Inspired Entertainment, Inc. Revenue Disclosure
11. Contract Related Disclosures
The following table summarizes contract related balances:
Accounts Receivable |
Unbilled Accounts Receivable |
Right to recover asset |
Deferred Income |
Customer Prepayments and Deposits |
||||||||||||||||
| (in millions) | ||||||||||||||||||||
| At December 31, 2024 | $ | 61.5 | $ | 26.0 | $ | 0.6 | $ | (18.6 | ) | $ | (3.9 | ) | ||||||||
| At December 31, 2023 | $ | 42.8 | $ | 24.0 | $ | 0.6 | $ | (12.7 | ) | $ | (2.9 | ) | ||||||||
Unbilled accounts receivable are a form of contract asset and primarily result from revenue being recognized when or as control of a solution or service is transferred to the customer, but where invoicing is contingent upon the completion of other performance obligations or payment terms differ from the provisioning of services. The current portion of unbilled accounts receivable is reported within prepaid expenses and other current assets in the consolidated balance sheet, and the non-current portion is included in other assets. Right to recover assets are recognized in respect of the transfer of products with a right of return where the Company has also recognized a refund liability. Right to return assets are recognized in other debtors and refund liabilities are recognized as part of deferred income. Contract liabilities (deferred income and customer prepayments and deposits) primarily relate to consideration received from customers in advance of delivery of the related goods and services to the customer. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.
Revenue recognized that was included in the deferred income balance at the beginning of the period amounted to $3.8 million, $8.7 million and $7.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.
For the years ended December 31, 2024 and 2023 there was no significant amounts of revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied in the respective prior periods.
The Company capitalizes certain costs incurred in obtaining or fulfilling a customer contract. The following table summarizes amounts capitalized on the Consolidated Balance Sheets at December 31, 2024 and 2023, net of accumulated amortization.
| December 31, 2024 | December 31, 2023 | |||||||
| (in millions) | ||||||||
| Costs to obtain contracts with customers, net | $ | 0.6 | $ | 0.5 | ||||
| Customer contract fulfillment costs, net | 10.4 | 8.9 | ||||||
| Total costs of obtaining and fulfilling customer contracts, net | $ | 11.0 | $ | 9.4 | ||||
Amortization of capitalized contract costs was $9.5 million, $8.5 million, and $7.0 million during the years ended December 31, 2024, 2023, and 2022, respectively. We did not recognize any impairment losses on such costs during the years ended December 31, 2024, 2023, or 2022.
INSPIRED ENTERTAINMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED
DECEMBER 31, 2024, 2023 AND 2022
Transaction Price Allocated to Remaining Performance Obligations
At December 31, 2024, the transaction price allocated to unsatisfied performance obligations for contracts expected to be greater than one year, or performance obligations for which we do not have a right to consideration from the customer in the amount that corresponds to the value to the customer for our performance completed to date, variable consideration which is not accounted for in accordance with the sales-based or usage-based royalties guidance, or contracts which are not wholly unperformed, is approximately $133.6 million. Of this amount, we expect to recognize as revenue approximately 34% within the next 12 months, approximately 44% between 13 and 36 months, approximately 22% between 37 and 60 months, and the remaining balance through December 31, 2030.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.