Inspired Entertainment (INSE) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $57.2 million, down 5% year-over-year due to divestitures and restructuring, but core business revenue (excluding divested UK holiday parks and restructured pubs) grew 15% year-over-year, driven by 38% growth in Interactive.

• Adjusted EBITDA increased 29% to $23.7 million, with margin expanding to 41% (up 1,100 basis points), reflecting operational efficiency and portfolio optimization.

• Net loss for Q1 2026 was $0.5 million, with adjusted net loss of $0.7 million, mainly due to lower tax benefit and higher interest expense, partially offset by improved operating income.

• Free cash flow reached $15.8 million, enabling $13.3 million in debt reduction and $2.6 million in share repurchases.

• Portfolio optimization included divestiture of the UK holiday parks business and restructuring of the pub business, reducing headcount and capital spending.

Financial highlights

• Adjusted EBITDA margin improved to 41% from 30% year-over-year.

• Net operating income rose to $9.2 million from $1.6 million, driven by lower SG&A and restructuring costs.

• Free cash flow was $15.8 million for the quarter, with conversion at 66.8%.

• Net leverage improved to 3.0x from 3.3x at year-end 2025.

• Weighted average shares outstanding: 29.3 million.

Outlook and guidance

• Management reaffirmed full-year 2026 Adjusted EBITDA target range of $112–$118 million, with margin target raised to up to 45%.

• Sequential Adjusted EBITDA growth anticipated throughout the year, with seasonality reduced post-divestiture.

• 2027 targets: Adjusted EBITDA $125–$135 million, margin 45%+, net leverage 2.0x–2.5x.

• Ongoing remediation of internal controls expected to be completed by year-end 2026.

• Management expects current cash balances, operating cash flow, and borrowing capacity to fund requirements through May 2027.