GET DAILY SIGNALSInspired Entertainment (INSE) Delivers Record Margins Despite -28.8% Revenue Decline
Key Takeaways
- Total revenue fell 28.8% year over year to $61.4 million, missing analyst consensus of roughly $64.5 million, largely because of completed divestitures.
- Adjusted earnings per share (EPS) came in at $0.10, well above the consensus estimate of $0.01.
- Adjusted EBITDA reached $28.2 million with a record 46% margin, up from 37% a year earlier.
- Management lowered its full-year 2026 Adjusted EBITDA guidance to $109 million to $112 million, down from $112 million to $118 million.
- The suspension of regulated online gaming in Brazil and upcoming U.K. gaming tax increases are the main headwinds shaping the outlook.
Understanding the Earnings and Their Significance
Inspired Entertainment supplies content, platforms, hardware, and services to regulated lottery, betting, and gaming operators worldwide. Its third-quarter results highlight an ongoing strategic shift toward a higher-margin, less capital-intensive, and more digital business model. The sharp year-over-year revenue decline stems mainly from the November 2025 sale of its U.K. Holiday Parks business and a restructuring of its Pubs operations, rather than any broad slowdown in core operations. From what I see, the report matters because it tests whether margin expansion and digital growth can offset portfolio changes, a Brazilian regulatory shutdown, and rising U.K. gaming taxes. I also checked this using Tickeron’s AI Screener to compare the stock against peers in the sector.
Breaking Down the Reported Results
For the third quarter of fiscal 2026, Inspired Entertainment reported total revenue of $61.4 million, down 28.8% from $86.2 million in the prior-year period and below the consensus estimate of approximately $64.5 million. Excluding the divestitures, like-for-like revenue rose about 4%, and roughly 9% when further adjusting for the higher U.K. remote gaming duty. The company posted a net loss of $0.1 million, or $0.00 per share, while adjusted net income was $2.8 million, or $0.10 per diluted share, beating the consensus estimate of $0.01. I reviewed the segment details through INSE’s latest filings to confirm the underlying trends.
Adjusted EBITDA was $28.2 million, down 13% year over year but up 4% sequentially, representing a record 46% Adjusted EBITDA margin. By segment, Retail Solutions revenue fell 39% to $37.4 million on divestitures, Virtual Sports revenue declined 9% to $8.5 million, and Interactive revenue edged up 3% to $15.5 million as U.K. volume growth and U.S. gains offset the higher gaming tax. The company lowered its full-year 2026 Adjusted EBITDA outlook to a range of $109 million to $112 million, primarily reflecting the suspension of regulated online gaming in Brazil, a market representing about 5% of total revenue.
How the Market Reacted
Shares of INSE declined after the report, with the stock falling roughly 4% to about $3.35 in immediate post-earnings trading. The mixed results drove the reaction: the adjusted EPS beat and record margin were offset by the revenue miss and the reduction in full-year guidance. Investors also weighed the impact of Brazil’s shutdown of regulated online betting and gaming and the U.K. Budget’s planned increase in machine games duty from 20% to 25% beginning in April 2027. Sentiment remains cautious given the company’s exposure to a small number of regulated markets where policy shifts can quickly alter near-term earnings power.
Looking Ahead: Factors Worth Monitoring
Looking ahead, several factors will shape how investors evaluate Inspired Entertainment’s trajectory. Guidance implications remain central. Management has effectively pushed its growth targets out by roughly a year, assuming the Brazil shutdown remains in effect, and now expects 2027 growth to be only modest compared with 2026. Free cash flow conversion, previously targeted near 20% for 2026, is also expected to be slightly lower because of Brazil’s impact.
Cost and margin trends will be closely watched. The company has demonstrated meaningful operating leverage, reaching record Adjusted EBITDA margins, and continued progress on this front could help offset revenue headwinds. Investors will monitor whether the digital business, which carries the highest margins and cash flow contribution, sustains its momentum.
Finally, regulatory and market dynamics remain key. The U.K. gaming tax increase, potential clarity on the expansion of video lottery terminals in Illinois, new U.S. iGaming states, and the company’s early moves into Alberta, Canada, all represent catalysts or risks that could influence demand and profitability. Deleveraging and possible refinancing of its credit facility are additional balance-sheet factors to monitor.
Using AI Tools in My Research Process
I’ve found Tickeron’s AI Screener helpful when evaluating stocks like INSE alongside peers. It lets me quickly filter for technical patterns, fundamentals, and performance metrics to cross-check my own analysis. In this case, it highlighted similar margin trends across the gaming technology space, which reinforced my view on the company’s transformation progress.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
INSE's RSI Oscillator ascending out of oversold territory
The RSI Indicator for INSE moved out of oversold territory on October 22, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 41 similar instances when the indicator left oversold territory. In 33 of the 41 cases the stock moved higher. This puts the odds of a move higher at 80%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 28, 2026. You may want to consider a long position or call options on INSE as a result. In 68 of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 77%.
The Moving Average Convergence Divergence (MACD) for INSE just turned positive on October 07, 2026. Looking at past instances where INSE's MACD turned positive, the stock continued to rise in 30 of 43 cases over the following month. The odds of a continued upward trend are 70%.
Following a +8.11% 3-day Advance, the price is estimated to grow further. Considering data from situations where INSE advanced for three days, in 221 of 302 cases, the price rose further within the following month. The odds of a continued upward trend are 73%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where INSE declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 82%.
INSE broke above its upper Bollinger Band on November 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for INSE entered a downward trend on November 03, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 6 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: INSE's P/B Ratio (-5.914) is slightly lower than the industry average of (3.685). P/E Ratio (-10.938) is within average values for comparable stocks, (0.328). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (0.476). Dividend Yield (0.000) settles around the average of (0.012) among similar stocks. P/S Ratio (0.508) is also within normal values, averaging (1.692).
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 65 (best 1 - 100 worst), indicating steady price growth. INSE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 100 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. INSE’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 99, placing this stock worse than average.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a developer of mobile gaming and betting software
Industry CasinosGaming
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