Inspired’s Q4 EBITDA margin reached a company record of 42%, helping full‑year 2025 EBITDA hit $111 million (+11% YoY) as the business shifts toward a more digital, CapEx‑light model with >80% recurring revenue.
The transformation is being driven by the Interactive segment, which grew Q4 revenue and EBITDA by 53% and 60% respectively, added studio capacity and new game extensions (e.g., “Wolf It Up” and Hybrid Dealer), and expanded distribution with customers like Flutter and upcoming integrations with DraftKings and Betfred.
Management reiterated 2026 EBITDA guidance of $112–$118M (midpoint $115M) and expects full‑year margin in the mid‑40s while targeting net leverage of 2.5–3.0x by end‑2026; following the Holiday Parks divestiture the company will report gaming and remaining leisure together as Retail Solutions.
Inspired Entertainment (NASDAQ:INSE) executives told investors the company’s fourth quarter marked a “milestone” in its ongoing shift toward a more digital, higher-margin, and less capital-intensive business, led by rapid growth in its Interactive segment. Management also introduced updated reporting changes following the divestiture of its Holiday Parks business and reiterated 2026 EBITDA guidance of $112 million to $118 million.
Executive Chairman Lorne Weil said the company’s full-year 2025 EBITDA was $111 million, up 11% over 2024, with an EBITDA margin of 37% of revenue. He added that results were “a little ahead of consensus in both revenue and EBITDA.”
Weil highlighted that the company’s fourth-quarter EBITDA margin reached 42%, which he described as a record for any single quarter in Inspired’s history. He tied the margin expansion to a business mix that is becoming “more and more digital,” strong growth in Interactive, and the disposal of the lower-margin Holiday Parks unit.
Management reiterated that more than 80% of revenue is recurring, and said it expects to keep pushing the business toward a “CapEx-light” model, aided by a reduced headcount discussed on the prior quarter’s call.
Weil said the transformation has been led by Interactive, which grew revenue and EBITDA by 53% and 60%, respectively, in the fourth quarter. President and CEO Brooks Pierce said Interactive has now delivered 10 straight quarters of more than 40% EBITDA growth and “shows no sign of slowing down.” He cited recent operating momentum, including the “single highest day” and “single highest weekend” of GGR for the segment in late February, followed by what he called the best week ever “based on this morning’s results.”
Pierce said Inspired is expanding brands and game mechanics and is adding studio capacity expected to come online in the second half of the year, increasing the output of titles. He also emphasized that the company’s iGaming performance is supported by an installed base of titles, with games produced before 2022 continuing to generate a consistent revenue foundation as new games layer on top.
In discussion of proprietary game families, Pierce pointed to brands such as “Wolf It Up” as enabling faster and more cost-efficient extensions. He also said Inspired is building its Hybrid Dealer portfolio and is preparing to launch “Wolf It Up Roulette,” noting Hybrid Dealer turnover was up 51% quarter-over-quarter and customers live increased 39%. He added that Inspired had gone live with Flutter brands including Paddy Power and Betfair in the UK, and expected to add DraftKings and Betfred in the next quarter.
On Virtual Sports, Pierce said the company successfully launched with BetMGM as its first “tier one” North American customer fully integrated in the sportsbook section of the site, with three sports live in New Jersey, including an NFL-licensed game. He said the company hopes to expand to additional states and views the launch as a proof point for other operators ahead of the World Cup.
In Q&A, Pierce addressed why Virtual Sports revenue did not grow year-over-year in the fourth quarter as previously expected. He said the first quarter had shown “a little bit of softening in the Brazil market,” which management attributed to seasonality and a lag ahead of the World Cup. He said the Bet Builder product launched with OPAP showed “modest” growth and that expectations should be for a high single-digit increase. Pierce added that the company was comfortable with the margin expansion seen in the fourth quarter, while noting that sustained performance would depend on getting revenue moving “the way that we’d like to see it go.”
Management also discussed preparations for an upcoming UK tax change, saying operators are expected to adjust RTP and bonusing structures. Pierce said Inspired felt “better” about its assessment of the tax impact after discussions with customers and expected to mitigate early disruption once changes take effect in April. Later, he clarified that the tax should not affect Inspired’s margins directly because its revenue is a percentage of customers’ GGR, though it could affect the revenue base if customer GGR declines.
Pierce said the company remains focused on renewing contracts with key customers and highlighted long-term relationships with operators including bet365 and Entain. In response to questions about UK retail dynamics and shop closures, Pierce said some locations being exited by larger operators could be taken over by independent operators that are also Inspired customers, allowing machines to be redeployed.
He also described optimism for North American distributed gaming machine sales, pointing to recent changes in Illinois that expand gaming into Chicago. Pierce said the company is “indexing at our highest levels” since entering that market and cited relationships with customers including J&J and Accel. He said Inspired believes it can grow its Illinois footprint substantially over the next 12 to 18 months and sees the potential for the Illinois model to be replicated in other states.
Weil reiterated 2026 EBITDA guidance of $112 million to $118 million, with the midpoint of $115 million representing low double-digit growth over 2025 excluding the Holiday Parks divestiture. He said the company expects full-year margin to move “squarely into the mid-40s,” and added that management is comfortable that momentum can continue into 2027. Weil said the digital business accounted for 51% of EBITDA in 2025 and projected it would rise to more than 60%, while EBITDA margin expands to 45%+.
On leverage, Weil said net leverage ended 2025 at 3.3 and management is targeting 2.5–3.0 times net leverage by the end of 2026, with a potential step-down in interest rate and additional financing options as leverage declines.
Weil also announced a reporting change: with Holiday Parks divested, the company will combine its gaming and remaining leisure businesses into a single reporting entity called Retail Solutions. Management said this better reflects the business models and management structure and could generate operating synergies.
While lottery was not a major focus of prepared remarks, Weil discussed the recently launched cloud-based lottery platform, “Strata,” in the Q&A. He said Inspired developed the system over roughly two and a half years “from scratch,” designed for integrated retail and online operation. Weil said it is running in the Dominican Republic in a lottery with about 2,500 retailers, generating “a few million” dollars per year in revenue, and described strong market reaction.
Weil said the near-term focus is outside the United States, with expansion targeted across the Caribbean, Latin America, and likely Europe, and noted that any potential upside from lottery is not included in the guidance the company provided.
In closing remarks, Weil said management views the fourth quarter as an important marker in the company’s evolution and believes the trajectory will continue into the first quarter of 2026 and through the year.
Inspired Entertainment, Inc (NASDAQ: INSE) is a business-to-business provider of digital gaming content and technology solutions for the global gaming industry. The company’s offerings include server-based gaming modules, virtual sports simulations, digital interactive content and mobile sports betting platforms. Inspired designs proprietary games and software that integrate with lotteries, casino operators, retail betting shops and online platforms, emphasizing reliable performance, rapid deployment and engaging player experiences.
At the core of Inspired’s product suite is its Virtual Sports catalog, which simulates sporting events using advanced algorithms and randomized outcomes.
