Inspired Gaming Group reported a decline in total revenue for the first quarter of 2024, recording $63.1 million, a 2.8% decrease from the previous year’s $64.9 million.
This downturn primarily stemmed from decreases in its Gaming and Virtual Sports segments, overshadowing growth in other areas.
The Interactive segment, however, showed a robust growth of 37.3%, indicating a continued upward trend from the previous year. Leisure segment revenues also saw a boost, increasing by 8.8% to $18.6 million.
Conversely, Gaming, the company’s primary revenue generator, experienced an 11.4% decline to $24.0 million.
Virtual Sports revenues fell by 16.2% to $12.4 million, reflecting ongoing challenges in these sectors.
Lorne Weil, Inspired’s executive chairman, noted that the results were influenced by persistent trends from the second half of 2023, especially in the Virtual Sports segment.
He pointed out a significant customer optimizing their customer base, which impacted revenues. Moreover, the Gaming segment encountered an unusually challenging quarter.
Weil remains optimistic about the long-term prospects, particularly citing the new NBA Re-Play title launched with OPAP as a growth catalyst.
The company’s land-based gambling operations reflect a similar mixed performance, with Gaming revenues decreasing from $27.1 million to $24.0 million.
In contrast, the Leisure segment showed positive movement, growing from $17.1 million to $18.6 million.
The UK licensed betting office market and operations in Greece were hit by the expiry of historical amortised licensed revenues, which impacted overall service revenues.
Despite these challenges, Weil announced a cost improvement initiative aimed at enhancing the company’s adjusted EBITDA margins by finding efficiencies across the business.
This initiative is part of a broader strategy to shift a greater proportion of earnings to digital businesses, which accounted for 76% of the adjusted EBITDA contribution in the quarter, up from 69% the previous year.
The net loss for the quarter widened to $4.4 million from $3.9 million in 2023, driven by increased spending and finance-related costs.
Despite this, adjusted EBITDA for Q1 fell by 18.9% to $16.3 million from $20.1 million.
Inspired’s leadership is focusing on expanding into new markets and launching new products as key strategies for future growth.
The company also navigated compliance issues with Nasdaq due to delayed financial filings and is taking steps to prevent future occurrences, aiming to maintain robust compliance and governance standards.