The Top 5 Analyst Questions From Inspired’s Q1 Earnings Call

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Inspired’s first quarter results received a positive response from the market despite missing Wall Street’s revenue expectations, as the company posted a year-over-year sales decline. Management attributed the top-line softness to the timing of the U.K. Easter holiday, delayed product sales, and regulatory disruptions in Brazil. Executive Chairman Lorne Weil emphasized the strong underlying progress, particularly highlighting continued growth in the company’s Interactive segment and improvements in operating margin. Brooks Pierce, President and COO, noted, “Momentum is carrying over into the second quarter, with our Interactive business seeing rapid growth, especially in North America.”

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Inspired (INSE) Q1 CY2025 Highlights:

  • Revenue: $60.4 million vs analyst estimates of $67.11 million (3% year-on-year decline, 10% miss)
  • Adjusted EPS: $0.13 vs analyst estimates of -$0.16 (significant beat)
  • Adjusted EBITDA: $18.4 million vs analyst estimates of $19.4 million (30.5% margin, 5.2% miss)
  • Operating Margin: 2.6%, up from -3.4% in the same quarter last year
  • Market Capitalization: $214 million

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Inspired’s Q1 Earnings Call

  • Barry Jonas (Truist Securities) asked about the impact of U.S. tariffs on costs and consumer behavior. President and COO Brooks Pierce said tariffs are not expected to materially affect the business, given the company’s limited exposure in Illinois and potential opportunities in Canada.

  • Ryan Sigdahl (Craig-Hallum Capital Group) questioned the sequential decline in Virtual Sports and whether stabilization trends were reliable. Pierce explained that while the first quarter saw volatility due to Brazilian regulatory changes, recent weeks have shown clear signs of stabilization.

  • Ryan Sigdahl (Craig-Hallum Capital Group) also asked about debt refinancing terms. Executive Chairman Lorne Weil detailed the new floating rate structure and flexibility, noting the expected benefits as deleveraging progresses through asset sales.

  • Jordan Bender (Citizens) inquired about the company’s renewed focus on deleveraging. Weil confirmed that both the new debt structure and planned asset sales incentivize faster deleveraging, with digital businesses driving higher margins.

  • Chad Beynon (Macquarie) sought clarity on retail and digital trends outside North America. Pierce described mixed retail conditions in Europe but emphasized ongoing digital growth and share gains in the U.K. iGaming market.

Catalysts in Upcoming Quarters

In coming quarters, our team will be closely monitoring (1) the pace of Hybrid Dealer adoption and its impact on digital revenue mix, (2) progress on the sale of the holiday park business and the resulting deleveraging, and (3) signs of sustained stabilization and growth in the Virtual Sports segment, particularly in Brazil and the North American lottery channel. Execution on new product launches and asset-light transitions will also be key indicators of future performance.

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