INSE 10-K & 10-Q changes, risk factors and insider trading

Our business is subject to a high degree of risk. You should carefully read and assess our discussion of the risk factors facing our business, business, below. Any of these risks could materially and adversely affect our business, operating results, financial condition and prospects, and cause the value of our common stock to decline, which could cause investors in our common stock to lose all or part of their investments. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on,assess, and our independent registered public accounting firm is required to attest to, the effectiveness of our internal control over financial reporting. TheCompliance ruleswith governingSection 404 requires thesignificant standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possibleongoing remediation.evaluation Annually, we perform activities that include reviewing, documenting and testingof our internal control overenvironment. financial reporting. In addition, ifIf we fail to maintain the adequacy of oureffective internal control over financial reporting, we will notmay be ableunable to conclude on an ongoing basis that weour havedisclosure effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to achievecontrols and maintainprocedures anare effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.effective.

Management is committed to maintaining a strong internal control environment and is working towards achieving effective controls. Management anticipates that the new controls, as implemented and when tested for a sufficient period of time, will remediate the material weaknesses. We may not be successful in promptly remediating the material weaknesses identified by management, or be able to identify and remediate additional control deficiencies, including material weaknesses, in the future. If not remediated, our failureFailure to establishremediate andexisting maintainmaterial effectiveweaknesses, or the identification disclosureof controlsadditional anddeficiencies proceduresin andfuture internal control over financial reportingperiods, could result in material misstatementsmisstatements, restatements, delays in SEC filings, increased audit costs, regulatory scrutiny or loss of investor confidence. Any such developments could materially and adversely affect our financial statementscondition, andresults aof failureoperations, access to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and as a result, our stockholders could lose confidence in our financial results, which could harm our businesscapital and the market value of our shares.securities.

We have achieved significant cost savings through our centralization of equipment and non-equipment purchases. However, as a result, we are exposed to the credit and other risks of a group of key suppliers. While we make every effort to evaluate our counterparties prior to entering into long-term and other significant procurement contracts, we cannot predict the impact on our suppliers of the current economic environment and other developments in their respective businesses. Insolvency, financial difficulties, supply chain delays or other factors may result in our suppliers not being able to fulfill the terms of their agreements with us. Further, such factors may render suppliers unwilling to extend contracts that provide favorable terms to us, or may force them to seek to renegotiate existing contracts with us. In addition, our business has signed a number of significant contracts whose performance depends upon third party suppliers delivering equipment on schedule for us to meet its contractcontractual commitments. Failure of the suppliers to meet their delivery commitments could result in us being in breach of and subsequently losing those contracts. Although we believe we have alternative sources of supply for the equipment and other supplies used in our business, concentration in the number of our suppliers could lead to delays in the delivery of products or components, and possible resultant breaches of contracts that we have entered into with our customers; increases in the prices we must pay for products or components; problems with product quality or components coming to the end of their life; and other concerns.

Our ability to manufacture and ship machines is critical to our success. We are subject to damage or disruption to supplies of parts or our our manufacturing or distribution capabilities (in particular, to the extent that our parts are sourced globally) due to weather, including including any potential effects of climate change, natural disaster, fire, terrorism, adverse changes in political conditions or political unrest, pandemic, strikes, labor shortages, freight transportation availability, disruption in logistics, import restrictions, or other factors that impair our ability to manufacture or sell our machines. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, adversely affect our business, financial condition, and results of operations, as well as require additional resources to restore our supply chain. To manage this risk, we have partnered with a key supplier to operate from shared locations in both the UK and the US. This relationship has allowed our supplier to store 80% complete clone terminals which can easily be configured, into final products, ready for sale with a significantly reduced delivery lead time. As terminals are completed, the clone terminal inventory is replenished in order to maintain the shortest supply chain possible.

In certain sectors, our businesses also face competition from suppliers, operators or licensees who offer products for internet gaming in illegal or unregulated sectors,sectors but are still able or permitted to supply products and compete with us in regulated sectors. These competitors often have substantially greater financial resources and operating scale than we do.

Generally, customer contracts in our Gaming, Virtual Sports and Interactive business segments are for initial terms of three to five years, but longer in certain territories, with renewals at the customer’s option. Generally, our customer contracts within the Leisure business segment are for terms of four to six years (although in certain cases they are longer), but certain customers have options for early termination under certain circumstances or to reduce machinesmachine volumes in certain circumstances, and we may face pressure to renew or upgrade terminals during the lives of these contracts, which could adversely affect revenue or our return on capital and leave us with surplus terminals. At any given time, we have multiple substantial customer contracts that have years to run and others that may be nearing expiration or renewal, which we may lose if we cannot compete effectively to retain their business.

Our Gaming andand, to a much lesser degree, our Leisure terminal contracts in the UK, Italy and Greece often require significant up-front capital expenditures for terminal assembly, software customization and implementation, systems and equipment installation and telecommunications configuration. Historically, we have funded these up-front costs through cash flows generated from operations and external borrowings. Our ability to continue to procure new contracts, including in new jurisdictions, will depend upon, among other things, our liquidity levels at the time or our ability to obtain additional debt or equity funding at commercially acceptable terms to finance the initial up-front costs. If we do not have adequate liquidity or are unable to obtain other funding for these up-front costs on favorable terms or at all, we may not be able to bid on certain contracts, which could restrict our ability to grow and have an adverse effect on our ability to retain existing contracts and therefore on future profitability. Certain contracts within the Leisure business segment also require injections of capital during the term for new or replacement hardware.

Although we continually take significant steps to mitigate cybersecurity risk across a range of functions, including those measures taken as a direct result of past such cybersecurity incidents, such measures can never eliminate the the risk entirely or provide absolute security, and the Company has experienced and expects to continue to experience attempts at cyberattacks cyberattacks on its information systems. While there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect on the company, there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have a material adverse effect in the future.

We believe that our success depends, in part, on protecting our intellectual property in the UKUK, the US, Brazil, Canada and in other countries.countries in which we operate. Our intellectual property includes certain trademarks relating to our systems, as well as certain patentspatents, copyrights in software and game content, trade secrets, proprietary algorithms and mathematical models, databases proprietary or confidential information that ismay not subjectbe toprotected patentby or similar protection.registration. Our intellectual property protects the integrityintegrity, security and distinctiveness of our games, remote gaming server platforms, systems, products and services, which is aare core value ofto the regulated industries in which we operate. ProtectingThe ourscope and enforceability of intellectual property canrights vary by jurisdiction, and protection may be expensive and time-consuming, may not always be successful depending on local lawslimited or otherunavailable circumstances, and we also may choose not to pursue registrations in certain countries.markets. Competitors Competitorsor third parties may independently develop similar or superior products, game mechanics, software, systemsplatforms or business models, models.which Incould cases where our intellectual property is not protected by an enforceable patent, or other intellectual property protection, such independent development may result in a significant diminution indiminish the value of our intellectual property.property and competitive position.

Data privacyprivacy, cybersecurity and securityartificial laws andintelligence regulations in the jurisdictions in which we do business could increase the cost of our operationscosts and subject expose us to possible sanctions and other penalties.liability.

Our businesses are subject to a number of federal, state, local and foreign laws and regulations governing data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information and other consumer data. In particular, the EU has adopted strict data privacy regulations. Following recent developments such as the European Court of Justice’s 2015 ruling that the transfer of personal data from the EU to the U.S. under the EU/U.S. Safe Harbor was an invalid mechanism of personal data transfer, the adoption of the EU-U.S. Privacy Shield as a replacement for the Safe Harbor (which has since been declared invalid by Schrems II), and coming into effect of the EU’s General Data Protection Regulation, data privacy and security compliance in the EU are increasingly complex and challenging. The scope of data privacy and security regulations continues to evolve, and we believe that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions. Compliance with data privacy and security restrictions could increase the cost of our operations and failure to comply with such restrictions could subject us to criminal and civil sanctions as well as other penalties.

We are subject to the provisions of the UK Bribery Act 2010, the U.S. Foreign Corrupt Practices Act and other anti-corruption laws. The UK Bribery Act generally prohibits giving a financial or other advantage to another person with the intention of inducing that person person to improperly perform a relevant function or activity. The U.S. Foreign Corrupt Practices Act generally prohibits U.S. persons and companies and their agents from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business. Certain of these anti-corruption laws also contain provisions that require accurate record keeping and further require companies to devise and maintain an adequate system of internal accounting controls. Because a significant percentage of our revenue derives from foreign sources, and our business activities involve continuing relationships with governmental regulators, there exists a risk that certain provisions of these anti-corruption laws may be breached. We are also subject to anti-money laundering and anti-terrorist financing laws and regulations, and to economic and trade sanctions programs administered by the Office of Foreign Assets Control (OFAC) in the U.S. relating to our ability to engage in transactions with entities that are domiciled in countries or territories subject to comprehensive OFAC trade sanctions (currently (currently,under extensive sanctions:, Cuba, Iran, North Korea, Syria,Russia, and CrimeaCrimea, Donetsk and Luhansk regions of Ukraine, as well as others under targeted sanctions programs), or that are included on OFAC’s list of Specially Designated Nationals and Blocked Persons. Although we have policies and controls in place that are designed to ensure compliance with these laws laws,and sanctions regimes, if those controls are ineffective or an employee or intermediary fails to comply with the applicable regulations, we may be subject to criminal and civil sanctions as well as other penalties. Any such violation could disrupt our business and adversely affect our reputation, results of operations, cash flows and financial condition.

We review and develop our internal compliance programs in an effort to ensure that we comply with legal requirements imposed in connection with our business activities. The compliance program is run on a day-to-day basis by our in-house legal department with compliance and technical advice provided by our compliance managermanagers and outside professionals. There can be no assurance that such steps will prevent the violation of one or more laws or regulations, or that a violation by us or an employee will not result in the imposition of administrative, civil and even criminal sanctions, monetary fines or suspension or revocation of one or more of our licenses.

In most jurisdictions in which we operate or expect to seek to operate, the level of duty or taxation, the stakes, prizes and return to player percentages of wagering, betting and lottery games and the speed at which players can participate in gaming, or technology certifications are, or may be, defined by government regulations, according to each jurisdiction and remain subject to change. Those regulations may also affect the premises in which gaming activities may take place (i.e., by limiting the number of gaming machines which may be housed in a licensed gaming location, or by restricting the locations in which licensed gaming premises may be situated). Once authorized, such parameters are subject to extensive and evolving governmental regulation. Moreover, such regulatory gaming regulatory requirements vary from jurisdiction to jurisdiction. Therefore, we are subject to a wide range of complex gaming parameters in the jurisdictions in which we are licensed. If a key parameter is changed, such as the level of taxation or duty or the maximum stake or prize or return to player of a game, then it may be to the detriment of our business, financial condition, results and prospects or we may be unable to distribute our products profitably.

Our results of operations can fluctuate due to seasonal trends and other factors. Sales of our gaming machines can vary quarter on quarter due to both supply and demand factors. Player activity for ourthe holiday parks is generally higher in the second and third quarters of the year, particularly during the summer months and slower during the first and fourth quarters of the year. Following the sale of the holiday parks business this will no longer apply in future years.

Geographically, the majority of our revenue is derived from, and the majority of our non-current assets are attributable to, our UK operations. The remainder of our revenue is derived from, and non-current assets attributable to, Greece and the rest of the world (including North America).world.

Revenue (for the twelve-monthstwelve-month period ended December 31, 2024,2025, compared to the twelve-monthstwelve-month period ended December 31, 20232024)

For the twelve-month period ended December 31, 2024,2025, revenue on a functional currency (at constant rate) basis decreased by $33.1$3.1 million, or 10%.1% compared to the twelve-month period ended December 31, 2024.

Cost of sales, excluding depreciation and amortization, for the twelve-month period ended December 31, 2025, compared to the twelve-month period ended December 31, 2024, decreased by $38.6$8.6 million, or 30%. This was9%, driven by a $6.3 million decrease in cost of product as a result of lower product sales, and a decrease in cost of service of $6.7$2.3 million andpredominantly a $31.9 million decrease in cost of product, predominantly driven by the decreasePubs inoperator lowbusiness marginmodel productchange and sales.sale of UK holiday parks business and certain associated leisure assets.

Non-Staff related selling, general and administrative expenses for the twelve-month period ended December 31, 20242025, increaseddecreased by $5.4$2.6 million, or or 12%.5% Thecompared increase inwith the twelve-month period wasended predominantlyDecember 31, 2024, mainly driven by increasesa infavorable realized gain on foreign currency movement, and reductions on facilities and storage andfrom distributioncost ofsaving $1.6 million, IT of $1.1 million, facility costs of $1.0 million, and audit and accountancy costs of $1.1 million.initiatives.

During the twelve-month period ended December 31, 2024,2025, the Company recorded stock-based compensation expenses of $6.7 million, compared to stock-based compensation expenses of $7.6 million,million compared to expenses of $11.2 million, for the twelve-month period ended December 31, 2023.2024. All expenses related to outstanding awards, but the twelve-months ended December 31, 2023, included $0.4 million of shares that fully vested on the date of grant.awards.

OtherDepreciation selling, general and administrative expensesamortization for the twelve-month period ended December 31, 20242025, increased by $8.5$6.5 million,million orcompared 89%. The increase into the twelve-month period ended December 31, 2024. This was predominantly driven primarily by thean costsincrease in Gaming of the$6.2 restatementmillion ofmainly previously issued financial statements and costs relatingrelated to restructuringgaming costs.machine additions.

During the twelve-month period ended December 31, 2024,2025, net operating income was $30.7$30.5 million, aan decrease of $8.8$0.4 million,million compared to the priortwelve-month yearperiod period.ended December 31, 2024. This decrease was primarilypredominantly drivendue byto thehigher increaseservice inrevenue, non-stafflower relatedcost selling,of general and administrative expenses, depreciation and amortization, along with other selling general and administrative expenses, partiallysales, offset by anloss increaseon insale gross marginof and reduction in stock-based compensation.business.

Net (Loss)/Income

For the twelve-month period ended December 31, 2024,2025, net incomeloss was $64.8$17.0 million, compared to net income of $6.9$64.8 million in the priortwelve-month yearperiod period.ended December 31, 2024. The increasedecrease was primarily driven by an increase of income tax incomeexpense of $67.3$74.1 million, due toas the twelve-month period ended December 31, 2024, included a reversal of the majority of the company’s valuation allowance on its deferred tax assets, assets, partially offset by the decrease in net operating income and increases in interest expense and income tax expense.

Revenue is derived from the performance of the installed base as described by the Gross and Net Win KPIs.

During the twelve-month period ended December 31, 2024,2025, Gaming revenue decreased by $34.0$2.2 million, or 24%.2% compared to the twelve-month period ended December 31, 2024. This was driven by a $6.9 million decrease in Service revenue and $27.1$13.5 million decrease in Product revenue, partially offset by an increase of $11.3 million increase in Service revenue.

During the twelve-month period ended December 31, 20242025, revenue decreased by $12.0$9.9 million, or 21%22% compared to the twelve-month period ended December 31, 2024, primarily driven by regulation in the Brazilian market, introduction of new levies and lower revenue from a major customer optimizing itskey customer base.customer.

Virtual Sports net operating income

During the twelve-month period ended December 31, 2024,2025, net operating income decreased by $14.5$11.9 million.million Thesecompared declinesto werethe twelve-month period ended December 31, 2024, primarily due to the decreasedecreases in gross margin of $12.3 million, an increase in non-staff related selling, generalrevenues and administrative expenses of $0.2 million predominantly driven by higher external consultant and recruitment costs, and an increaseincreases in depreciation and amortization of $2.2 million$2.0 for increased software development and intangible assets.million.

We generate revenue from our Interactive segment through various gaming content made available via third-party aggregation platforms integrated integrated with our remote gaming server or directly on the Company’s remote gaming server platform, and services such as customer customer support, platform maintenance, updates and upgrades. Typically, we receive fees on a participation basis. Our participation participation contracts are usually structured to pay us a percentage of net win (defined as net revenue to our operator customers, after deducting player winnings, free bets or plays and other promotional costs and any relevant local gaming taxes and/or regulatory levies) from Interactive content placed on our customers’ websites. Typically, we recognize revenue from these arrangements on a daily basis over the term of the contract.

“No. of Games available at the end of the period” and “Average No. of Games available” represents the number of games that are available for operators to deploy at the end of the period (including inactive legacy games still available inand inactive new games that are available but have not yet gone live with any operators) and the average number of games that are available for operators to deploy during the period, respectively. This incorporated live games and inactive games.

During the twelve-month period ended December 31, 20242025, revenue increased by $10.6$17.3 million, or 38%,44% compared to the twelve-month period ended December 31, 2024, primarily driven by recurring revenue growth in the UK, North America and mainland Europe due to the launch of new content across the estate and increased promotional activity through exclusive deals with tier-one customers.Europe.

Interactive net operating income

OperatingNet operating income for the twelve-month period ended December 31, 20242025, increased by $8.6$13.8 million.million, Thisor increase70% wascompared to the twelve-month period ended December 31, 2024, driven by the increase in gross margin,revenue, partially offset by increases in staffcost of service of $1.2 million and Staff-related and Non-staff related selling, general and administrative expenses of $0.3$3.3 million driven by annual salary increases and additional headcount, non-staff related selling, general and administrative expenses of $0.3 million predominantly due to increased IT network costs supporting revenues, and depreciation and amortization of $1.7 million for increased software development and intangible assets.million.

We make forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. For definitions of the term “forward-lookingForward-Looking statements”,Statements, see the definitions provided in the “Cautionary Note Regarding Forward-Looking Forward-Looking Statements” at the forepartfront part of this report.

For the three-monthsthree- and six-month periods ended MarchJune 31,30, 2026, we derived approximately 60%57% and 59% of our revenue from the UK (including customers headquartered in the UK but whose revenue is generated globally), respectively 10% and 9% from USA respectively; 11% and 11% from Greece, respectively; and the remaining 29%22% and 21% across the rest of the world. ForDuring the three-monthsthree- and six-month periods ended MarchJune 31,30, 2025, we derived approximately 65%72% ofand our revenue69% from the UKUK, respectively; 5% (including customers headquartered in theboth UK but whose revenue is generated globallyperiods), 10% from Greece,USA; 8% and 9% from Greece respectively; and the remaining 25%15% and 17% across the rest of the world.

As of MarchJune 31,30, 2026, our non-current assets (excluding goodwill) were attributable as follows: 70%71% to the UK, 17%16% to Greece and 13% across the rest of the world. As of MarchJune 31,30, 2025, our non-current assets (excluding goodwill) were attributable as follows: 74%73% to the UK, 11%13% to Greece and 15%14% across the rest of the world.

Our results are affected by changes in foreign currency exchange rates as a result of the translation of foreign functional currencies into our reporting currency and the re-measurement of foreign currency transactions and balances. The impact of foreign currency exchange rate fluctuations represents the difference between current rates and prior-period rates applied to current activity. The geographic region in which the largest portion of our business is operated is the UKUK, and the British pound (“GBP”) is considered to be our functional currency. Our reporting currency is the U.S. dollar (“USD”). Our results are translated from our functional currency of GBP into the reporting currency of USD using average rates for profit and loss transactions and applicable spot rates for period-end balances. The effect of translating our functional currency into our reporting currency, as well as translating the results of foreign subsidiaries that have a different functional currency into our functional currency, is reported separately in Accumulated Other Comprehensive Income.

During the three-monthsthree- and six-month periods ended MarchJune 31,30, 2026, we derived approximately 40%43% and 41% respectively of our revenue from sales to customers outside the UK,UK (see discussion above), compared to 35% 28% and 31% respectively during the threethree- monthsand six-month periods ended June March 31,30, 2025.

In the section “Results of Operations” below, currency impacts shown have been calculated as the current-period average GBP:USD rate less the equivalent average rate in the prior year period, multiplied by the current period amount in our functional currency (GBP). The remaining difference, referred to as functional currency at constant rate, is calculated as the difference in our functional currency, multiplied by the prior-period average GBP:USD rate. This is not a U.S. GAAP measuremeasure, but is one which management believes givesprovides a cleareruseful indication of results. In the tables below, variances in particular line items from period to period exclude currency translation movements, and currency translation impacts are shown independently.

Our results of operations can fluctuate due to seasonal trends and other factors. Sales of our gaming machinesterminals can vary quarter onto quarter due to both supply and demand factors.

Our results are affected by changes in foreign currency exchange rates, primarily between our functional currency (GBP) and our reporting reporting currency (USD). During the three-month periodperiods ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, the average GBP:USD rates were 1.351.34 and 1.26,1.34, respectively, and rates for the six-month periods ended June 30, 2026 and June 30, 2025 were 1.34 and 1.30, respectively.

In the discussion and analysis below, certain data may vary from the amounts presented in our condensed consolidated financial statements due to rounding.

Three and Six Months Endedended MarchJune 31,30, 2026, compared to Three and Six Months Endedended MarchJune 31,30, 2025

Revenue (for the Three-Monthsthree Endedand Marchsix 31,months ended June 30, 2026, compared to the Three-Monthsthree Endedand Marchsix 31,months ended June 30, 2025)

For the three-month period ended MarchJune 31,30, 2026, revenueTotal Revenue on a functional currency (at constant rate) basis decreased by $6.8 million,$19.8 million or 11% 25% compared to the three-month period ended MarchJune 31,30, 2025 and for the six-month period ended June 30, 2026, total revenue on a functional currency basis decreased by $26.4 million or 19% compared to the six-month period ended June 30, 2025.

For the three-month period ended June 30, 2026 compared to the three-month period ended MarchJune 31, 2026, compared to the three-month period ended March 31,30, 2025, Retail Solutions revenue declined by $9.8$21.5 million, predominantly due to a decrease in service revenuerevenue, of $10.1primarily million, mainly due toreflecting the sale of the UK holiday parks business and certain associated leisure assets,assets in November 2025, and the pub operator model change. This was partially offset by product sales increase of $0.3 million (reflecting the variable nature of terminal sales). Virtual Sports revenue declined by $0.6$0.4 million, due to a decrease in online revenue, while Interactive revenue grew by $3.5$2.0 millionmillion, due to growth in the UK, mainland Europe and North American markets. UK growth was partially offset by higher UK remote gaming taxes.

Cost of sales, excluding depreciation and amortization, for the three-month periodthree- and six-month periods ended MarchJune 31,30, 2026, decreased by $12.9 million and $20.0 million, or 51% and 46%, respectively, compared to the three-monththree- periodand six-month periods ended MarchJune 31,30, 2025,2025. decreasedThe bydecreases $7.2 million, or 40%,were predominantly driven by a $6.8$12.4 million and $19.1 million decrease in cost of service, mainlyrespectively, primarily due to the sale of the UK holiday parks business and certain leisure assets and the pub operator business model restructuring,change, as well as a $0.5 million and a $0.4$0.9 million decrease in cost of product, respectively, attributable to the same restructuring activity.

Staff-relatedStaff related selling, general and administrative expenses

Staff-relatedStaff related selling, general and administrative expenses for the three-month periodthree- and six-month periods ended MarchJune 31,30, 2026,2026 decreased by $3.4$4.0 million, and $7.5 million, or 22%21% and 22%, respectively compared to the three-monththrees periodand six-month periods ended MarchJune 31,30, 2025,2025. This was predominantly related to the sale of the UK holiday parks business and certain associated leisure assets.

Non-Staff relatedThe selling,decrease general and administrative expenses forin the three-month period ended MarchJune 31,30, 2026 decreased by $0.9 million, or 7%2026, compared with to the three-month period ended MarchJune 31,30, 2025, was mainly driven by lower facility costs of $1.0 million, fleet costs of $0.8 million, facility costs of $0.6$0.9 million (both related to the sale of the UK holiday parks business and certain leisure assets and the pub operator business model restructuring restructuring activity), professional fees of $0.4 million and storage costs of $0.3 million partially offset by higher professional fees of $0.8 million.

During the three-monththree- periodand six-month periods ended MarchJune 31,30, 2026, and March 31, 2025, the Company recorded expenses of $1.4$1.6 million.million and $3.0 million, respectively, compared to expenses of $1.8 million and $3.2 million for the three- and six-month periods ended June 30, 2025. All expenses related to outstanding awards.

Depreciation and amortization for the three-month period ended March 31,June 2026,30, increased2026 decreased by $1.1$0.9 million,million compared to the three-month period ended June 30, 2025, mainly driven by a decrease in Retail Solutions of $1.3 million due to the sale of the UK holiday parks business and certain leisure assets and pub operator business model, partially offset by increases in Virtual Sports of $0.7 million and Interactive of $0.2 $0.3 million for increased software development and intangible assets.

Other selling, general and administrative expenses for the three-monththree- periodand six-month periods ended MarchJune 31,30, 20262026, decreased by $4.3$2.3 million and $6.7 million, or 90%68% and 82%, respectively compared with the three- withand six-month periods ended June 30, 2025. The decrease in the three-month period ended MarchJune 31,30, 2025,2026, compared to the three-month period ended June 30, 2025 was primarily driven by the timing of costs relating to the restatement of previously issued financial statements and expense relating to restructuring costsrefinancing during the three-month period ended MarchJune 31,30, 2025. The decrease in the six-month period ended June 30, 2026, compared to the period ended June 30, 2025, was driven by costs relating to the restructure of previously issued financial statements not repeated, expenses relating to restructuring costs, and costs relating to refinancing during the six-month period ended June 30, 2025.

DuringThe increase in the three-month period ended MarchJune 31,30, 2026, net operating incomecompared was $9.2 million, an increase of $7.2 million, compared to the three-month period ended MarchJune 31,30, 2025. This2025, was predominantly due to a lower staff and non-staff related selling, general and administrative expenses (due to sale of the UK holiday parks business and certain leisure assets), and timing of costs relating to the restatement of previously issued financial statementsrefinancing during the three-month period ended MarchJune 31, 30, 2025.

Net Income / (Loss)

For the three-month period ended MarchJune 31,30, 2026, net lossincome was $0.5 million,$0.2 million compared to a net loss of $0.1$7.8 million in the three-month period ended March 31, 2025. The increase in net loss wasmillion, primarily driven bydue to a decrease of income tax benefit expense of $4.3$8.3 million (the effective tax rate in any given year is influenced by a variety of factors including the level of pre-tax income or loss, the income mix between jurisdictions, and any discrete items that may occur), and higher interest expense of $2.8 million, partially offset by the increase of net operating income of $7.2$1.9 million, partially offset by higher interest expense of $2.4 million.

Segment Results (for the Three-Monthsthree Endedand Marchsix 31,months ended June 30, 2026, compared to the Three-Monthsthree Endedand Marchsix 31,months ended June 30, 2025)

We generate revenue from our Retail Solutions segment through the delivery of our gaming terminals preloaded with proprietary gaming software, server-based content, as well as services such as terminal repairs, maintenance, software updatesupgrades and upgrades on a when and if available basis and content development. We receive rental fees for machines, typically in conjunction with long-term contracts, on both a participation and fixed fee basis. Our participation contracts are typically structured to pay us a percentage of net win (defined as net revenue to our operator customers, after deducting player winnings, free bets or plays and any relevant regulatory levies) from gaming terminals placed in our customers’ facilities. Typically, we recognize revenue from these arrangements on a daily basis over the term of the contract.

“End of Period Installed Base” represent the number of gaming machines installed (excluding Holiday Park machines) that are Category Category B and Category C only (UK Gambling Act 2005 places machines into categories dependent on maximum stake and prize available), This is equal to the number of deployed Retail Solutions terminals at the end of each period that have been placed on a participation or fixed rental basis. Retail Solutions participation revenue, which comprises the majority of Retail Solutions Service service revenue, is directly related to the participation terminal installed base. This is the medium by which our customers generate revenue and distributepay a revenue share to the Company. To the extent all other KPIs and certain other factors remain constant, the larger the installed base, the higher the Company’s revenue would be for a given period. Management gives careful consideration to this KPI in terms of driving growth across the segment. This does not include Service Only terminals.

“Customer Gross Win per unit per day” is a KPI used by our management to (i) assess impact on the Company’s revenue, (ii) determine changes in the performance of the overall market and (iii) evaluate the impact of regulatory change and our new content releases on our customers. Customer Gross Win per unit per day is the average per unit cash generated across all Retail SolutionsGaming terminals in which the Company takes a participation revenue share across all territories in the period, defined as the difference between the amounts staked less winnings to players divided by the Average Installed Base in the period, then divided by the number of days in the period.

“Inspired Fixed Rental Revenue per Retail SolutionsGaming Machine per week” is the Company’s average fixed rental amount across all fixed rental terminals where revenue is generated on a fixed fee basis, per unit per week.

“Total Retail Solutions Recurring Revenue” is equal to Retail SolutionsGaming Participation Revenue plus Retail SolutionsGaming Other Fixed Fee Recurring Revenue.

All variances discussed in the Retail Solutions results below are on a functional currency (at a constant rate) basis, which excludes the impact impact of any changes in foreign currency exchange rates.

Net income for the three-month period ended MarchJune 31,30, 2026, increaseddecreased by $2.5$1.1 millionmillion, compared to the three-month period ended MarchJune 31,30, 2025.2025, and The increasenet wasincome primarilyfor duethe six-month period ended June 30, 2026, increased by $1.6 million, compared to a reduction in staff-related selling, general and administrative expenses of $3.4 million and non-staff related selling, general and administrative expenses of $2.2 million, partially offset by the reductionsix-month inperiod Serviceended salesJune 30, Gross2025, Margin,primarily driven by the sales of the UK holiday parks business and certain associated leisure assets, and the pub operator businessmodel model restructuring.

We generate revenue from our Virtual Sports segment through the our on-premise licensing solution and hostingprovision of our products.products to customers for deployment both on-premise in licensed gaming venues and online through customers’ websites and mobile applications across multiple regulated jurisdiction. We primarily receive fees on a participation basis. Our participation contracts are typically structured to pay us a percentage of net win (defined as net revenue to our operator customers, after deducting player winnings, free bets or plays and other promotional costs and any relevant regulatory leviesapplicable gaming taxes) from Virtual Sports content placed on our customers’ websites or in our customers’ facilities. Typically, we recognize revenue from these arrangements on a daily basis over the term of the contract.

Revenue growth for our Virtual Sports segment is principally driven by the number of customers we have, the number of jurisdictions across which they operate, the net win performance of the games and the net win percentage that we receive pursuant to our contracts with our customers.

During the three-monththree- periodand six-month periods ended MarchJune 31,30, 2026, revenue decreased by $0.6$0.4 million and $1.0 million, or 7%4% and 6%, respectively compared to the three-monththree- periodand six-month periods ended MarchJune 30, 2025 31, 2025, primarily driven by lower revenue from a key customer.customer, partially offset by increased revenue from other customers.

During the three-month period ended MarchJune 31,30, 2026, net operating income decreased by $1.3$0.7 million compared to the three-month period Marchended June 31,30, 2025. This decline was2025, primarily due to the decrease in gross margin of $0.5 million, and an increase in depreciation and amortization of $0.7 million forand increaseda softwaredecrease developmentin gross margin of $0.2 million, partially offset by a reduction in non-staff related selling, general and intangibleadministrative assets.expenses of $0.4 million.