be slightly different from the average rate during the period depending on timing of transactions.
All variances discussed in the Retail Solutions results below are on a functional currency (at constant rate) basis, which excludes the impact of any changes in foreign currency exchange rates.
Retail Solutions Net Operating Income
Net operating income for the three-month period ended September 30, 2026, increased by $3.5 million, compared to the three-month period ended September 30, 2025, and net operating income for the nine-month period ended September 30, 2026, increased by $4.9 million, compared to the nine-month period ended September 30, 2025, primarily driven by the sales of the UK holiday parks business and certain associated leisure assets, and the pub operator model restructuring.
| 29 |
Virtual Sports
We generate revenue from our Virtual Sports segment through the on-premise solution and hosting of our products. We primarily receive fees on a participation basis. Our participation contracts are typically structured to pay us a percentage of net win (defined as net revenue to our operator customers, after deducting player winnings, free bets or plays and other promotional costs and any relevant regulatory levies) from Virtual Sports content placed on our customers’ websites or in our customers’ facilities. Typically, we recognize revenue from these arrangements on a daily basis over the term of the contract.
Revenue growth for our Virtual Sports segment is principally driven by the number of customers we have, the net win performance of the games and the net win percentage that we receive pursuant to our contracts with our customers.
Virtual Sports, Key Performance Indicators
For the Three-Month Period ended | Variance | For the Nine-Month Period ended | Variance | |||||||||||||||||||||||||||||
| September 30, | September 30, | 2026 vs 2025 | September 30, | September 30, | 2026 vs 2025 | |||||||||||||||||||||||||||
| 2026 | 2025 | % | 2026 | 2025 | % | |||||||||||||||||||||||||||
| Virtuals | ||||||||||||||||||||||||||||||||
| No. of Live Customers at the end of the period | 59 | 60 | (1.0 | ) | (1.7 | )% | 59 | 60 | (1.0 | ) | (1.7 | )% | ||||||||||||||||||||
| Average No. of Live Customers | 59 | 60 | (1.0 | ) | (1.7 | )% | 59 | 58 | 1.0 | 1.7 | % | |||||||||||||||||||||
| Total Revenue (£’m) | £ | 6.3 | £ | 6.9 | £ | (0.6 | ) | (8.7 | )% | £ | 19.4 | £ | 20.7 | £ | (1.3 | ) | (6.3 | )% | ||||||||||||||
| Total Revenue £’m - Retail | £ | 2.2 | £ | 2.3 | £ | (0.1 | ) | (4.3 | )% | £ | 6.5 | £ | 6.7 | £ | (0.2 | ) | (3.0 | )% | ||||||||||||||
| Total Revenue £’m - Online Virtuals | £ | 4.1 | £ | 4.6 | £ | (0.5 | ) | (10.9 | )% | £ | 12.9 | £ | 14.0 | £ | (1.1 | ) | (7.9 | )% | ||||||||||||||
In the table above:
“No. of Live Customers at the end of the period” and “Average No. of Live Customers” represent the number of customers from which there is Virtual Sports revenue at the end of the period and the average number of customers from which there is Virtual Sports revenue during the period, respectively.
“Total Revenue (£m)” represents total revenue for the Virtual Sports segment, including recurring and upfront service revenue. Total revenue is also divided between “Total Revenue (£m) – Retail,” which consists of revenue earned through players wagering at Virtual Sports venues, “Total Revenue (£m) – Online Virtuals,” which consists of revenue earned through players wagering on Virtual Sports online.
| 30 |
Virtual Sports, Recurring Revenue
Set forth below is a breakdown of our Virtual Sports recurring revenue, which consists of Retail Virtuals and Online Virtuals recurring revenue as well as long-term license amortization. See “Virtual Sports Segment Revenue” below for a discussion of Virtual Sports Service revenue between the periods under review.
For the Three-Month Period ended | Variance | For the Nine-Month Period ended | Variance | |||||||||||||||||||||||||||||
| September 30, | September 30, | 2026 vs 2025 | September 30, | September 30, | 2026 vs 2025 | |||||||||||||||||||||||||||
| (In £ millions) | 2026 | 2025 | % | 2026 | 2025 | % | ||||||||||||||||||||||||||
| Virtual Sports Recurring Revenue | ||||||||||||||||||||||||||||||||
| Total Virtual Sports Revenue | £ | 6.3 | £ | 6.9 | £ | (0.6 | ) | (9 | )% | £ | 19.4 | £ | 20.7 | £ | (1.3 | ) | (6 | )% | ||||||||||||||
| Recurring Revenue - Retail Virtuals | £ | 2.0 | £ | 2.0 | £ | (0.0 | ) | (0 | )% | £ | 5.9 | £ | 6.1 | £ | (0.2 | ) | (3 | )% | ||||||||||||||
| Recurring Revenue - Online Virtuals | £ | 4.1 | £ | 4.5 | £ | (0.4 | ) | (9 | )% | £ | 12.7 | £ | 13.6 | £ | (0.9 | ) | (7 | )% | ||||||||||||||
| Total Virtual Sports Long-term license amortization | £ | 0.2 | £ | 0.3 | £ | (0.1 | ) | (33 | )% | £ | 0.6 | £ | 0.7 | £ | (0.1 | ) | (14 | )% | ||||||||||||||
| Total Virtual Sports Recurring Revenue | £ | 6.3 | £ | 6.8 | £ | (0.5 | ) | (7 | )% | £ | 19.2 | £ | 20.4 | £ | (1.2 | ) | (6 | )% | ||||||||||||||
| Virtual Sports Recurring Revenue as a Percentage of Total Virtual Sports Revenue | 100 | % | 99 | % | 99 | % | 99 | % | ||||||||||||||||||||||||
“Recurring Revenue” includes our share of revenue generated from (i) our Virtual Sports products placed with operators; (ii) licensing our game content and intellectual property to third parties; and (iii) our games on third-party online gaming platforms that are interoperable with our game servers.
“Virtual Sports Long term license amortization” is the upfront license fee which is typically spread over the life of the contract.
| 31 |
Virtual Sports, Results of Operations
| For the Three-Month | Variance | For the Nine-Month | Variance | |||||||||||||||||||||||||||||||||||||||||||||
| Period ended | 2026 vs 2025 | Period ended | 2026 vs 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | September
30, 2026 | September
30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | September
30, 2026 | September
30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | ||||||||||||||||||||||||||||||||||||
| Service Revenue | $ | 8.5 | $ | 9.3 | $ | (0.1 | ) | $ | (0.7 | ) | (8 | )% | (9 | )% | $ | 26.1 | $ | 27.2 | $ | 0.6 | $ | (1.7 | ) | (6 | )% | (4 | )% | |||||||||||||||||||||
| Cost of Service | (0.5 | ) | (0.6 | ) | - | 0.1 | (17 | )% | (17 | )% | (1.6 | ) | (1.8 | ) | - | 0.2 | (11 | )% | (11 | )% | ||||||||||||||||||||||||||||
| Staff-related selling, general and administrative expenses | (2.3 | ) | (2.4 | ) | - | 0.1 | (4 | )% | (4 | )% | (6.7 | ) | (7.0 | ) | (0.1 | ) | 0.4 | (6 | )% | (4 | )% | |||||||||||||||||||||||||||
| Non-staff related selling, general and administrative expenses | (0.5 | ) | (0.6 | ) | 0.1 | - | 0 | % | (17 | )% | (1.1 | ) | (1.7 | ) | - | 0.6 | (35 | )% | (35 | )% | ||||||||||||||||||||||||||||
| Labor costs capitalized | 0.5 | 0.9 | (0.1 | ) | (0.3 | ) | (33 | )% | (44 | )% | 1.8 | 2.8 | 0.1 | (1.1 | ) | (39 | )% | (36 | )% | |||||||||||||||||||||||||||||
| Other segment items: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Staff-related selling, general and administrative expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | (0.2 | ) | (0.1 | ) | - | (0.1 | ) | 100 | % | 100 | % | (0.5 | ) | (0.3 | ) | - | (0.2 | ) | 67 | % | 67 | % | ||||||||||||||||||||||||||
| Depreciation and amortization | (2.0 | ) | (1.6 | ) | - | (0.4 | ) | 25 | % | 25 | % | (6.8 | ) | (4.8 | ) | (0.2 | ) | (1.8 | ) | 38 | % | 42 | % | |||||||||||||||||||||||||
| Net operating Income | $ | 3.5 | $ | 4.9 | $ | (0.1 | ) | $ | (1.3 | ) | (27 | )% | (29 | )% | $ | 11.2 | $ | 14.4 | $ | 0.4 | $ | (3.6 | ) | (25 | )% | (22 | )% | |||||||||||||||||||||
| Exchange Rate - $ to £ | 1.34 | 1.35 | 1.34 | 1.32 | ||||||||||||||||||||||||||||||||||||||||||||
Note: Exchange rate in the table is calculated by dividing the USD service revenue by the GBP service revenue, therefore this could be slightly different from the average rate during the period depending on timing of transactions.
All variances discussed in the Virtual Sports results below are on a functional currency (at constant rate) basis, which excludes the impact of any changes in foreign currency exchange rates.
Virtual Sports Revenue
During the three and nine-month period ended September 30, 2026, revenue decreased by $0.7 million and $1.7 million, or 8% and 6%, respectively compared to the three and nine-month period ended September 30, 2025, primarily driven by lower revenue from a key customer, and the provisional measure prohibiting regulated online betting and gaming operations in Brazil.
Virtual Sports Net Operating Income
During the three-month period ended September 30, 2026, net operating income decreased by $1.3 million compared to the three-month period ended September 30, 2025, primarily due to a decrease in gross margin of $0.6 million, an increase in depreciation and amortization of $0.4 million, and a reduction in labor capitalization of $0.3 million.
During the nine-month period ended September 30, 2026, net operating income decreased by $3.6 million compared to the nine-month period ended September 30, 2025, mainly due to an increase in depreciation and amortization of $1.8 million and a decrease in gross margin of $1.5 million.
Interactive
We generate revenue from our Interactive segment through the various games and content made available via third party aggregation platforms with Inspired’s remote gaming server or directly on the customers remote gaming server platform, and services such as customer support, platform maintenance, updates and upgrades. Typically, we receive fees on a participation basis. Our participation contracts are usually structured to pay us a percentage of net win (defined as net revenue to our operator customers, after deducting player winnings, free bets or plays and other promotional costs and any relevant regulatory levies) from Interactive content placed on our customers’ websites. Typically, we recognize revenue from these arrangements on a daily basis over the term of the contract.
Revenue growth for our Interactive segment is principally driven by the number of customers we have, the number of live games, the net win performance of the games and the net win percentage that we receive pursuant to our contracts with our customers.
| 32 |
Interactive, Key Performance Indicators
| For the Three-Month Period ended | Variance | For the Nine-Month Period ended | Variance | |||||||||||||||||||||||||||||
| September 30, | September 30, | 2026 vs 2025 | September 30, | September 30, | 2026 vs 2025 | |||||||||||||||||||||||||||
| 2026 | 2025 | % | 2026 | 2025 | % | |||||||||||||||||||||||||||
| Interactive | ||||||||||||||||||||||||||||||||
| No. of Live Customers at the end of the period | 225 | 199 | 26 | 13.1 | % | 225 | 199 | 26 | 13.1 | % | ||||||||||||||||||||||
| Average No. of Live Customers | 220 | 197 | 23 | 11.7 | % | 216 | 191 | 25 | 13.1 | % | ||||||||||||||||||||||
| No. of Games available at the end of the period | 381 | 334 | 47 | 14.1 | % | 381 | 334 | 47 | 14.1 | % | ||||||||||||||||||||||
| Average No. of Games available | 372 | 331 | 41 | 12.4 | % | 358 | 324 | 34 | 10.5 | % | ||||||||||||||||||||||
| No. of Live Games at the end of the period | 358 | 311 | 47 | 15.1 | % | 358 | 311 | 47 | 15.1 | % | ||||||||||||||||||||||
| Average No. of Live Games | 349 | 308 | 41 | 13.3 | % | 335 | 300 | 35 | 11.7 | % | ||||||||||||||||||||||
| Total Revenue (£’m) | £ | 11.5 | £ | 11.3 | £ | 0.2 | 1.8 | % | £ | 35.6 | £ | 31.0 | £ | 4.6 | 14.8 | % | ||||||||||||||||
In the table above:
“No. of Live Customers at the end of the period” and “Average No. of Live Customers” represent the number of customers from which there is Interactive revenue at the end of the period and the average number of customers from which there is Interactive revenue during the period, respectively.
“No. of Games available at the end of the period” and “Average No. of Games available” represents the number of games that are available for operators to deploy at the end of the period (including inactive legacy games still available and inactive new games that are available but have not yet gone live with any operators) and the average number of games that are available for operators to deploy during the period, respectively. This incorporates both live games and inactive games.
“No. of Live Games at the end of the period” and “Average No. of Live Games” represents the number of games from which there is Interactive revenue at the end of the period and the average number of games from which there is Interactive revenue during the period, respectively.
“Total Revenue (£m)” represents total revenue for the Interactive segment, including recurring and upfront service revenue.
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Interactive, Results of Operations
For the Three-Month | Variance | For the Nine-Month | Variance | |||||||||||||||||||||||||||||||||||||||||||||
| Period ended | 2026 vs 2025 | Period ended | 2026 vs 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | September
30, 2026 | September
30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | September
30, 2026 | September
30, 2025 | Variance Attributable to Currency Movement | Variance on a Functional currency basis | Total Functional Currency Variance % | Total Reported Variance % | ||||||||||||||||||||||||||||||||||||
| Service Revenue | $ | 15.5 | $ | 15.1 | $ | (0.1 | ) | $ | 0.5 | 3 | % | 3 | % | $ | 47.9 | $ | 40.8 | $ | 1.0 | $ | 6.1 | 15 | % | 17 | % | |||||||||||||||||||||||
| Cost of Service | (0.7 | ) | (0.8 | ) | - | 0.1 | (13 | )% | (13 | )% | (2.3 | ) | (2.2 | ) | (0.1 | ) | - | 0 | % | 5 | % | |||||||||||||||||||||||||||
| Staff-related selling, general and administrative expenses | (3.5 | ) | (2.9 | ) | - | (0.6 | ) | 21 | % | 21 | % | (9.7 | ) | (8.3 | ) | (0.2 | ) | (1.2 | ) | 14 | % | 17 | % | |||||||||||||||||||||||||
| Non-staff related selling, general and administrative expenses | (2.1 | ) | (1.5 | ) | - | (0.6 | ) | 40 | % | 40 | % | (6.3 | ) | (5.1 | ) | (0.1 | ) | (1.1 | ) | 22 | % | 24 | % | |||||||||||||||||||||||||
| Labor costs capitalized | 1.0 | 0.8 | - | 0.2 | 25 | % | 25 | % | 2.7 | 2.3 | 0.1 | 0.3 | 13 | % | 17 | % | ||||||||||||||||||||||||||||||||
| Other segment items: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | (0.2 | ) | (0.2 | ) | - | - | 0 | % | 0 | % | (0.5 | ) | (0.5 | ) | - | - | 0 | % | 0 | % | ||||||||||||||||||||||||||||
| Depreciation and amortization | (2.2 | ) | (1.9 | ) | - | (0.3 | ) | 16 | % | 16 | % | (5.2 | ) | (4.2 | ) | (0.1 | ) | (0.9 | ) | 21 | % | 24 | % | |||||||||||||||||||||||||
| Net operating Income | $ | 7.8 | $ | 8.6 | $ | (0.1 | ) | $ | (0.7 | ) | (8 | )% | (9 | )% | $ | 26.6 | $ | 22.8 | $ | 0.6 | $ | 3.2 | 14 | % | 17 | % | ||||||||||||||||||||||
| Exchange Rate - $ to £ | 1.34 | 1.35 | 1.34 | 1.32 | ||||||||||||||||||||||||||||||||||||||||||||
Note: Exchange rate in the table is calculated by dividing the USD service revenue by the GBP service revenue, therefore this could be slightly different from the average rate during the period depending on timing of transactions.
All variances discussed in the Interactive results below are on a functional currency (at constant rate) basis, which excludes the impact of any changes in foreign currency exchange rates.
Interactive Revenue
During three and nine-month periods ended September 30, 2026, revenue increased by $0.5 million and $6.1 million, or 3% and 15%, respectively, compared to the three and nine-month periods ended September 30, 2025, mainly driven by recurring revenue growth in the UK, mainland Europe and North America. UK revenue growth was partially offset by higher UK remote gaming taxes applicable from Q2 2026.
Interactive Net Operating Income
Net operating income for the three-month period ended September 30, 2026, decreased by $0.7 million, compared to the three-month period ended September 30, 2025. This decrease was driven by the increases in staff and non-staff related selling, general and administrative expenses of $1.0 million, depreciation and amortization of $0.3 million, partially offset by the gross margin increase of $0.6 million
For the nine-month period ended September 30, 2026, compared to the nine-month period ended September 30, 2025, net operating income increased by $3.2 million driven by the increase in gross margin of $6.1 million, partially offset by increases in staff and non-staff related selling, general and administrative expenses of $2.0 million and depreciation and amortization of $0.9 million, incurred to support revenue growth.
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Non-GAAP Financial Measures
We use certain non-GAAP financial measures, including EBITDA, to analyze our operating performance. We use these financial measures to manage our business on a day-to-day basis. We believe that these measures are also commonly used in our industry to measure performance. For these reasons, we believe that these non-GAAP financial measures provide expanded insight into our business, in addition to standard U.S. GAAP financial measures. There are no specific rules or regulations for defining and using non-GAAP financial measures, and as a result the measures we use may not be comparable to measures used by other companies, even if they have similar labels. The presentation of non-GAAP financial information should not be considered in isolation from, or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S. GAAP. You should consider our non-GAAP financial measures in conjunction with our U.S. GAAP financial measures.
We define our non-GAAP financial measures as follows:
EBITDA is defined as net income (loss) excluding depreciation and amortization, interest expense, interest income and income tax expense.
Adjusted EBITDA is defined as net income (loss) excluding depreciation and amortization, interest expense, interest income and income tax expense, and other additional exclusions and adjustments (see Adjusted EBITDA reconciliation table). Such additional excluded amounts include stock-based compensation U.S. GAAP charges where the associated liability is expected to be settled in stock, and changes in the value of earnout liabilities and income and expenditure in relation to legacy portions of the business (being those portions where trading no longer occurs) including closed defined benefit pension schemes. Additional adjustments are made for items considered outside the normal course of business, including but not limited to (1) restructuring costs, which include charges attributable to employee severance, impairments, management changes, restructuring, dual running costs, costs related to facility closures and integration costs, (2) merger and acquisition costs and (3) gains or losses not in the ordinary course of business (4) the costs of the restatement of previously issued financial statements.
We believe Adjusted EBITDA, when considered along with other performance measures, is a particularly useful performance measure, because it focuses on certain operating drivers of the business, including sales growth, operating costs, selling and administrative expense and other operating income and expense. We believe Adjusted EBITDA can provide a more complete understanding of our operating results and the trends to which we are subject, and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income or loss, because it does not take into account certain aspects of our operating performance (for example, it excludes non-recurring gains and losses which are not deemed to be a normal part of underlying business activities). Our use of Adjusted EBITDA may not be comparable to the use by other companies of similarly termed measures. Management compensates for these limitations by using Adjusted EBITDA as only one of several measures for evaluating our operating performance. In addition, capital expenditures, which affect depreciation and amortization, interest expense, and income tax benefit (expense), are evaluated separately by management.
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Functional Currency at Constant rate. Currency impacts discussed have been calculated as the current-period average GBP: USD rate less the equivalent average rate in the prior period, multiplied by the current period amount in our functional currency (GBP). The remaining difference, referred to as functional currency at constant rate, is calculated as the difference in our functional currency, multiplied by the prior-period average GBP: USD rate, as a proxy for functional currency at constant rate movement.
Currency Movement represents the difference between the results in our reporting currency (USD) and the results on a functional currency (at constant rate) basis.
Reconciliations from net loss, as shown in our Consolidates Statements of Operations and Comprehensive Income (Loss), to Adjusted EBITDA are shown below:
Reconciliation to Adjusted EBITDA by segment for the Three and Nine Months ended September 30, 2026
| For the Three-Month Period ended | For the Nine-Month Period ended | |||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2026 | |||||||||||||||||||||||||||||||||||||||
| (In millions) | Total | Retail Solutions | Virtual Sports | Interactive | Corporate | Total | Retail Solutions | Virtual Sports | Interactive | Corporate | ||||||||||||||||||||||||||||||
| Net Income/ (loss) | $ | (0.1 | ) | $ | 9.5 | $ | 3.5 | $ | 7.8 | $ | (20.9 | ) | $ | (0.4 | ) | $ | 22.6 | $ | 11.2 | $ | 26.6 | $ | (60.8 | ) | ||||||||||||||||
| Pension charges (1) | 0.3 | 0.3 | 0.7 | 0.7 | ||||||||||||||||||||||||||||||||||||
| Costs of group restructure (2) | 1.8 | 0.1 | 1.7 | 3.0 | 1.2 | 1.8 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (4) | 1.3 | 0.2 | 0.2 | 0.2 | 0.7 | 4.3 | 0.6 | 0.5 | 0.5 | 2.7 | ||||||||||||||||||||||||||||||
| Depreciation and amortization (4) | 14.5 | 9.8 | 2.0 | 2.2 | 0.5 | 41.5 | 27.9 | 6.8 | 5.2 | 1.6 | ||||||||||||||||||||||||||||||
| Interest expense net (4) | 9.6 | 9.6 | 29.6 | 29.6 | ||||||||||||||||||||||||||||||||||||
| Other finance expenses / (income) (4) | (0.1 | ) | (0.1 | ) | (0.4 | ) | (0.4 | ) | ||||||||||||||||||||||||||||||||
| Income tax (4) | 0.9 | 0.9 | 0.6 | 0.6 | ||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 28.2 | $ | 19.6 | $ | 5.7 | $ | 10.2 | $ | (7.3 | ) | $ | 78.9 | $ | 52.3 | $ | 18.5 | $ | 32.3 | $ | (24.2 | ) | ||||||||||||||||||
| Adjusted EBITDA | £ | 21.0 | £ | 14.6 | £ | 4.2 | £ | 7.6 | £ | (5.4 | ) | £ | 58.8 | £ | 39.0 | £ | 13.7 | £ | 24.0 | £ | (17.9 | ) | ||||||||||||||||||
| Exchange Rate - $ to £ (5) | 1.34 | 1.34 | ||||||||||||||||||||||||||||||||||||||
Note: Certain corporate function costs have not been allocated to the Company’s reportable operating segments because to do so would not be practical; these are shown in the Corporate category.
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Reconciliation to Adjusted EBITDA by segment for the Three and nine Months ended September 30, 2025
| For the Three-Month Period ended | For the Nine-Month Period ended | |||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2025 | |||||||||||||||||||||||||||||||||||||||
| (In millions) | Total | Retail Solutions | Virtual Sports | Interactive | Corporate | Total | Retail Solutions | Virtual Sports | Interactive | Corporate | ||||||||||||||||||||||||||||||
| Net Income/ (loss) | $ | (1.9 | ) | $ | 6.2 | $ | 4.9 | $ | 8.6 | $ | (21.6 | ) | $ | (9.8 | ) | $ | 17.5 | $ | 14.4 | $ | 22.8 | $ | (64.5 | ) | ||||||||||||||||
| Pension charges (1) | 0.3 | 0.3 | 0.8 | 0.8 | ||||||||||||||||||||||||||||||||||||
| Cost of Group Restructure (2) | 1.7 | 1.2 | 0.5 | 5.4 | 1.8 | 3.6 | ||||||||||||||||||||||||||||||||||
| Costs of group restatement (3) | 0.1 | 0.1 | 4.1 | 4.1 | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (4) | 1.4 | 0.2 | 0.1 | 0.2 | 0.9 | 4.6 | 1.0 | 0.3 | 0.5 | 2.8 | ||||||||||||||||||||||||||||||
| Depreciation and amortization (4) | 13.2 | 9.1 | 1.6 | 1.9 | 0.6 | 39.1 | 27.9 | 4.8 | 4.2 | 2.2 | ||||||||||||||||||||||||||||||
| Held for sale adjustment - Impairment (6) | 5.9 | 5.9 | 5.9 | 5.9 | ||||||||||||||||||||||||||||||||||||
| Interest expense net (4) | 12.5 | 12.5 | 26.6 | 26.6 | ||||||||||||||||||||||||||||||||||||
| Other finance expenses / (income) (4) | (0.2 | ) | (0.2 | ) | (0.6 | ) | (0.6 | ) | ||||||||||||||||||||||||||||||||
| Income tax (4) | (0.7 | ) | (0.7 | ) | 3.0 | 3.0 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 32.3 | $ | 22.6 | $ | 6.6 | $ | 10.7 | $ | (7.6 | ) | $ | 79.1 | $ | 54.1 | $ | 19.5 | $ | 27.5 | $ | (22.0 | ) | ||||||||||||||||||
| Adjusted EBITDA | £ | 24.0 | £ | 16.8 | £ | 4.9 | £ | 7.9 | £ | (5.6 | ) | £ | 59.8 | £ | 40.9 | £ | 14.8 | £ | 20.8 | £ | (16.7 | ) | ||||||||||||||||||
| Exchange Rate - $ to £ (5) | 1.35 | 1.32 | ||||||||||||||||||||||||||||||||||||||
Note: Certain corporate function costs have not been allocated to the Company’s reportable operating segments because to do so would not be practical; these are shown in the Corporate category.
Notes to Adjusted EBITDA reconciliation tables above:
| (1) | “Pension charges” are profit and loss charges included within selling, general and administrative expenses, relating to a defined benefit scheme which was closed to new entrants in 1999 and to future accrual in 2010. As well as the amortization of net loss, the figure also includes charges relating to the Pension Protection Fund (which were historically borne by the pension scheme) and a small amount of associated professional services expenses. These costs are included within Corporate Functions. |
| (2) | “Costs of Group Restructure” includes redundancy costs, Payments In Lieu of Notice costs and any associated employer taxes. To qualify as being an adjusting item, costs must be part of a large restructuring project, which will net save ongoing future costs or be in relation to the exit of an Executive. |
| (3) | “Costs of group Restatement” includes accounting advice and other related costs associated with the restatement of financial statements. It also includes costs relating to the SEC inquiry that was concluded in January 2025. To qualify as an adjusting item, costs must be specific to the event and be neither normal nor recurring in nature. |
| (4) | Stock-based compensation expense, Depreciation and amortization, Total other expense, net and Income tax are described above in the Results of Operations line-item discussions. Total expense, net includes interest income, interest expense, change in fair value of earnout liability, change in fair value of derivative liability and other finance income. |
| (5) | Exchange rate in the table is calculated by dividing the USD Adjusted EBITDA by the GBP Adjusted EBITDA, therefore this could be slightly different from the average rate during the period depending on timing of transactions. |
| (6) | Held for sale adjustment – impairment – In Q3 2025, the company entered into a definitive agreement to the sale of its UK holiday parks business and certain associated leisure assets. This includes assets held for sale measured at the lower of carrying value or fair value less the costs to sell. |
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Liquidity and Capital Resources
Nine Months ended September 30, 2026, compared to Nine Months ended September 30, 2025
| Nine Months ended | Variance | |||||||||||
| September 30, | September 30, | 2026 to | ||||||||||
| (in millions) | 2026 | 2025 | 2025 | |||||||||
| Net loss | $ | (0.4 | ) | $ | (9.8 | ) | $ | 9.4 | ||||
| Amortization of debt fees | 3.1 | 2.3 | 0.8 | |||||||||
| Change in fair value of stock-based compensation expense | 4.3 | 4.6 | (0.3 | ) | ||||||||
| Impairment loss on classification as held for sale | - | 5.9 | (5.9 | ) | ||||||||
| Deferred income taxes | 0.3 | (2.8 | ) | 3.1 | ||||||||
| Depreciation and amortization (incl right of use assets) | 43.0 | 42.3 | 0.7 | |||||||||
| Other net cash (utilized)/generated by operating activities | (4.6 | ) | 8.3 | (12.9 | ) | |||||||
| Net cash provided by operating activities | 45.7 | 50.8 | (5.1 | ) | ||||||||
| Net cash used in investing activities | (25.0 | ) | (42.2 | ) | 17.2 | |||||||
| Net cash (used)/generated by financing activities | (26.9 | ) | 3.4 | (30.3 | ) | |||||||
| Net increase in cash classified within assets held for sale | - | (7.6 | ) | 7.6 | ||||||||
| Effect of exchange rates on cash | (0.6 | ) | 2.6 | (3.2 | ) | |||||||
| Net (decrease)/increase in cash and cash equivalents | $ | (6.8 | ) | $ | 7.0 | $ | (13.8 | ) | ||||
Net cash provided by operating activities
For the nine months ended September 30, 2026, net cash provided by operating activities was a $45.7 million inflow, compared to a $50.8 million inflow for the nine months ended September 30, 2025, representing a $5.1 million decrease in cash generation from operating activities. This decrease was driven primarily through the collection of receipts in the prior year relating to machine sales made at the end of 2024 and favorable timing on supplier payments in the prior year.
Change in fair value of stock-based compensation expense decreased by $0.3 million from $4.6 million to $4.3 million. All expenses related to outstanding awards.
Depreciation and amortization increased by $0.7 million, to $43.0 million, with increases of $3.7 million for contract costs, $0.4 million for both intangible assets and software development amortization and $0.3 million for non-machine depreciation largely offset by decreases of $2.6 million for machine depreciation and $1.6 million for right of use leased assets.
Other net cash generated/(utilized) by operating activities decreased by $12.9 million, from a $8.3 million inflow to a $4.6 million outflow. The relative movements between the nine months ended September 30, 2026 and the nine months ended September 30, 2025 resulted in adverse movements in accounts receivable of $21.8 million and in accounts payable and other creditors of $14.7 million. The adverse movement in accounts receivable was due to collection of receipts in the first half of 2025 from several significant machine hardware sales made at the end of 2024. The adverse movements from accounts payable was due to timing of supplier payments and the timing of the roll out of machines being delivered to Greece. Further adverse movements were seen in deferred revenue $7.7 million relating to the unwind of existing balances over the contractual life. These were largely offset by favorable movements in other debtors and prepayments of $33.5 million due to changes in accrued income levels, finance lease debtors and the final collection in 2026 of receipts relating to the sale of part of the Leisure business in 2025.
Net cash used in investing activities
Net cash utilized in investing activities decreased by $17.2 million, to $25.0 million during the nine months ended September 30, 2026. This was driven by reduced spend on plant, property and equipment of $18.4 million and on contract costs by $0.2 million partly offset by higher capital software spend of $1.4 million.
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Net cash used by financing activities
During the nine months ended September 30, 2026, net cash utilized by financing activities was $26.9 million. This included discretionary spend making debt repayments of $23.3 million and repurchase of shares of $5.2 million. Finance lease spend was $3.1 million. These were partly offset by a $4.8 million generation of cash relating to the net increase from a loan received. During the nine months ended September 30, 2025 net cash of $3.4 million was generated by financing activities due to the refinancing of the business in June 2025 which resulted in a net generation of cash of $8.2 million which was partly offset by a $4.8 million outflow relating to finance lease spend.
Funding Needs and Sources
To fund our obligations, we have historically relied on a combination of cash flows provided by operations and the incurrence of additional debt or the refinancing of existing debt. As of September 30, 2026, we had liquidity consisting of $36.5 million in cash and cash equivalents, of which $1.2 million is restricted in escrow until November 2026 and a further $23.6 million of undrawn revolver facility. This compares to $36.2 million of cash and cash equivalents as of September 30, 2025, with a further $24.0 million of revolver facilities undrawn. We had a working capital outflow of $4.6 million for the nine months ended September 30, 2026, compared to an $8.3 million inflow for the nine months ended September 30, 2025.
The level of our working capital surplus or deficit varies with the level of machine production we are undertaking and our capitalization as well as the seasonality evident in some of the businesses. In periods with minimal machine volumes and capital spend, our working capital is typically more stable. In periods where significant numbers of machines are being produced, the levels of inventory and creditors are typically higher and there is a natural timing difference between converting the stock into sellable or capitalized plant and settling payments to suppliers. These factors, along with movements in trading activity levels can result in significant working capital volatility. In periods of low activity, our working capital volatility is reduced. Working capital is reviewed and managed with the aim of ensuring that current liabilities are covered by the level of cash held and the expected level of short-term receipts.
Historically, some of our business operations require cash to be held within the machines. However, with the sale of our holiday park business and certain associated leisure assets in November 2025, the operational float requirement was removed. As of September 30, 2026, none of our $36.5 million of cash was held as operational floats within the machines. At September 30, 2025, $7.6 million of operational floats were held within the machines. However this was included as part of the held-or-sale asset balance and was not included within the $36.2 million of cash and cash equivalents balance.
Management currently believes that the Company’s cash balances on hand, cash flows expected to be generated from operations, and the ability to control and defer capital projects will be sufficient to fund the Company’s net cash requirements through November 2027.
Long Term and Other Debt
| (In millions) | September 30, 2026 | September 30, 2025 | ||||||||||||||
| Cash held | £ | 27.5 | $ | 36.5 | £ | 26.9 | $ | 36.3 | ||||||||
| Original principal senior debt | (252.5 | ) | (335.4 | ) | (270.0 | ) | (363.5 | ) | ||||||||
| Net loan | (3.6 | ) | (4.7 | ) | - | - | ||||||||||
| Cash interest accrued | (7.6 | ) | (10.1 | ) | (8.6 | ) | (11.6 | ) | ||||||||
| Finance lease creditors | (11.0 | ) | (14.6 | ) | (15.7 | ) | (21.1 | ) | ||||||||
| Total | £ | (247.2 | ) | $ | (328.3 | ) | £ | (267.4 | ) | $ | (359.9 | ) | ||||
Note: Table presented in GBP and USD as principal senior debt has a base currency of GBP, movements in the USD value represent foreign currency exchange rate fluctuations.
| 39 |
Debt Covenants
Under the Note Purchase Agreement in place as of September 30, 2026, we are subject to covenant testing on the Senior Notes. The Notes Purchase Agreement requires that the Company maintain a maximum consolidated senior secured net leverage ratio of 5.0x on the test date for the relevant periods ending September 30, 2025, December 31, 2025, March 31, 2026, June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027, stepping down to 4.75x on June 30, 2027 and each relevant period thereafter (the “Notes Financial Covenant”). The Notes Financial Covenant is calculated as the ratio of consolidated senior secured net debt to consolidated pro forma EBITDA (defined as consolidated net income after adding back certain items including (without limitation) interest expense, taxes, depreciation and amortization expenses and exceptional or non-recurring costs and losses and after adjusting for certain projected savings and synergies) for the 12-month period preceding the relevant quarterly testing date and is tested quarterly on a rolling basis. The Notes Purchase Agreement does not include a minimum interest coverage ratio or other financial covenants.
The Senior Facilities Agreement also requires that the Company maintain a maximum consolidated senior secured net leverage ratio of 5.50x on the test date for the relevant periods ending September 30, 2025, December 31, 2025, March 31, 2026, June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027, stepping down to 5.25x on June 30, 2027 and each relevant period thereafter (the “RCF Financial Covenant”). The RCF Financial Covenant is calculated as the ratio of consolidated senior secured net debt to consolidated pro forma EBITDA (defined as net loss excluding depreciation and amortization, interest expense, interest income and income tax expense) for the 12-month period preceding the relevant quarterly testing date and is tested quarterly on a rolling basis. The SFA does not include a minimum interest coverage ratio or other financial covenants.
Covenant testing at September 30, 2026 and September 30, 2025 showed covenant compliance with the current debt facilities in place.
| 40 |
Liens and Encumbrances
As of September 30, 2026, our Senior Notes were secured by the imposition of a fixed and floating charge in favor of the lender over all the assets of the Company and certain of the Company’s subsidiaries.
Share Repurchases
In November 2025 the Board of Directors authorized a new share repurchase program permitting the repurchase, subject to repurchases being effected on or before November 30, 2028 of up to an aggregate amount of $25.0 million of the Company’s issued and outstanding shares of common stock. Since the authorization, the Company has repurchased an aggregate of 763,829 shares at an aggregate cost of $5.6 million. Of these repurchased amounts an aggregate of 707,225 shares at an aggregate cost of $5.2 million were repurchased during the nine months ended September 30, 2026.
The Company’s prior repurchase program expired on May 10, 2025. Under the prior program the Company repurchased an aggregate of 1,193,118 shares at an aggregate cost of $12.0 million (repurchases were effected during the years 2022-2023).
Total cumulative share repurchases under both share repurchase programs amount to an aggregate of 1,956,947 shares at an aggregate cost of $17.6 million.
Contractual Obligations
As of September 30, 2026, our contractual obligations were as follows:
| Less than | More than | |||||||||||||||||||
| Contractual Obligations (in millions) | Total | 1 year | 1-2 years | 3-5 years | 5 years | |||||||||||||||
| Operating activities | ||||||||||||||||||||
| Interest on long term debt | $ | 131.2 | $ | 32.8 | $ | 32.8 | $ | 65.6 | $ | - | ||||||||||
| Purchase of machines | 10.4 | 10.4 | - | - | - | |||||||||||||||
| Financing activities | ||||||||||||||||||||
| Senior bank debt - principal repayment | 335.4 | - | - | 335.4 | - | |||||||||||||||
| Loan | 4.7 | 2.5 | 2.2 | |||||||||||||||||
| Finance lease payments | 14.6 | 4.5 | 5.4 | 4.7 | - | |||||||||||||||
| Operating lease payments | 9.5 | 2.4 | 2.0 | 3.8 | 1.3 | |||||||||||||||
| Interest on non-utilization fees | 1.0 | 0.3 | 0.3 | 0.4 | - | |||||||||||||||
| Total | $ | 506.8 | $ | 52.9 | $ | 42.7 | $ | 409.9 | $ | 1.3 | ||||||||||
Off-Balance Sheet Arrangements
As of September 30, 2026, there were no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, promulgated by the SEC.
Critical Accounting Policies and Accounting Estimates
The preparation of our audited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. We exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenue and expenses, and our disclosure of commitments and contingencies at the date of the consolidated financial statements. On an on-going basis, we evaluate our estimates and judgments. We base our estimates and judgments on a variety of factors, including our historical experience, knowledge of our business and industry and current and expected economic conditions, that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We periodically re-evaluate our estimates and assumptions with respect to these judgments and modify our approach when circumstances indicate that modifications are necessary. While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.
For a discussion of other recently issued accounting standards, and assessments as to their impacts on the Company, see Note 1 “Nature of Operations, Management’s Plans and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of the Company’s 2025 Form 10-K.
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Revenue
Application of GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates. Specifically, complex arrangements with nonstandard terms and conditions may require significant contract interpretation to determine the appropriate accounting. The Company often enters into contracts with customers that consist of a combination of services and products that are accounted for as one or more distinct performance obligations. Management applies judgment in evaluating the contractual terms and conditions that impact the identification of performance obligations and the pattern of revenue recognition. For these arrangements that contain multiple promises, judgement is also required to determine the stand-alone selling price (“SSP”) for each distinct performance obligation. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions, size of the customer, geography and other observable inputs or, as necessary, unobservable considerations such as historical experience, knowledge of our business and industry and our current or expected selling practices.
Revenue recognition is also impacted by our ability to estimate consideration, including, for example, estimates for variable income and for income earned but unbilled prior to the reporting period end. We consider various factors when making these judgments, including a review of specific transactional data and contracted terms, information obtained subsequent to the reporting period end and historical experience. Evaluations are conducted each quarter to assess the adequacy of the estimates.
Other significant judgments include determining whether the Company is acting as the principal or the agent in a transaction.
The Company recognized service and product revenue of $159.8 million and $19.6 million, respectively, for the nine months ended September 30, 2026. The Company’s revenue recognition policy, which requires significant judgments and estimates, is fully described in Note 1 “Nature of Operations, Management’s Plans and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of the Company’s 2025 Form 10-K.
Goodwill Impairment Assessment
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. Performance of the qualitative goodwill assessment requires judgment in identifying and considering the significance of relevant key factors, events and circumstances that affect the fair value or carrying amount of the reporting units. Such events and circumstances that we have considered include macroeconomic conditions, industry specific and market considerations, and reporting unit-specific factors such as overall actual and projected financial performance, among other factors. We also considered the results from the most recent date that a fair value measurement was performed as a part of a quantitative goodwill assessment and specifically the cushion between each reporting unit’s fair value and carrying value. The estimates used to calculate the fair value of a reporting unit as a part of a quantitative goodwill assessment change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment, if any, for each reporting unit.
Long-lived Assets and Finite-lived Intangible Assets
We evaluate the recoverability of intangible assets and other long-lived assets with finite useful lives by comparing the carrying value of the asset group to the estimated undiscounted future cash flows that we expect the asset to generate if events or changes in circumstances indicate that these assets are not recoverable. If the asset group fails the recoverability test, an impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. The fair value is determined using a discounted cash flow approach where projections of future cash flows generated by those assets are discounted using an estimated discount rate. Significant judgment is required to estimate the amount and timing of future cash flows and the relative risk of achieving those cash flows. We also make judgments about the remaining useful lives of intangible assets and other long-lived assets that have finite lives. While we believe our estimates of future operating results and projected cash flows are reasonable, any significant adverse changes in key assumptions (i.e., adverse change in the extent or manner in which an asset or asset group is being used or expectation that, more likely than not, an asset or asset group will be sold or otherwise disposed of before the end of its useful life) or adverse changes in economic and market conditions may cause a change in our evaluation of recoverability or our estimation of fair value and could result in an impairment charge that could be material to our financial statements. Any impairment loss shall be allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value.
Software Development Costs
The Company must apply judgement in determining the amount of software development costs that should be capitalized. Specifically, we must evaluate, on a project-by-project basis, whether the resultant product or platform will be completed and generate ongoing economic benefits, principally through revenue from our customers, which is subject to uncertainties.
Once the software is substantially complete or available for general release, capitalized internal-use and external-use software costs are amortized on a straight-line basis over the estimated economic useful life of the software, which ranges from two to five years. There is judgement involved in estimating the useful life of developed software and the two-to-five-year period was determined based on factors such as the continuous development in the technology, obsolescence, and anticipated life of the service offering before significant upgrades. Management evaluates the useful lives of these assets on a recurring basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our principal market risks are our exposure to changes in foreign currency exchange rates.
Interest Rate Risk
Following the Company’s debt refinancing in June 2025, the Company’s external borrowings are subject to floating interest rates. Our senior notes accrue interest at a rate per annum equal to SONIA plus a margin (based on the Company’s consolidated senior secured net leverage ratio) ranging from 5.50% to 6.00% per annum fixed rate. Therefore, movements in rates such as SONIA will impact on the current borrowings with increases in SONIA leading to a higher interest charge.
In November 2025, the Company entered into two interest rate swap agreements which fix the interest rate on £250.0 million of our debt at 3.6208% plus the margin significantly limiting our exposure to interest rate variations. The full details of the interest rate swaps are fully described in Note 8 Derivatives and Hedging Activities.
As at September 30, 2026, we had £252.5 million ($335.4 million) of senior note debt subject to a floating rate interest charge that can vary with the SONIA rate. If the floating interest rates increased by 1%, the additional interest charge would have been approximately $2.6 million for the nine months ended September 30, 2026. If the floating interest rates increased by 5%, the additional interest charge would have been approximately $13.1 million for the nine months ended September 30, 2026. The additional interest charges are based on the full senior note debt being unhedged.
Up until the debt refinancing in June 2025, the previous external borrowings of senior notes were provided at a fixed rate. Therefore, movements in rates such as SONIA did not impact on the borrowings and the only fluctuation that was reported was solely caused by movements in the exchange rates between the Company’s functional currency and its reporting currency.
Foreign Currency Exchange Rate Risk
Our operations are conducted in various countries around the world, and we receive revenue and pay expenses from these operations in a number of different currencies. As such, our earnings are subject to movements in foreign currency exchange rates when transactions are denominated in (i) currencies other than GBP, which is our functional currency, or (ii) the functional currencies of our subsidiaries, which is not necessarily GBP. To estimate our foreign currency exchange rate risk, we identify material Euro and US Dollar trading and balance sheet amounts and recalculate the result using a 10% movement in the GBP:US Dollar exchange rate. For the trading figures the 10% movement is based on the average exchange rate throughout the reported period and for the balance sheet figures the 10% movement is based on the exchange rate used at September 30, 2026.
Excluding intercompany balances, our Euro functional currency net assets total approximately $39.3 million, and our US Dollar functional currency net assets total approximately $6.4 million. We use a sensitivity analysis model to measure the impact of a 10% adverse movement of foreign currency exchange rates against the US Dollar. A hypothetical 10% adverse change in the value of the Euro and the US Dollar relative to GBP as of September 30, 2026, would result in favorable translation adjustments of approximately $3.5 million and $0.6 million, respectively, recorded in other comprehensive loss.
Included within our trading results are earnings outside of our functional currency. Retained gains from Euro based entities earned in Euros and retained losses from USD based entities earned in US Dollars in the nine months ended September 30, 2026, were €8.8 million and $4.8 million, respectively. A hypothetical 10% adverse change in the value of the Euro and the US Dollar relative to GBP as of September 30, 2026, would result in translation adjustments of approximately $0.9 million favorable and $0.4 million unfavorable, respectively, recorded in trading operations.
The majority of the Company’s trading is in GBP, the functional currency, although the reporting currency of the Company is the US Dollar. As such, changes in the GBP:USD exchange rate have an effect on the Company’s results. A 10% weakening of GBP against the US Dollar would change the trading operations results favorably by approximately $1.1 million and would result in unfavorable translation adjustments of approximately $6.0 million, recorded in other comprehensive loss.
For further information regarding the new external borrowings, see Note 7 to the Consolidated Financial Statements, “Long Term and Other Debt”.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
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Under the supervision, and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of September 30, 2026, due to the material weaknesses described in Item 9A of the Company’s 2025 Form 10-K.
Management continues to progress throughout 2026, with its remediation efforts regarding the previously identified material weaknesses. Specifically, management has implemented new systems and processes to enhance their internal SOX management testing programs, and staffing resources were also increased in both the Finance and IT departments to strengthen internal controls and support ongoing process improvements.
With respect to the material weakness identified and reported in our 2025 Form 10-K related to IT General Controls (as it relates to software updates by third-party vendors), management has designed and implemented procedures to address such deficiencies.
With respect to the material weakness identified and reported in our 2025 Form 10-K related to Capitalized Software and Contract Costs, the Company continues to design and implement new controls, as well as enhance its existing controls and procedures, to address the deficiencies identified.
With respect to the material weakness identified and reported in our 2025 Form 10-K related to revenue and accounts receivable, the Company is progressing through its remediation procedures designed to revalidate historical contracts and address the deficiencies identified.
As of September 30, 2026, as discussed above, the Company has made substantial progress in enhancing its systems, processes, and internal controls over financial reporting, which will also increase operational efficiency. Management remains committed to maintaining a strong control environment through the ongoing evaluation and enhancement of its processes and internal controls to ensure they are appropriately designed and operating effectively to support reliable financial reporting.
Management will additionally continue to implement measures designed to improve processes and address any new, or newly identified, areas of risk. These measures include: (i) ongoing training and education for control owners on control design and execution requirements (ii) the continued development and periodic updating of a comprehensive risk & control matrix supported by detailed process flows and narratives for each reporting cycle (iii) use of standardized control templates to promote consistency in control performance and documentation (iv) further enhance the governance risk and compliance (“GRC”) system to support SOX compliance and (v) enhanced quarterly reporting to the Audit Committee on progress and internal audit reports and findings.
Management’s objective is to complete its remediation efforts by the end of 2026. However, the timing of full remediation will depend on the successful implementation of the enhanced controls and management’s ability to demonstrate sustained operating effectiveness over a sufficient period of time with appropriate supporting evidence before concluding that the remaining material weaknesses have been fully remediated.
Changes in Internal Control over Financial Reporting
Other than the control changes to address previously identified material weaknesses, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters in which it is currently involved are not material, there can be no assurance that such matters, or other legal matters, will not have a material adverse effect on its business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
Our business is subject to a high degree of risk. You should carefully consider the risk factors discussed in Part I, Item 1A of our 2025 Form 10-K. Any of these risks could materially and adversely affect our business, operating results, financial condition and prospects, and cause the value of our common stock to decline, which could cause investors in our common stock to lose all or part of their investments.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During
the three months ended September 30, 2026, none of our officers or directors, as defined in Rule 16a-1(f) under the Securities Exchange
Act of 1934, as amended,
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:
| Exhibit Number | Description | |
| 10.1#* | Amendment, dated August 12, 2026, to Employment Agreement, dated August 3, 2021, as amended, by and between Inspired Gaming (UK) Limited and Carys Damon. | |
| 10.2#* | Separation Agreement, dated August 12, 2026, by and between Inspired Gaming (UK) Limited and Simona Camilleri. | |
| 31.1* | Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
| 31.2* | Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
| 32.1** | Certification of Principal Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
| 32.2** | Certification of Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| # | Indicates management contract or compensatory plan. |
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| INSPIRED ENTERTAINMENT, INC. | ||
| Date: November 5, 2026 | /s/ A. Lorne Weil | |
| Name: | A. Lorne Weil | |
| Title: | Executive Chairman | |
| (Principal Executive Officer) | ||
| Date: November 5, 2026 | /s/ Craig Wilson | |
| Name: | Craig Wilson | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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