INSPIRED REPORTS 3RD QUARTER 2022 RESULTS.

NEW YORK: Inspired Entertainment, Inc. ("Inspired" or the "Company") (NASDAQ: INSE), a leading B2B provider of gaming content, technology, hardware and services, today reported unaudited financial results for the three-month period ended September 30, 2022. Third quarter underlying results reflect growth in the Company's aggregate online business, which includes the Virtual Sports and Interactive segments, and ongoing strength in the Gaming and Leisure segments. Total Revenue and Adjusted EBITDA improved year-over-year in functional currency, however, reported results reflect significant strengthening of the USD (versus GBP) on a year-over-year basis.

Total Revenue of $74.9 million for the three months ended September 30, 2022, compared to $77.6 million for the three months ended September 30, 2021, declined 3% on a reported basis4 and increased 13% on a functional currency basis, which is an indicator of the strength of the underlying operating results.

Virtual Sports Revenue of a record $14.6 million increased 39% year-over-year on a reported basis (63% on a functional currency basis). Online Virtual Sports Revenue more than doubled year-over-year on a functional currency basis. Interactive Revenue of $5.7 million decreased 6% year-over-year on a reported basis (increased 10% on a functional currency basis), with growth in business volumes primarily driven by the U.S. and Canada. October Interactive revenue increased 14% year-over-year on a functional currency basis, as more operators and game titles launch in Pennsylvania.

Gaming Revenue of $24.1 million decreased 12% year-over-year on a reported basis (increased 3% on a functional currency basis) and Leisure Revenue of $30.5 million decreased 9% year-over-year on a reported basis (increased 6% on a functional currency basis). Momentum in the Gaming and Leisure businesses continues as significant UK contracts/extensions were signed with Betfred, Marston's, Butlins and Bourne Leisure subsequent to the end of the quarter.

Net Income of $10.2 million, or $0.39 per basic share and $0.35 per diluted share, compared to $25.0 million, or $1.10 per basic share and $0.30 per diluted share, in the prior-year period, which included a $17.3 million gain in fair value of warrant liability for the Company's warrants, which expired in December 2021. Excluding the gain in fair value of warrant liability, third quarter 2021 Net Income would have been $7.7 million, or $0.34 per basic share and $0.30 per diluted share.

Adjusted EBITDA of $27.8 million decreased 8% year-over-year on a reported basis (increased 7% on a functional currency basis). The Company's aggregate Online business, which includes Virtual Sports and Interactive, contributed 50% of Adjusted EBITDA versus 36% in the prior-year period. Adjusted EBITDA Margin in third quarter 2022 was 37% compared to 39% in third quarter 2021. Significant inflationary cost pressure and supply chain impact in the Holiday Parks business, which peaks in the third quarter, more than accounted for the margin decline.

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1 "Adjusted EBITDA" and "Adjusted EBITDA Margin" are non-GAAP financial measures defined below under "Non-GAAP Financial Measures" and reconciled to the most directly comparable GAAP measures in the accompanying supplemental table. Adjusted EBITDA Margin is calculated as a percent of Revenue.

2 Aggregate online business Adjusted EBITDA contribution is calculated using the sum of the Virtual...