INSE

Inspired's operating business is healthier than the headline net loss suggests. FY2025 revenue of $304M grew 2.4% and operating income held at $30.5M (a 10.0% operating margin), while operating cash flow jumped 64% to $52.0M. Against $35.7M of capex that is still roughly $16M of free cash flow, and EBITDA is meaningfully higher once you add back $52.4M of D&A. On EV/EBITDA and a 0.7x price-to-sales, the equity is priced like a distressed asset, not a business throwing off cash. That valuation is the core of the bull case.

The problem sits below the operating line and on the balance sheet. Long-term debt rose 18.1% to $345M, and the interest cost of servicing it turned a $30.5M operating profit into a -$17.0M net loss and -$0.58 diluted EPS — a 126% swing from FY2024. Note that the FY2024 comparison ($64.8M net income) was flattered by items tied to the divested holiday-parks business the MD&A references, so the prior-year 'profit' is not a clean baseline; but the FY2025 loss is real and structural, driven by leverage, not a one-off. Stockholders' equity is negative (-$16.2M) with a -$459M accumulated deficit, so book value offers no downside cushion.