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Segment Reporting and Geographic Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting and Geographic Information

 

26. Segment Reporting and Geographic Information

 

Operating segments are identified as components of an enterprise for which separate and discrete financial information is available and is used by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief decision-maker is the Office of the Executive Chairman.

 

The Company’s chief decision-maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue and operating profit by reporting unit. This information is used for purposes of allocating resources and evaluating financial performance.

 

The Company operates its business along four operating segments, which are segregated on the basis of revenue stream: Gaming, Virtual Sports, Interactive and Leisure. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

 

The accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies.”

 

 

INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021 AND 2020, AND FOR THE YEARS ENDED

DECEMBER 31, 2021, 2020 AND 2019

 

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss), total assets and total capital expenditures for the years ended December 31, 2021, December 31, 2020 and December 31, 2019, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, right of use assets, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions. All acquisition and integration related transaction expenses are allocated as corporate function costs.

 

Segment Information

 Schedule of Segment Reporting Information By Segment 

Year Ended December 31, 2021

 

                         
   Gaming  

Virtual

Sports

   Interactive   Leisure  

Corporate

Functions

   Total 
   (in millions) 
Revenue:                              
Service  $58.8   $36.0   $22.8   $65.7   $—   $183.3 
Product sales   22.6    —    —    3.0    —    25.6 
Total revenue   81.4    36.0    22.8    68.7    —    208.9 
Cost of sales, excluding depreciation and amortization:                              
Cost of service   (12.8)   (1.9)   (3.7)   (15.9)   —    (34.3)
Cost of product sales   (14.4)   —    —    (2.0)   —    (16.4)
Selling, general and administrative expenses   (28.1)   (7.1)   (6.1)   (35.1)   (20.8)   (97.2)
Stock-based compensation expense   (1.8)   (0.8)   (0.6)   (0.6)   (9.2)   (13.0)
Acquisition and integration related transaction expenses   —    —    —    —    (1.6)   (1.6)
Depreciation and amortization   (22.5)   (3.4)   (3.2)   (16.1)   (1.8)   (47.0)
Segment operating income (loss)   1.8    22.8    9.2    (1.0)   (33.4)   (0.6)
                               
Net operating loss                           $(0.6)
                               
Total assets at December 31, 2021  $100.5   $61.6   $12.3   $85.7   $71.6   $331.7 
                               
Total goodwill at December 31, 2021  $1.4   $47.4   $0.4   $33.5   $—   $82.7 
Total capital expenditures for the year ended December 31, 2021  $10.9   $3.3   $3.7   $8.9   $1.4   $28.2 

 

Year Ended December 31, 2020

 

                         
   Gaming  

Virtual

Sports

   Interactive   Leisure  

Corporate

Functions

   Total 
   (in millions) 
Revenue:                              
Service  $92.2   $32.4   $13.3   $40.8   $—   $178.7 
Product sales   18.3    —    —    2.8    —    21.1 
Total revenue   110.5    32.4    13.3    43.6    —    199.8 
Cost of sales, excluding depreciation and amortization:                              
Cost of service   (15.7)   (2.9)   (1.9)   (9.6)   —    (30.1)
Cost of product sales   (12.4)   —    —    (2.0)   —    (14.4)
Selling, general and administrative expenses   (24.5)   (4.4)   (3.9)   (30.8)   (21.2)   (84.8)
Stock-based compensation expense   (0.8)   (0.4)   (0.3)   (0.1)   (3.2)   (4.8)
Acquisition and integration related transaction expenses   —    —    —    —    (7.0)   (7.0)
Depreciation and amortization   (27.6)   (3.7)   (2.3)   (16.9)   (1.8)   (52.3)
Segment operating income (loss)   29.5    21.0    4.9    (15.8)   (33.2)   6.4 
                               
Net operating income                           $6.4 
                               
Total assets at December 31, 2020  $93.9   $64.4   $8.5   $87.0   $70.3   $324.1 
                               
Total goodwill at December 31, 2020  $1.4   $48.0   $0.4   $33.9   $—   $83.7 
Total capital expenditures for the year ended December 31, 2020  $8.9   $4.8   $2.7   $8.7   $4.9   $30.0 

 

 

INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021 AND 2020, AND FOR THE YEARS ENDED

DECEMBER 31, 2021, 2020 AND 2019

 

Year Ended December 31, 2019

 

                         
   Gaming  

Virtual

Sports

   Interactive   Leisure  

Corporate

Functions

   Total 
   (in millions) 
Revenue:                              
Service  $73.8   $33.4   $4.7   $22.6   $—   $134.5 
Product sales   17.7    —    —    1.2    —    18.9 
Total revenue   91.5    33.4    4.7    23.8    —    153.4 
Cost of sales, excluding depreciation and amortization:                              
Cost of service   (18.1)   (2.6)   (0.7)   (4.0)   —    (25.4)
Cost of product sales   (12.0)   —    —    (0.9)   —    (12.9)
Selling, general and administrative expenses   (29.7)   (6.0)   (4.0)   (12.7)   (18.0)   (70.4)
Stock-based compensation expense   (1.0)   (0.6)   (0.2)   (0.1)   (7.1)   (9.0)
Acquisition and integration related transaction expenses   —    —    —    —    (6.7)   (6.7)
Depreciation and amortization   (30.4)   (2.6)   (2.9)   (3.8)   (2.3)   (42.0)
Segment operating income (loss)   0.3    21.6    (3.1)   2.3    (34.1)   (13.0)
                               
Net operating loss                           $(13.0)
                               
Total capital expenditures for the year ended December 31, 2019  $14.0   $4.5   $1.4   $2.7   $2.6   $25.2 

 

Geographic Information

 

Geographic information for revenue is set forth below:

 

   Year Ended
December 31,
2021		   Year Ended
December 31,
2020		   Year Ended
December 31,
2019		 
   (in millions) 
Total revenue               
UK  $149.1   $152.3   $103.7 
Greece   18.6    17.0    20.7 
Rest of world   41.2    30.5    29.0 
Total  $208.9   $199.8   $153.4 

 

Geographic information of our non-current assets excluding goodwill is set forth below:

 

   December 31,
2021		   December 31,
2020		 
   (in millions) 
UK  $90.0   $101.8 
Greece   11.6    18.2 
Rest of world   21.0    11.4 
Total  $122.6   $131.4 

 

Software development costs are included as attributable to the market in which they are utilized.

 

 

INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021 AND 2020, AND FOR THE YEARS ENDED

DECEMBER 31, 2021, 2020 AND 2019