Executive Narrative
Performance was driven by the 2025 strategic divestiture of the holiday park business and restructuring of the pubs segment to reduce capital and labor intensity.
Management reduced total headcount by approximately 1/3 and lowered annualized capital spending from the mid-$40 million range to the low $30 million range.
Interactive revenue grew 38% year-over-year, serving as the primary growth engine alongside share gains in the retail business across the U.K. and Greece.
The company achieved an 1,100 basis point expansion in EBITDA margin, attributed to the shift toward higher-margin digital businesses and improved retail performance.
Retail growth in Greece was supported by an 11% increase in win per unit following the introduction of the Valor Slant top machine.
Management attributed sustained Interactive growth to superior content development and enhanced account management teams securing prime placements with operators.
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Forward-Looking Commentary
Management expects steady sequential growth in EBITDA starting from Q1 2026 now that the holiday park sale has removed most business seasonality.
An additional internal game development studio is scheduled to come online in the second half of 2026 to increase content output and variety.
The company is targeting strong cash flow conversion and declining leverage, with plans to continue both debt repayment and share repurchases.
Expansion in North America is expected to scale over the next 12 to 18 months, specifically through the Chicago market launch in Q4 2026 and growth in Canadian provinces.
Management anticipates a ‘tipping point’ for Virtual Sports driven by upcoming product releases, the World Cup tailwind, and potential North American lottery partnerships.
Notable Items & Risk Factors
A U.K. Interactive tax rate increase from 21% to 40% took effect April 1, 2025; however, April revenue grew 10% as share gains offset the tax impact.
Virtual Sports performance remains flat as growth in other regions is currently being offset by ongoing headwinds in the key Brazilian market.
The company successfully reduced its leverage to 3x and generated $16 million in free cash flow during the quarter.
Management noted they are monitoring macro and geopolitical issues closely but have not seen a material impact on the top line thus far.
Q&A Highlights
Long-term opportunity and growth expectations for Virtual Sports
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‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source finance.yahoo.com ’
