Inspired Entertainment (INSE) Q3 2026 Earnings Call: Marge erreicht 46 %, Prognose gesenkt

Wichtigste Erkenntnisse

• In Q3 2026 erreichte die EBITDA-Marge 46 %, was einem Anstieg von 900 Basispunkten im Jahresvergleich und von 1.100 Basispunkten gegenüber 35 % in Q2 2025 entspricht.
• Bereinigt um Veräußerungen, Restrukturierungen, die Erhöhung der britischen Remote Gaming Duty und die Schließung in Brasilien stieg das EBITDA der letzten zwölf Monate über neun Monate hinweg um 12 % bzw. annualisiert um rund 15 %.
• Der Free Cashflow seit Jahresbeginn belief sich auf 17,6 Millionen US-Dollar, was einer EBITDA-Konversion von rund 22 % entspricht.
• Das EBITDA des Segments Interactive stieg vor Berücksichtigung der britischen Steuereffekte um 20 %. Die Bruttospielerträge in den USA legten in Q3 im Jahresvergleich um mehr als 30 % zu, während Italien seit Jahresbeginn um mehr als 50 % wuchs.
• Die Unternehmensführung senkte das untere Ende der Gesamtjahresprognose aufgrund der Schließung in Brasilien auf 109 Millionen US-Dollar und geht konservativ davon aus, dass der Markt geschlossen bleibt.
• Der vorrangig besicherte Netto-Verschuldungsgrad lag zum Ende von Q3 bei rund 2,8x und damit unter der Covenant-Grenze von 5,0x, bei einem Covenant-EBITDA-Puffer von mehr als 46 Millionen US-Dollar.

Wichtige Finanzkennzahlen

Geschäftliche und operative Entwicklung

Interactive blieb der wichtigste Wachstumstreiber, obwohl sich die britische Remote Gaming Duty zum 1. April 2026 verdoppelte. Der Oktober war der historisch stärkste Monat des Segments. Die US-Bruttospielerträge (GGR) stiegen in Q3 im Jahresvergleich um mehr als 30 % und entwickelten sich damit dynamischer als in den anderen Hauptmärkten des Unternehmens, während Italien mit einem Wachstum von über 50 % seit Jahresbeginn der am schnellsten wachsende Markt war.

Inspired Entertainment gab bekannt, dass sein Marktanteil im britischen Interactive-Segment bei über 11 % liegt. Das Unternehmen plant eine Expansion durch maßgeschneiderte Titel, Ableger etablierter Spielfamilien und Produkte für Spielersegmente, in denen das eigene Portfolio unterrepräsentiert ist. Das erste Spiel von Bee Reel befindet sich in der aufsichtsrechtlichen Prüfung, und das Management erwartet, dass das Studio nach Erreichen der vollen Betriebsfähigkeit rund ein zusätzliches Spiel pro Monat produzieren wird.

Die Leistung der Spielautomaten verbesserte sich bei den drei größten Wettbüro-Kunden des Unternehmens im Vereinigten Königreich, da sich Schließungen auf weniger profitable Standorte konzentrierten und sich das Spielgeschehen auf die verbleibenden Filialen verlagerte. In Griechenland trieb das Slant-Gehäuse die Automatenleistung auf den höchsten Stand seit Jahren. Nahezu ein Drittel des griechischen Bestands benötigt noch Gehäuse-Upgrades.

In Nordamerika verbesserte sich die Automatenleistung in Illinois und Kanada. Inspired startete kürzlich einen Testbetrieb in Manitoba, seiner dritten kanadischen Provinz, und erhielt seinen ersten Auftrag im Zusammenhang mit der VLT-Expansion nach Chicago.

Virtual Sports startete bei FanDuel und erschloss über Massachusetts einen vierten US-Lotteriemarkt. FanDuel ging mit fünf Sportarten an den Start, verglichen mit dreien, die derzeit über BetMGM angeboten werden. Zudem plant das Unternehmen für 2027 weitere eInstant-iLottery-Veröffentlichungen und stößt über Gaming Arts in den US-amerikanischen Class-III-Markt vor.

Das Unternehmen verringert seine Abhängigkeit vom Vereinigten Königreich weiter. Der Anteil der Umsätze außerhalb Großbritanniens am Gesamtumsatz hat sich seit 2023 verdoppelt, gestützt durch das Wachstum in Nordamerika und Griechenland.

Prognose des Managements

Das Management senkte das untere Ende der Gesamtjahresprognose aufgrund der Schließung in Brasilien auf 109 Millionen US-Dollar. Die Planungsannahme geht davon aus, dass Brasilien geschlossen bleibt, wenngleich das Management bis Ende 2026 oder im ersten Quartal 2027 mehr regulatorische Klarheit erwartet.

Unter dieser Annahme rechnet das Management für 2027 nur mit einem moderaten Anstieg gegenüber 2026, da das Unternehmen den entfallenen Beitrag aus Brasilien zunächst kompensieren muss. Das Unternehmen bezeichnete dies als Verschiebung seiner Wachstumsziele um rund ein Jahr, wodurch sich der bisherige Zielpfad für 2027 auf 2028 verlagert.

Die britische Machine Games Duty wird im April 2027 von 20 % auf 25 % steigen. Das Management schätzt die Belastung ab diesem Monat auf 2 bis 3 Millionen US-Dollar, geht jedoch davon aus, dass Spielentwicklungen und weitere Gegenmaßnahmen den Druck im Laufe der Zeit abfedern werden.

Das bisherige Ziel für die Free-Cashflow-Konversion von 20 % im Jahr 2026 wird aufgrund der Lage in Brasilien leicht gesenkt; ein neuer Zielwert wurde vom Management jedoch nicht genannt. Das Unternehmen geht davon aus, dass der Free Cashflow weiter steigen und der Verschuldungsgrad sinken wird.

Risiken und Beobachtungspunkte

• Der brasilianische Online-Glücksspielmarkt bleibt geschlossen, und der Zeitplan für die Wiedereröffnung ist ungewiss. Die Auswirkungen konzentrieren sich vor allem auf Virtual Sports, während das brasilianische iGaming-Geschäft des Unternehmens relativ klein war.
• Eine Wiedereröffnung rein für Sportwetten in Brasilien könnte Virtual Sports stützen, doch das Management betonte, dass der regulatorische Ausgang weiterhin unklar ist.
• Höhere britische Steuern bleiben kurzfristig ein Belastungsfaktor. Die Remote Gaming Duty hat sich bereits verdoppelt, während die Erhöhung der Machine Games Duty im April 2027 in Kraft tritt.
• Das Wachstum hängt teilweise von der weiteren Legalisierung von iGaming in den USA ab, die das Management als erhebliche Chance bezeichnete, ohne jedoch einen konkreten Zeitplan zu nennen.
• Das Unternehmen beabsichtigt, eine Refinanzierung seiner privaten Kreditfazilität zu prüfen, sobald die Vorfälligkeitsentschädigungen im Juni 2027 auslaufen. Das Management rechnet zudem mit einer ersten Zinssenkungsstufe im ersten Halbjahr 2027.

Höhepunkte der Analysten-Fragerunde

Das Management stufte die Erhöhung der britischen Machine Games Duty als beherrschbar ein. Es geht davon aus, dass die anfängliche Belastung von 2 bis 3 Millionen US-Dollar im Laufe der Zeit durch eine stärkere Spielperformance und andere Gegenmaßnahmen verringert wird.

Der Start von Virtual Sports bei FanDuel befand sich zum Zeitpunkt der Telefonkonferenz noch in einer frühen technischen Phase. Das Management rechnete mit der Migration in das Sportsbook innerhalb von ein bis zwei Wochen und erklärte, dass vier bis sechs Wochen an Betriebsdaten erforderlich seien, bevor das Nutzerengagement bewertet werden könne.

Bee Reel wird die Content-Kapazitäten ausbauen und unterversorgte Spielerkategorien in Nordamerika und anderen Märkten ansprechen. Der erste Titel befindet sich in der aufsichtsrechtlichen Prüfung, und der zweite ist fast fertiggestellt. Zudem hob das Management exklusive Content-Partnerschaften mit DraftKings, FanDuel, BetMGM, Hard Rock und Fanatics hervor.

Zur Kapitalallokation erklärte Executive Chairman Lorne Weil, dass Aktienrückkäufe die unmittelbare und mittelfristige Priorität seien. Zudem prüfe das Management bei sinkendem Verschuldungsgrad weiterhin Schuldentilgungen, Refinanzierungen und ausgewählte Akquisitionsmöglichkeiten.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Hello, and welcome to the Inspired Entertainment Third Quarter 2026 Conference Call. [Operator Instructions] 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 third quarter 2026 earnings press release and in the accompanying slide presentation, both of which are available in the Investors 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 meaning of United States securities laws.

These statements are based on management's current expectations and beliefs and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in such statements. For a discussion on 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. Reconciliation 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 Weil, the company's Executive Chairman. Mr. Weil, please go ahead.

A. Weil

Thank you, operator. Good afternoon, everyone, and thank you for joining our third quarter conference call. Per usual, CEO, Brooks Pierce and I will be making prepared remarks; and CFO, Craig Wilson; and VP of Corporate Development, Eric Carrera, are available to assist with Q&A. As anyone who even casually follows us, either -- or the broader gaming industry, knows, the news has been pretty well saturated with stories concerning regulatory changes in the U.K. and Brazil. In the U.K., the machine gaming duty was increased from 20% to 25% effective next April, following the doubling of the remote gaming duty effective last April. And for now at least, the online gaming industry in Brazil is shuttered and in limbo, which, by the way, was the primary reason our EBITDA in the quarter was a little below consensus.

Fortunately, in parallel, our platform has been strengthening in pretty much every dimension. EBITDA margins continue to improve, having reached 46% in the third quarter, while both capital intensity and leverage are declining with the growth of our digital business and overall growth momentum is building. At the same time, there have been so many moving parts, both internal to the company and within the regulatory environment, that is difficult to appreciate the growth momentum.

As you can see in Slide 5, trailing 12-month EBITDA at the end of the third quarter of 2026 was essentially flat to trailing 12 months at the end of full year 2025. However, in the interim, we divested the holiday park business and restructured the pub business, which together reduced our labor force by 1/3, and we absorbed a doubling of the U.K. remote gaming duty as well as a short but meaningful period of Brazil shutdown, as I referenced a moment ago. Adjusting for these developments, as shown on the slide, yields a like-for-like EBITDA growth in trailing 12-month EBITDA of 12% over the 9-month period or about 15% annualized, which we feel is indicative of the growth momentum that's building in the company.

In a few minutes, Brooks will go more deeply into the principal growth drivers, including interactive market share gains, new markets and customers for Virtuals and the resilience of our retail business. Comparing the third quarter of '26 to the third quarter of '25, we saw a 900 basis point increase in EBITDA margin despite the tax increases. And adjusting for the U.K. tax impact, like-for-like revenue increase of 9% and EBITDA grew at about twice that pace, more or less comparable to the 12-month figures we looked at a moment ago. Year-to-date free cash flow was $17.6 million, representing free cash flow conversion of about 22% of EBITDA.

Lastly, because of the Brazil shutdown, we're reducing the low end of our full year guidance to $109 million. Before I hand it over to Brooks, I think it's worth taking another look at the evolution of our EBITDA margins. Over the last 6 quarters, we've increased EBITDA margin by 1,100 basis points from 35% in the second quarter of 2025 to 46% in the third quarter of 2026. As noted in the slide, we achieved this increase through a combination of divestment and restructuring of our lowest margin businesses together with above-average growth in our highest margin digital business.

And with that, I'll hand it over to Brooks to talk in more detail about the performance of the business.

Brooks Pierce

Okay. Thanks, Lorne. As usual, I'll take a slightly deeper dive into the key drivers and metrics in each reporting segment. I agree with Lorne that there are many moving parts, particularly on the regulatory front. We have clarity now on the machine gaming duty starting in April of 2027, but Brazil and the timing of any changes is still yet to be determined. Nevertheless, we're encouraged by the progress that we're seeing across the business. So this slide illustrates the performance of our gaming machines in our 3 biggest markets, the U.K., Greece and North America.

In the U.K., shop closures have generally been concentrated among less profitable locations. So what you're seeing is per machine performance has improved across our 3 biggest betting shop customers. The remaining shops are also improving partly because play has been redistributed. We're particularly proud of our machines and our content in Greece, where we've widened our lead over existing competitors. Our newest Slant cabinet is performing so well that it's driving our overall numbers to their highest level in years. Almost 1/3 of our estate still needs upgrading to the latest cabinets, so we expect this trend to continue.

We're also encouraged by the improved performance in Illinois and with our Canadian customers, and we've recently installed cabinets on trial in Manitoba, which is our third province now. And we're confident our content will resonate with players there as it has in both Saskatchewan and Alberta.

Moving over to Slide 9. Our Interactive segment continues to perform well, even though the U.K. remote gaming duty doubled on April 1 of this year. As this slide shows, segment EBITDA grew 20% before the impact of the U.K. tax increase. Monthly results in the third quarter were slightly mixed. August was affected somewhat by the World Cup in prior months, but we are encouraged by the bounce back we saw in September and October was the best month we've ever had on record, even eclipsing any individual month in the first quarter, which was before the U.K. tax increase. We saw growth in key markets like North America, the U.K. and Greece. The largest contributor to overall growth was the U.S., where our GGR grew over 30% year-over-year in the third quarter, significantly outpacing broader U.S. iGaming market growth.

And Italy was our fastest-growing market with growth exceeding 50% year-to-date. We think this demonstrates the strength of our content and our ability to gain market share across major markets. We're also excited that the first game from our newest studio, Bee Reel, is already out now for regulatory approval.

Moving to Slide 10. As we've mentioned previously, there's nothing that would drive this segment more than additional U.S. states approving iGaming. In the meantime, we continue to gain share in all of our key markets. Outside the U.K., where our share is currently more than 11%, we're confident that we can grow our share from a combination of more bespoke games, more derivatives of our successful game theme families and a focus on player segments where we either don't participate or are under-indexed.

On Slide 11, we stress, look, at our core, we're a content company, and that's how we will differentiate ourselves across all 3 segments. We develop games for online players or retail players and for the crossover between the 2 as well as independently for each segment. This gives us what I consider the most swings at the plate. We've also made our mark with seasonal games. October's results show the power of Halloween-themed games, and we now move into the Thanksgiving-themed and Christmas-themed, and this is historically our highest GGR quarter of the year.

Variety matters, too. We showed some products at G2E in the Virtual space. Our first archived soccer product, Real Play Football goes live this year and a Golden Horses derivative of our successful virtual horse racing product should add appeal to a product that has been in the market for years.

Moving to Slide 12. One of our goals has always been to become a more global company and to rely less on the U.K. market. And as the chart shows, we've doubled the percentage of our non-U.K. revenue since 2023, and we expect this trend to continue as key growth markets like North America and Greece become bigger contributors. The pipeline of opportunities outside the U.K. continues to grow on a daily basis.

So speaking of growth, we see many opportunities to grow the business despite the U.K. higher taxes and the uncertainty in Brazil. Our digital business remains a key driver with the highest margins, the biggest cash flow contribution and the most opportunity. We still believe it's a matter of when, not if additional states will be added for iGaming and nothing would be more meaningful for us and for some of the larger states to approve and deploy. We also see a number of opportunities for our Virtual Sports business in the U.S. We're excited that we've gone live now in our fourth U.S. lottery market in Massachusetts with our horse racing product. And we launched our Virtuals product with FanDuel. FanDuel is the largest sports operator in the U.S., which obviously gives us the sense that this is the best chance for success for this product.

Moving to some kind of new products. We expect to launch additional eInstant games in the iLottery space in 2027, a key opportunity for us to leverage our content development skills in another channel. We expect clarity in Illinois on the expansion of VLTs in the Chicago market. And I'm happy to say that we took actually our first order today, as a matter of fact, for an expansion into Chicago. So we're starting to see that opportunity manifest itself, certainly some in this quarter, but probably more so in 2027.

The last thing is we're excited to move our content into the U.S. Class III market through a unique relationship with Gaming Arts, and we showed that product at G2E for many of you that were out there. We're also fielding a number of inquiries in the lottery systems market following the successful launch of our cloud-based system built from scratch in the Dominican Republic. We have plenty of opportunities to fill the gap created by the U.K. tax increase. Between the U.K. tax and potential Brazil headwinds, we basically pushed our targets out by a year.

Even so, we continue to improve our EBITDA margins and cash flow, reduce our leverage ratio and build a large pipeline of opportunities across our segments and markets. Most of our business, as you would know, is recurring revenue under long-term contracts, and we're making progress on our strategy to increase the share of revenue and EBITDA from our existing segments.

With that, I'll hand it back over to Lorne.

A. Weil

Thanks, Brooks, for a great deep dive into each of the businesses. Slide 15 summarizes the 3-year period 2025 to 2027. This is a slide that we've been looking at now for the last several quarters. And in this case, it's assuming that the shutdown in Brazil stays in effect. Brazil in and of itself has not been a growth market in the last couple of years. So we don't expect that the shutdown of Brazil will compromise the organic growth profile of the company, per se. But what it does do is shifts the growth curve 1 year to the right in effect. So we expect 2027 will be up only modestly from 2026 because, again, we're assuming that Brazil will stay shut down, and we need to first make that up before we can generate any growth.

And then '28 will look like '27 and had otherwise been projected to be and so forth. Notwithstanding the shift in the growth trajectory, free cash flow is projected to continue increasing along with the decline in leverage. With regards to free cash flow conversion, our previous target of 20% for 2026 will be lowered a little bit because of the impact of Brazil. Finally, let me make a comment about debt and covenant issues in response to some questions that we've been getting.

At the end of the third quarter, our senior secured net leverage was about 2.8x, well below the covenant leverage of 5, giving us over $46 million of covenant EBITDA headroom. As further noted on the slide, we can repay our private credit facility that matures in June 2030 without any prepayment penalty anytime from June 2027. Since our EBITDA, leverage ratio, and cash flow have all improved meaningfully since we put this facility in place in 2025, the possibility of refinancing prior to maturity is something we will be looking at very carefully. I should also mention with respect to this facility that we expect sometime during the first half of 2027 that we will be achieving the first step down in our rate on this facility.

And with that, operator, can we please turn the program over to Q&A.

Operator

[Operator Instructions]

Your first question comes from the line of Matthew Maus with B. Riley Securities.

Fragen und Antworten

Matthew Maus

So Weil, Wilson, and Pierce, the strongest quarter, gross win per unit per day were both up double digits percentage-wise. So as U.K. operators absorb the higher machine duty, wondering how our revenue share conversation is going? And does that performance help?

Brooks Pierce

In terms of our revenue share, is it -- you mean the our contract rates, is that what you mean by the question?

Matthew Maus

Just in relation to -- yes, more in relation to how U.K. operators as they're absorbing the higher machine duty, how that changes things.

Brooks Pierce

Yes. Look, I think it's common knowledge. You've probably read plenty of press that nobody was happy about the fact that the tax increased at all. There was obviously a lot of conversation about why that shouldn't be the case. But I could say on the other -- the flip side of that, there had been some discussion that it could increase as much as 20%, and it actually only increased 5%. So I think it's -- I don't think anybody is happy about it from an operator perspective nor are we. But we do feel that it's manageable, and we have plans to be able to hopefully mitigate as much of this as possible.

Matthew Maus

Yes. So kind of as a follow-up to that, machine games duty going up. Just wondering like how much do you think you can reasonably offset and what are the main levers there? I think back a few months ago, you said you could reasonably offset the increase in the duty. Just wondering what the levers there are and how much you think you can.

Brooks Pierce

Yes. So I think now that we know what the percentage is, based on our estimates, we believe that it's going to be an impact to us of between $2 million and $3 million starting in April, so not a full year next year. But we also believe, and we've had history of the changes in tax rates in the U.K. that over the course of time between game development and other things, we'll find a way to mitigate it. So we look at this as a short-term headwind starting in 2027, but we're obviously think that we'll be able to mitigate that over the course of time.

Matthew Maus

Great. Last one for me. It's great seeing FanDuel's Virtual Sports offerings live. Just wondering if you could give more color there. How many states does it cover? How does early engagement compare with BetMGM's integrated sportsbook?

Brooks Pierce

Yes. Unfortunately, it's too early in the process. They just went live within the last week or 2, and it's really more in a proof mode, making sure the tech is all working. It will migrate over to the sportsbook probably here in the next week or 2. And then I think we probably need 4 or 6 weeks for it to bed down to have some sense. But we've seen nice progress with BetMGM, and we would expect because FanDuel is substantially bigger from a sports betting standpoint. And so we would hope that this will be a catalyst to get some good growth out of the Virtual Sports business. And FanDuel is going to launch with more sports. BetMGM right now only has 3. FanDuel is launching with 5. So we're obviously -- it's taken a long time to get us there, but we're certainly hopeful and encouraged that we finally got it done.

Matthew Maus

Yes, great to see that. Hoping to see it as a catalyst for 2027.

Operator

Your next question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group.

Will Yager

This is Will on for Ryan. First, I wanted to ask on maybe guidance in Brazil. I know you guys called out a $3 million revenue impact there after the ban went into effect. And I know the flow-through on EBITDA was a little bit higher there. So curious the revisions there, maybe if there's anything else included and which segment specifically that's impacting?

Brooks Pierce

No. I think, look, as we've talked about, Lorne and I talked about, it's a very fluid situation. I think we're taking the most conservative posture here, assuming that the ban doesn't get lifted, but I think we have lots of reasons to think that, that might not be the case. But in terms of the impact to us, it's predominantly our Virtual Sports business. Our iGaming business in Brazil was relatively small. And I think we talked a little bit about what the impact was both on the revenue side and kind of the EBITDA flow-through on the last call, and nothing has really changed from that.

Will Yager

And maybe a quick follow-up there. 2027 guidance revised too, we'd assume primarily for Brazil. Just curious maybe if there's a chance the market comes back online maybe for sports betting like we've heard about what uplift that might provide? And then maybe as another follow-up to that, if it is -- we're a few months from now, and it seems that the ban is going to stick. Do you have any cost-saving measures or anything you can undergo there?

Brooks Pierce

Yes. Look, we're obviously hopeful. And certainly, we have people on the ground there every day kind of working on this. And so we're hopeful that it will return. I would say in terms of the impact, certainly, if the ban stays, yes, we do have ways to be able to mitigate some costs that we will do. So the -- what we've kind of guided to $1 million a month will obviously be mitigated if the ban doesn't get lifted. So -- and in terms of -- there's obviously been conversation that it may be sports only and online casino would still stay banned, but they allow sports. I mean you could certainly make an argument that could potentially help us in terms of Virtual Sports.

So unfortunately, for us, as you can imagine, with this not being clear, we're just kind of forecasting what we can forecast. And -- but I think it will come to a head. I think there'll be a decision, if not before the end of the year, certainly in the first quarter. It's my view, at least.

Operator

Your last question comes from the line of Chad Beynon with Macquarie Capital.

Chad Beynon

Brooks, I wanted to ask about the Bee Reel studio. You've had a lot of nice success gaining market share. In the U.S., a lot of operators are talking about some decelerating growth, but because you're taking share, I don't think a little of the overall TAM shrinking near term really matters for you guys. So as you continue to take share, how is this studio a part of that thesis? And are you being asked to do more exclusive games? Or anything around the number of titles or timing of releases would be helpful.

Brooks Pierce

Yes. That's a good question. Yes, we certainly have, as part of the plan for the studio to develop games for the North American market. But as I also said in my remarks, we're also looking at some of the areas from a -- kind of really from a player behavior aspect where we either don't serve them or are under-indexed, and that could be in the U.S. or that could be in other markets. So what it really does is gives us -- we're assuming when it gets fully up to speed, this is going to be able to put an output of another game per month, which will increase our capacity pretty nicely. So whether it ends up being more U.S., I think that's still kind of to be determined. First game is out at GLI. The second game is pretty much done. So we'll hope to hit the ground running with the studio.

And yes, in terms of your -- the second part or third part of your question about exclusive, yes, I mean, look, we're -- we have a very good relationship with -- here's a perfect example. Rush Street just told us in October, we were their second biggest supplier, which is obviously great and gratifying for us. So we try to navigate exclusives across all the biggest operators in the best and fairest way possible. But as you know, Chad, I mean, there's tons of content out there, and it's really kind of gauged by how yours does relative to the competition. So we certainly -- we have a lot of exclusives with DraftKings, FanDuel, BetMGM, Hard Rock, Fanatics, you kind of name it. So it's kind of the confluence of all of that stuff.

Chad Beynon

Great. And then with more certainty around some of these unknowns that we've talked about here this afternoon, how does that adjust your thinking in terms of capital allocation, share repurchases or maybe expanding into M&A with leverage coming down under 3x?

A. Weil

I was wondering when you were going to ask that, Chad. I thought you were about wrapped up with the other question. But thank you for asking it.

Chad Beynon

You know your analysts wait too well.

A. Weil

Well, particularly the ones we've known as long as we've known you, Chad. But had you not asked it, I was going to volunteer it anyway as a closing remark. So in our minds, in theory, we're always thinking about share repurchase debt repayment. We mentioned that we're going to be getting a step down anyway in our rate sometime in the first half and acquisitions, which, again, given our leverage right now and general valuations, we're looking at a couple of things quite carefully. But I think it goes without saying that given where our shares are trading now for at least the immediate and intermediate future are overwhelming, emphasis is going to be on share repurchase.

I think we're probably barely -- given where the EBITDA is going to be in 2026 and the minimum it will be in 2027 if we don't get some turnaround in Brazil, I don't -- we're barely trading at 4x EBITDA compared to like 7 as an average for suppliers in the gaming industry. So we're going to be buying it as aggressively as we ever have, and we'll just see where we get as we move through the fourth quarter.

Operator

There are no further questions at this time. I will now turn the call back to Lorne Weil, Executive Chairman, for closing remarks.

A. Weil

Thank you, operator, and thanks, everyone, for participating at this fairly late time in the afternoon. I think we're pretty happy with the third quarter, taking all of the group of objectives that we're trying to achieve simultaneously, profitability, cash flow, leverage, growth and so forth. We're excited about the rest of the year and next year, and we look forward to speaking to you all in a quarter or so. Thank you.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.