Selling, general and administrative expenses came in at $84.8m for the year, while depreciation and amortization cost the company a further $52.3m.
The cost of service and cost of product were $30.1m and $14.4m respectively, and acquisition and integration related transaction expenses accounted for a further $7.0m in costs. Stock-based compensation expenses amounted to $4.8m.
As a result, the supplier made a net operating income of $6.4m in 2020, compared to a net operating loss of $13.0m in 2019.
After interest and taxes, Inspired’s net loss for the year was $29.2m, down from $37.0m the year before.
Revenue in the fourth quarter amounted to $71.7m, up 8% year-on-year. Net operating income for the quarter was $19.3m, compared to a $2.1m net operating loss in Q4 2019, and its net income was $12.4m, compared to a $12.8m net loss.
Total company selling, general and administrative expenses decreased by 23% in Q4, to $24.1m. The decrease was driven by staff cost savings of $3.7m due to the furlough scheme, savings on facility costs of $1.0m, and a further $1.0m reduction in professional fees, while travel and expense costs decreased by $700,000.
Depreciation and amortization costs amounted to $12.4m for the quarter, while cost of service and cost of product were $8.3m and $4.5m respectively.
Stock-based compensations expenses came to $1.7m, and acquisition and integration related transaction expenses were $1.4m.
Its fourth quarter revenue includes $32.5m of VAT-related revenue, the result of a backdated VAT tax rebate received from one of its server-based gaming customers as part of its contractual revenue share agreement.
Adjusted EBITDA for Q4 was $34.9m, including $31.7m in VAT-related income.
The company said October saw the continuation of a sequential monthly growth trend from Q3 2020, before venue closures related to the novel coronavirus (Covid-19) pandemic began in November.
By vertical, gaming revenue (related to gaming machines located in betting offices, casinos, gaming halls and high-street adult gaming centres) was $50.5m in Q4.
Virtual sports revenue increased 1.8% to $8.7m, interactive revenue was up 99.5% to $4.2m, and leisure service revenue was $7.7m, down from $21.8m in Q4 2019.
Total company selling, general and administrative expenses decreased by 23% in Q4, to $24.1m. The decrease was driven by staff cost savings of $3.7m due to the furlough scheme, savings on facility costs of $1.0m, and a further $1.0m reduction in professional fees, while travel and expense costs decreased by $700,000.
“October was a stellar month and indicated how quickly we could recover before our land-based businesses went back into lockdown in November and December,” said Lorne Weil, executive chairman of Inspired.
“Our October monthly Revenue of $21.2 million and Adjusted EBITDA of $6.8 million, or 32% of total revenue, was nearly 20% above October 2019 and the highest monthly levels we experienced in 2020, excluding the VAT-related income.”
Weil said that if lockdowns in the UK are eased according to the government’s schedule, the company expects its UK business to return to earning levels seen in Q3 2020, when it generated $17.1m in adjusted EBITDA.
The company said the integration of the Gaming Technology Group, which it acquired in from Novomatic UK Ltd in 2019, had produced synergies which exceeded its previously communicated guidance.