Adjusted EBITDA margins at Inspired Entertainment hit a record 46% in the third quarter of 2026, a gain of 900 basis points year over year that the company credits to digital growth and cost discipline.
The B2B technology firm generated adjusted EBITDA of $28.2 million against quarterly revenue of $61 million, with operating income reaching $10.3 million for the period.
A near-breakeven net loss of $0.1 million marked a sharp turnaround from the $1.9 million net loss recorded in the same quarter a year earlier.
Free cash flow for the quarter came in at $17.6 million, while pro forma net leverage fell to 2.9 times, pointing to a healthier balance sheet position heading into the final stretch of the year.
On the headline revenue line, the numbers look starker, with total reported revenue sliding 29% year over year from $86.2 million to $61.4 million.
That decline, however, is almost entirely a product of corporate restructuring rather than trading weakness, driven by the November 2025 sale of the UK Holiday Parks division and changes to the UK Pubs business.
Strip out those portfolio moves and underlying revenue actually rose 4% year over year, even as the company absorbed higher UK Remote Gaming Duty costs seven months into the new tax regime.
In the iGaming segment, revenue climbed 3% year over year as stronger UK volumes helped cushion approximately $2.6 million in incremental gaming duty charges, though Interactive adjusted EBITDA still slipped from $10.7 million to $10.2 million.
President and CEO Brooks Pierce pointed to clarity from the UK Budget as a meaningful positive for the business, stating: “The UK Budget removes a major overhang and gives us and our customers a clearer foundation for investment and planning.”
The Budget confirmed that machine games duty will rise from 20% to 25% in April 2027, a development that resolves the uncertainty around the scale of any increase but introduces a fresh cost challenge for the retail side of the market.
Pierce also highlighted momentum in two key geographies, noting that “Retail Solutions delivered another strong performance in the UK and Greece, with further opportunities to refresh our installed base in Greece next year.”
On the iGaming front, he added that “In Interactive [iGaming], revenue grew 3% year over year as UK volume growth offset the higher gaming tax and our U.S. [operations continued to grow].”
Inspired nonetheless trimmed its full-year 2026 adjusted EBITDA guidance to a range of $109 million to $112 million, absorbing a $3 million hit from the shutdown of its Brazil operations alongside ongoing UK duty pressures.
The company is pursuing growth through expanded digital offerings and is targeting market share gains in North America and Greece to compensate for headwinds in its domestic UK market.
