Inspired Entertainment, Inc.

Good morning, everyone, and welcome to the Inspired Entertainment fourth quarter and full year 2025 conference call. All participant lines have been placed on mute to prevent any background noise. After the speaker's remarks, we will open the call for a question and answer session. Please note that today's event is being recorded. Before we begin, please refer to the company's forward-looking statements that appear in the fourth quarter 2025 earnings press release and in the accompanying slide presentation. both of which are available in the investor section of the company's website at www.inseinc.com. These also apply to today's conference call. Management will be making forward-looking statements within the meeting of the United States Securities Laws. These statements are based on the management's current expectations and beliefs and are subject to various risks, uncertainties, and other factors that may cause actual results that differ materially from those expressed or implied in such statements. For discussion of these risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. During today's call, the company will discuss both GAAP and non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in today's earnings release and slide presentation, which are both available on the website. With that, I would now like to turn the call over to Lorne Wheel, the company executive chairman. Mr. Wheel, please go ahead.

Thank You operator good morning everyone and thank you for participating in our year-end conference call as it happens Brooks and I are doing this call from the major lottery conference in Florida where there is a lot of buzz about the things we have going on in the lottery space including the amazing cloud-based lottery platform we launched a few weeks ago that you may have read about in a recent press release We won't have much more to say about lottery today in our prepared remarks, but we're happy to elaborate in the Q&A, and we certainly expect to be talking more about it in the coming quarters. That said, I'll begin the call today with a few introductory remarks, considering the fourth quarter of the full year, and then hand it over to Brooks to discuss the quarter in detail. Beginning with slide three, I think we can look at the quarter as an important milestone in the steady transformation that's been occurring in the company. As we've discussed previously, hopefully not ad nauseum, the transformation continues to be led by the interactive business, which grew revenue in EBITDA by 53% and 60% respectively in the fourth quarter. In a moment, Brooks will discuss the nature of the tremendous resilience we have built into this business, together with the steps we're taking to ensure that at the same time we continue to drive growth. These kinds of growth rates were mildly interesting a few years ago when we were growing off a base of a couple of million dollars, but on a base upwards of $50 million at present, it's a whole other story, obviously. In our last conference call, we talked about targeting to get our company-wide EBITDA margin into the mid-40s. Our margin for the full year 2025 was 37%, but in the fourth quarter it reached 42%, a record for any single quarter in our company's history. As noted in the slide, we're comfortable with 2026 EBITDA guidance of 112 million to 118 million, with the midpoint of 115 million representing low double-digit growth over 2025. if we exclude the divestment holiday part even off. This would put our full year company-wide margin squarely into the mid-40s. And as I'll touch on at the end of the program, we're comfortable that this momentum for the company as a whole will continue through into 2027. While the interactive business follows its growth trajectory, our equipment businesses are continuing to move in an asset-like direction. And these together are positively impacting free cash flow. As noted in the slide, we expect to be deleveraging through 2026, targeting to be a two and a half to three times net leverage by year end. This will lead in turn to a step down in our interest rate and perhaps other financing options as well. And on that note, I'll turn things over to Brooks.

Okay, thanks, Lorne. So moving to slide four, we're gratified to see the results in the fourth quarter justify the key premise that we've been discussing over the course of the year, that is that the combination of the mix of our business becoming more and more digital, and particularly with the strong growth in our interactive segment, and also the disposal of the lower margin holiday parks business, both the combination of that would drive our EBITDA margins over 40% and our fourth quarter results strongly validate that thesis. Moving to slide five. So this slide visually depicts the progress we've made in our mix and its impact on our EBITDA margins, but it goes beyond that. We've made a conscious decision to focus on CapEx light business. Combining this with our significantly reduced headcount discussed last quarter will prove to materially improve the cash flow of the business on a going forward basis. We expect these trends to continue throughout 2026, and we're targeting EBITDA margins in the mid-40s with significant improvement in cash flow. Moving to slide six. It's important as well to note that our focus is not solely on improving the EBITDA margins and cash flow, but also in growing each of the segments of the business. More than 80% of our revenue is recurring, so along with growth, we need to continue to renew contracts with our key customers, and we are very proud of the long-term relationships we've had with customers like Bet365 and Entane and the faith they put in us to continue to innovate our products and enhance player engagement. I've discussed on previous calls the importance I place on getting access to the North American market for our virtual business and having the product fully integrated in the sportsbook section of the site rather than in the casino section. I'm excited to announce the successful launch with BetMGM as our first tier one customer to have launched with three sports, including our NFL license game, now live in New Jersey and hopefully going live in additional states in the near term. We've had success with BetMGM in Ontario and have worked with their team on this development. I believe this will be the start of utilizing some of the key licenses we have with the NFL, the NBA, and the NHL and getting broader distribution in the North American market. We're in discussions with several other sports betting operators, but BetMGM has the market to themselves for now. Getting this launched in time for the World Cup is ideal, and we believe this will provide a good proof point for other operators. Moving on to slide seven. So we've now had 10 quarters in a row of more than 40% EBITDA growth in our interactive segment. and that shows no sign of slowing down. We just had the single highest day and the single highest weekend of GGR in this segment over the last weekend in February. I'm also happy to announce just based on this morning's results that we had the best week we've ever had last week. We're laser focused on keeping this performance going and are expanding our brands, our unique game mechanics, and adding studio capacity that will come online in the second half of the year and increase the output of titles to support this high growth segment. Alongside this organic growth, we have several opportunities to expand our footprint geographically and we still believe that it's a matter of when and not if that additional states will legalize iGaming in their states as we've seen with Maine and progress in other larger states like we're seeing in Virginia. Although it's difficult to forecast when this will happen and which states will add this capability, We do believe that it's an underappreciated potential step change for Inspired. The sub-side is not limited to interactive either as we are excited to see the growth potential for our North American gaming machine sales with recent changes in Illinois to expand into Chicago. We're now indexing at our highest levels since we went into the market and have strong relationships with key customers like J&J and Accel. We're confident that we'll grow our footprint over the next 12 to 18 months in Illinois substantially, and believe that the Illinois model can be replicated in other states. Distributed gaming is in our DNA. It's where content is the key differentiator, and that's what we do best. Moving on to slide eight. We prepared slide eight just to show that our iGaming performance isn't driven by just recent momentum or one-hit wonders. This graph shows how our games produced even earlier than 2022 continue to generate a consistent base of revenue year over year. Each year's new games simply build on top of that foundation. So we're not starting from zero every year. We continue to grow and sustain that growth by building on brands and game families that resonate with players as well as unique game mechanics. The key is to continue to innovate and add capacity on top of that foundation. And moving on to slide nine, our proprietary game titles and mechanics create multiple important advantages. Firstly, they build strong brand recognition and loyalty with players. Players know and trust brands like Wolf It Up, which allows us to do multiple iterations and extensions faster and more cost efficiently. We're using this to expand our hybrid dealer portfolio as well and are looking forward to the release of our Wolf It Up roulette game to build on the momentum we're seeing in hybrid dealer, where turnover is up 51% quarter over quarter and 39% increase in customers live. We just went live yesterday with the Flutter brands, like Paddy Power and Betfair in the UK, and we'll be adding both DraftKings and Betfred in the next quarter. These proprietary brands strengthen our relationships with our operator customers. When they know our game families and mechanics will consistently perform well, they place the games in the most desirable positions on their sites and keep them there longer. This benefits everyone in the ecosystem and creates opportunities for us to do creative commercial arrangements with key operators for exclusivity and promotions. A true win-win for all. Moving on to slide 10. As noted in the past few slides and then on slide 10, this is really all about building a scalable and sustainable interactive business. Typically, adding more gains comes at the expense of revenue per title, but as the portfolio grows, performance per gain often declines, but that's not the case with our interactive portfolio. We've been able to expand the number of gains while also increasing revenue per title. That's why we've been able to deliver the kind of growth that you've seen in the segment improving overall digital mix for Inspired and ultimately higher EBITDA margins. And of course, that's why we're adding another high quality studio to our network. Moving on to slide 10. So whether it's interactive, whether it's virtuals or gaming machines, we've consistently stated that content drives everything we do at Inspired. Our recent success in the rollout of the Vantage cabinet to the William Hill estate and our improvement and leading position in Greece which we've maintained for years now, is a testament to not only the content, but also leveraging our industrial design to build high performing cabinets at a fraction of the cost that you would see for a class three casino floor in North America. And we're proving that we can replicate our success in the UK and Greece further in North America with our performance in Illinois, as well as our continuing share gain in key PLC markets in Canada. And moving to slide 12. Finally, slide 12 gives some of the latest data on the size and scale of iGaming compared to sports betting, TGR. In states where they go head-to-head with sports betting, iGaming is more than three times the size of sports betting. Extrapolating that to other states is a big off-size opportunity for us that we don't include in our forecast but believe that it is inevitable and would be transformative for Inspired as the flow-through margins and cash contribution would be very significant. So with that, I'll hand it back over to Lorne.

Thanks, Brooks. That was a terrific deep dive. Before I move into a discussion of guidance, let's take a minute to recap where we ended 2025 on slide 13. Our EBITDA was $111 million, a little ahead of consensus in both revenue and EBITDA, 11% up over 2024. with an EBITDA margin of 37% of revenue. Our digital business account for 51% of EBITDA and leverage was 3.3. Turning now to slide 14, we see 2026 and 2027 evolving as shown. As mentioned earlier, we're projecting 2026 EBITDA at the midpoint to be low double digits ahead of 2025, excluding the divested Holiday Park EBITDA. And from midpoint to midpoint, this growth rate should continue comfortably through 2027. At the same time, we're projecting that our digital business will grow from 51% of EBITDA to more than 60%. EBITDA margins will expand to 45% plus, and the leverage to be 2.5%, approaching 2%. Finally, with reference to slide 15, I'd like to announce at this time a change in the way we will be reporting going forward, which we think simplifies our story and much more accurately reflects the operating characteristics of the businesses. As we have explained before, our leisure segment until very recently comprised two very different businesses, a server-based machine business focused on pubs, motorway service, bingo halls, etc., whose business model is very similar in nature to what we've been calling gaming. And the recently divested holiday parks business, that was predominantly an amusement machine business with a very different business model. Now that we have divested holiday parks, we'll be combining gaming and the remaining leisure businesses into one reporting entity to be called Retail Solutions. We think this will reflect our current management structure and make the company more easily understood, as well as generate some interesting operating synergies. Now looking at slide 16, finally let's touch on our investment thesis, which is very simple and which is being pretty well validated at this time. The swing in the business makes the higher growth, higher margin, less capital intensity is having the intended result. Revenue is overwhelmingly recurring in nature and growing. EBITDA margins in the 40s are moving higher. Capital expenditure is showing meaningful decline despite growing revenue in EBITDA and steady declines in leverage and interest expense. And at this point, operator, we're happy to turn the program over to Q&A.

Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you wish to withdraw your question, simply press star 1 again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your headset and ensure that your phone is not on mute when asking your question. And again, to join the queue, it is star 1. Your first question comes from the line of Chad Baynon of Macquarie. Your line is open.

Hi, good morning. Thanks for all the additional commentary in the deck and the guidance, guys. Just want to start with UK. I know last quarter you talked about how well you navigated the triennial review a couple years ago. It doesn't appear that any of your partners have really made any changes ahead of the upcoming tax change, but just wondering how that's factored into your guidance, maybe your discussions with them, and if you expect any mitigation either by you guys or your partners when that's rolled out. Thank you.

Yeah. Hi, Chad. Yeah, I think we are seeing that. I mean, if you go down the laundry list of customers in the UK, many of them are going to adjust their RTP to reflect the increase in taxes, and I think they're also going to adjust their bonusing structures, and how they bonus players because of that. I think, frankly, with the conversations we've had with them and the target that we've said in terms of what we think the impact of taxes, we feel better about that now than we did even before just because now the operators are certainly going forward and implementing their plans. So we'll know here in a few weeks. once it goes in April. And I suspect there'll be some impact in the beginning like there always is, but we expect to be able to mitigate that. And we're comfortable with the impact as we've talked about in the last quarter.

Great. Thanks, Brooks. And then in terms of the capital allocation strategy across the entire digital sector globally, we've just seen some valuations come down, I think, mainly because of the threat of prediction markets. And it might give you guys an interesting opportunity to either repurchase stock or execute on that bolt-on acquisition that we had talked about in the past on conference calls. Wanted to get your update on that, Lauren and Brooks, how you kind of see the market at these valuations. Thank you.

Sure. Chad, it's actually a complicated and multifaceted question. Let me comment for a second first on the root of your question, which is about the prediction market. I mean, we know right now the overwhelming majority of prediction market handle is on sports. I think for Kalshi, it's upwards of 90%. You know, there's a lot of talk about people betting on, you know, the fall of the regime in Iran and, you know, when some famous Hollywood actress is going to get pregnant. But the fact is, it's almost entirely about sports. And what you're seeing in terms of valuations is whether it makes sense or not, it's pretty much focused on people whose business is primarily in the sports business. So, you know, we're not only completely insulated from that, but there's actually an interesting case to be made that it will accelerate the growth in iGaming and in iGaming states because of the impact on state revenues of the swing and the sports betting handle from the sports betting operators to the prediction markets. You know, we'll have to see how that plays out, but it would be an interesting irony that we would actually benefit from the prediction markets. In terms of The second part of the question, which is the impact on valuation. Yeah, for sure. I mean, you know, at our current valuations, you know, even though, as I said a number of times before, for a variety of reasons, strategically, we're probably more focused on deleveraging than we are on share repurchase, but at a certain point in valuations, it's too ridiculous to not do everything we can to take advantage of that opportunity. And since we have a pretty good buyback plan in place and we have significant headroom in our credit agreements to buy back stock, I think it's safe to say that we'll be putting stock valuation in proper perspective in our asset allocation, at least for the present time, Chad.

Thanks, Lauren. Appreciate it. Good luck.

Your next question comes from the line of Jordan Bender of Citizens. Your line is open.

Hi, everyone. Good morning. Thanks for the question. If I compare your targets that you gave a couple months ago to what you have in the deck today, the 27 targets even adjusting for the UK taxes appears to be better than what you had put out previously. You kind of went through the prepared remarks and talked through the digital business and the positive momentum you're seeing there. Can you just kind of help us unpack, you know, what you're seeing, if I'm reading this correctly, that your expectations may be lifted from what you were seeing before. Thank you.

Yeah, I mean, I think, I guess to answer your question is, and I'm not sure exactly what the reference is to 27. I know Lauren just mentioned it in the remarks, but we're not seeing anything that would tell us that the momentum is not going to continue. As I mentioned in my remarks, because I just happened to get them this morning, the last week we had was the best week we've ever had. So we're seeing the momentum continue certainly in the interactive business. And we have a number of drivers in the virtual sports business thing, in the digital space, that we think are just about to come upon us. Obviously, the North American launch, Certainly we've got some opportunities in Brazil that we are pretty excited about. The World Cup is coming up here in the next couple months. So we don't see anything on the horizon that tells us anything other than this momentum is going to continue.

Okay, yeah, and that was in reference to your EBITDA targets in 27, but that answered that. Thank you. And then just on the follow-up and the press release, you kind of talked about your iGaming market share in the U.S. improving quarter-on-quarter and the results that led to. Can you just kind of talk to what you're seeing there from a customer perspective and I guess also a spend perspective from those customers? Thank you.

Yeah, I mean, I think we're having kind of an interesting dynamic going on with what's called the big three customers, DraftKings, FanDuel, and BetMGM. You know, we talked a little bit about the game mechanics and some titles that we have using this thing that we call cash bank. So it's kind of morphed into each one of the big three have kind of taken under their wings an individual brand. DraftKings is really strong with Wolf It Up. FanDuel is really strong with this new Kong game. And so what's happening is the big three are continuing to grow for us from a share perspective, and we're getting better placement, etc., etc., But we're also doing extremely well with companies like, you know, Rush Street and Fanatics and so on and so forth. So it really is, it's kind of across the whole board, but I think probably the biggest driver in terms of the share gain is our gain with the top three operators.

Understood. Thank you very much.

Thanks, Jordan.

Your next question comes from the line of Ryan Sigdoe.

of craig hallam your line is open hey good morning guys um i want to stay on the uk you mentioned kind of from a tax increase on the digital side and and strategies changing curious if you've heard anything from a retail standpoint if if any of your key customers are planning to shift promotions marketing etc back to the retail side just given uh the balance between online and retail

Yeah, I mean, I think they look at it holistically, as we've talked about before, kind of a whole ecosystem. But I think it's pretty clear that from a margin standpoint, that they would be benefiting with some of this business moving to retail from online. But certainly the sense that we get from the operator customers is that they're trying to mitigate the online tax thing as much as possible. But obviously, you know, the more business that flows through the retail channel is certainly better for them from a margin perspective. It's interesting, you know, one of the things we've talked about is the, you know, some of the shop closures with William Hill. And one of the questions people ask, well, you know, what do you do with those machines that are going to be coming out of the shops? And Ryan, as you know, we've talked a lot about, you know, the shop closures are generally on the long end of the tail, so they're the least performing shops. But ironically, a number of these shops are being secured by other independent operators that are also customers of ours. So we've had the ability to be able to take the machines that would be coming out of the William Hill shops And either somebody else, another operator will buy the shop themselves or they're expanding on their own and we'll move the machines into that part of the business. So I think, you know, obviously nobody likes to hear anything about shop closures, but I think ironically at the end of the day, we might actually be better served with the reconfiguration, you know, across the portfolio of LBL companies in the UK with some of the lower performing shops going to other operators.

And then virtual sports. Last quarter, you expected growth year over year from a revenue standpoint. Q4, that didn't happen. I'm curious, you know, what changed first year expectations, but you did see very nice margin expansion. So I guess, is that sustainable? What happened on the top line? What happened on EBITDA? And should we expect kind of that higher level of EBITDA margin to be sustainable going forward? And then maybe last point on virtual sports, just the bet builder product. I know it's very, very early. and OPAP launched it, but curious if you can quantify any kind of uplift, what you've seen there, and then how you plan to, if you do, accelerate that pipeline ahead of the World Cup. Thanks.

Yeah, I mean, we're certainly racing to answer your second question first. We're racing to get everybody, you know, we announced the contract extensions with Bet365 and Intane, both of which are, you know, very big customers. of ours, and we've got long-term extensions with them. So we've secured our future, I think, in the virtual sports business on a going forward basis. And the BetBuilder product has shown modest growth in OPAP, and I don't think there should be an expectation that this is going to be anything more than a high single-digit increase. And to be perfectly honest, in the first quarter, we've seen a little bit of softening in the Brazil market in virtual sports, which we think is probably a little bit of the seasonality and a little bit of a lag pre-World Cup. In virtual sports, we've got a lot of things going on in that space that we hope will be able to drive the top-line revenue. But I think we are comfortable with the margin expansion that you saw in the fourth quarter, but obviously a big part of that is can we get the revenue going in the way that we'd like to see it go. So kind of a little bit of a mixed bag so far that we've seen in the first part of the first quarter, but we'll obviously be reporting on that here coming up in the not too distant future.

Thanks, Brooks. Good luck, guys.

Thank you. Your next question comes from the line of Barry Jonas of Truce Securities. Your line is open.

Hey, guys. I wanted to start with the Iran conflict. You know, I think a lot of investors are wondering how we should be thinking about any potential impact to your business, specifically maybe talk about any historical sensitivity to higher oil and gas prices. Thank you.

Well, You know, over the course of the few years that we've been in this business and the many, many years that we've been in this industry and other companies, we've had a number of crazy gyrations in the energy market. And I don't think, at least in my personal experience, Barry. I've seen much of an impact of that on our business. I mean, I suppose if the price of oil were to go up high enough, long enough, that it impacted, you know, players' disposable incomes, that that might show itself up in our business. But I don't I haven't seen much evidence of that in the past, and at least right now, it's not something that we're focused on. There is sort of some issue, I suppose, in some businesses of supply chain disruption associated with this, let's call it situation, since The president's not calling out a war. But our supply chains are in terrific shape right now. We had this thing with memory chip shortage, but we fixed that. So I think right now I'm cautiously optimistic that we're pretty well insulated from this. You know, it's a crazy volatile world and anything is possible.

Great. And then just, you know, Lorne, you teased it in the opening remarks, so I'll bite. Can you maybe talk more about the Strata lottery platform? You know, I think you've been working on this for a while, right, since the SporeTech acquisition. So we'd love to get your thoughts on the market opportunity and maybe potential timelines, given how lengthy RFP processes are usually.

Sure. Thank you. So, yeah, so we spent... Probably two and a half years developing this We developed it completely from scratch With a complete clean sheet of paper and you know, we've done this I Think the first lottery system I personally was involved in developing was back in the 70s when I was working with a company who put in the very first digital lottery system in the world and And then we did it again very, very successfully at Scientific Games, and now we've just done it yet again. It seems like a life sentence. But we assembled probably the best team of developers in the lottery industry. The system is completely cloud-based. It was designed to be integrated retail and online, and it's running flawlessly in a very, very commercially successful lottery in North America with about 2,500 retailers. This system can be scaled to go to 25 million retailers if we ever had to. So we've had a very, very significant reaction to it in the market. I think probably our focus in terms of the market opportunity for it is going to be outside the United States, at least for the first few years. These are customers and markets, again, going back to our scientific games days that we're very familiar with. And the architecture of the system and the functionality of the system is, let's say, is geared to those kinds of markets. So I wouldn't right now want to try to predict what we'll begin to see. I mean, we're getting significant revenues you know, a few million dollars a year from the system right now in the Dominican Republic. But as we begin to expand that throughout the Caribbean, Latin America, and probably Europe, certainly over the course of the next couple of years, we should start to see significant revenue. And again, that's something that's not factored at all into the the guidance that we gave earlier.

Yeah, and Barry, just add maybe one more point. I think that's, you know, as Lauren said, our focus over the next couple years is primarily outside the U.S., and that's generally a sales market as opposed to, you know, a recurring revenue market. So we certainly have had a number of people that are interested when they've seen the results of what we've done in the DR. You know, we're going to start building a pipeline, hopefully, of opportunities that we'll be able to talk about, you know, coming up. But it's not like bidding for, you know, a big U.S. state. That's a completely different kind of business.

Perfect. Thank you so much.

And our last question comes from the line of Josh Nichols of B. Reilly Securities. Your line is open.

Yeah, thanks for taking my question. Great to see a very strong quarter yet again for the interactive business. I was just curious, when you look at the north of 50% growth that you're seeing here, what's your expectations in terms of sustainability when you kind of look at the pipeline for 26, 27 to maintain that type of pace of growth? I know the UK tax

increase may have some impact on margin but i'm just curious like where you think the trajectory for that type of growth rate is likely to level out over the next 12 months or so yeah that one's that one is hard to say i think if you had asked me several years ago if we would have more you know 10 quarters in a row more than 40 percent even thought growth in this segment would we have predicted that i'd say no um you know every time i look at the numbers keep wondering if you know we're going to start hitting a wall and that doesn't seem to be the case certainly through as of this morning um i i think in the uk in particular and you've probably seen it um i know entain and their results talked about this a lot um is i think the stronger both operators and suppliers are going to tend to thrive in this environment so i would You know, we're more than 10% share in the UK and I fully expect, even with the tax situation, that we'll be increasing our share because there's going to be some, you know, providers that just don't have enough scale to be able to make it. So all I can say is we're not seeing any indications of slowing yet, but certainly mathematically, you know, it's not possible to sustain this forever. But we're seeing nothing that would lead us to believe that it's going to slow down anytime soon, both in North America and in the UK. And don't forget, we're also adding, we've talked about this, we're adding additional geographies. We're going into South Africa and we'll go into another couple of geographies. So our hope is that if there's any softening in the two biggest markets, that we can fill that gap with new geographies to just continue to keep this going.

Just one other point on that, Josh. You mentioned the impact of the tax on margins, but just to be clear, the way the tax works, it actually shouldn't have any effect on our margins because our revenue is a percent of our customer's GGR, so certainly the increase in the tax would have the effect of reducing our customers' GGR, but our margin on the revenue that we get from that customer shouldn't have any impact at all. Obviously, it'll impact the revenue, but not the margin.

Yeah, thanks for clarifying. On that front, I think just one more follow-up. I mean, a pretty big shift you go into, very asset-light model here. The headcount is already down pretty significantly, and we're expecting to see CapEx step down as well, too. I know it looks like there was some outsized CapEx in 4Q, but is everything now on a more normalized asset-light digital-focused basis going forward as we start with 1Q of 26, or is there a little bit more work to be done to get to some of those targets that you kind of laid out for 26 and 27?

No, I think the targets are solid. The composition is going to be slightly different because one of the things that we're doing from a CapEx perspective, we've talked a lot about this morning about the Dominican Republic lottery. So we've replaced the system and now we're in the process over the next couple of years of replacing the terminals down there because this is a long-term contract. So I think the total amount of CapEx is going to be as we've laid out for everyone. I think the composition will be slightly differently because there'll be some investment over the next two years in lottery terminals. And then going out to year three and four, we would hope to have a step down even further other than potential expansion opportunities. So I think the model, Eric or Amy can jump in if they feel or if they have anything else, but I think what we've laid out for you guys from a CapEx perspective we feel very good about.

Yeah, the only thing I'll add to that, this is Eric, Josh, is when you look at our reporting, the CapEx will include sort of all our gross CapEx. In our presentation on slide 14, we have a cash CapEx number, which we footnoted. It excludes any purchases of PP&E that are customer funded, effectively where we receive the cash upfront. So if you look at it through that perspective, 2025 is about $44 million, as opposed to, I think the number is upwards of 55, 56 million, just from our financial statements. So just wanted to make sure you understood that caveat, and we can chat later offline if not.

I think I'm good. I'm right around, I'd say, I think the 46 number. Appreciate it. Thanks, Bob.

That concludes our Q&A session. I'll now turn the conference back over to Mr. Wheel, Executive Chairman, for closing remarks.

Thanks, Operator. And I don't really have much more to add to what we said already. As I said in my remarks earlier, I think the fourth quarter was a very important milestone in terms of the transformation or the evolution that we're going through. We feel pretty good that it will continue in that direction into the first quarter of 2026 and through 2026. So thank you for your support, and we'll look forward to speaking to you again in a few months. Thanks.

This concludes today's conference call. You may now disconnect.