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Inspired is targeting revenue and profit targets for Q4

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Inspired Entertainment is expecting to report revenues and adjusted EBITDA that are in line with its guidance for the Q4 period, though results may be delayed as a result of a broader review of their accounting policies.

Inspired has not yet released any numbers but stated that it hopes to release its Q4 results in the next few weeks. The group plans to submit its Form 10-K by April 15 or earlier.

The filing is a long way beyond the original time when Inspired was supposed to be reporting its Q4 numbers. It has filed Form 12b-25, a Notification of late Filing with the US Securities and Exchange Commission.

This delay is the result of an extensive review of accounting practices, which took place in Q4. Inspired stated that it had devoted “considerable resources” to this review. As a result, the results were delayed.

The review is related to restatement of financial statements previously released, which also delays its Q3 result. The errors flagged are related to US GAAP and accounting policies that capitalise software development costs.

Nasdaq, incidentally, contacted Inspired mid-Q4 to warn that it was in violation of their rules due to the late filing. Stock exchanges gave Inspired until the 22nd of January to come up with a compliance plan or face having their shares removed.

Nasdaq accepted Inspired’s plan last month, after it was submitted in January. Inspired has avoided further action in the case.

Inspired’s review covered what topics?

Inspired made several mistakes when it announced the first delay in November. The errors were related to how accounting standards applied to certain projects.

Inspire said that financial statements beginning 1 January 2020 contained errors. It said that these financial statements should not be trusted and need to be restated.

Inspired stated that based on its findings there were one or more “material” weaknesses in the internal control of financial reporting. It then committed to make changes in order to remedy these weaknesses, including restating the financial statements of those periods that were under concern.

Investors were reassured that the changes planned would not affect its financial position or business plan.

Inspired Mixed Q3

The delayed Q3 numbers were mixed. The revenue for the quarter ending 30 September 2023 increased by 30,9%, to $97.5m. (PS76.8m/EUR89.9m).

But higher expenditures in several areas resulted in a net loss of only $7.2, a drop of 58.6%. The adjusted EBITDA fell 2.2%, to $26.7m.

In terms of how Inspired’s Q3 has affected the overall year, the revenue for the nine-month period ending 30 September increased 18.0% to $251.8m.

Nevertheless, the spending in nearly all categories increased in this nine-month time period. The net loss was $1.0m for this period, as opposed to the $20.4m profit the year before.

Inspired’s adjusted EBITDA increased by 1.1%, to $74.0m.

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