Company Operations and Structure - Codere Online has only operated as an independent company since June 4, 2021, following the spin-off of its online casino and sports betting businesses [138]. - Codere Online's operations are subject to a 19% VAT tax on online deposits and a 1% stamp duty on documents effective from February 22, 2025, which may adversely affect its business in Colombia [176]. - Codere Online's reporting currency is the euro, and fluctuations in exchange rates of non-euro currencies could lead to foreign exchange gains or losses, impacting its financial condition [186]. - Codere Online's management and key personnel are critical to its business strategy, and the loss of these individuals could negatively impact operations [251][253]. - Codere Online is organized under the laws of Luxembourg, with substantial assets located outside the United States, making it difficult for U.S. investors to enforce judgments against the company [311]. Regulatory Environment and Compliance - The online gaming industry is subject to extensive regulation, including a 20% tax on gross gaming revenue in Spain, which can significantly impact profitability [148]. - Codere Online relies on licenses to conduct operations, and failure to renew or obtain these licenses could adversely affect its business [143]. - Regulatory changes, such as the recent ruling by the Spanish Supreme Court, may affect advertising practices and market strategies [150]. - The DGOJ has introduced new advertising restrictions and reinforced due diligence and client verification requirements as of August 5, 2023 [152]. - Codere Online's licenses may be revoked by regulatory authorities even if the company is in compliance with obligations, particularly in Mexico [160]. Financial Performance and Risks - Codere Online's future performance may differ significantly from prospective financial information due to various uncontrollable factors [136]. - The company may require additional capital to support growth plans, which may not be available on favorable terms [132]. - The gaming industry is subject to significant taxation, and increases in gaming taxes may impact profitability and have a material adverse effect on Codere Online's business [166]. - Codere Online faces increased regulatory and tax compliance costs due to potential increases in taxation, which could materially affect its business [169]. - Codere Online's performance is subject to significant volatility due to the nature of sports betting, where actual results can differ markedly from theoretical profit expectations [222]. Cybersecurity and Operational Risks - Codere Online faces risks related to cyberattacks and system breaches, which could disrupt operations and affect financial performance [132]. - The company faces risks from cyberattacks, which could lead to system failures, business disruptions, or loss of customer data, adversely affecting its financial condition [218]. - Codere Online has implemented internal controls to monitor unusual transaction patterns to mitigate exposure to fraud, but success is not guaranteed [238]. - The company relies on third-party providers for geolocation and identity verification, and any failure in these systems could adversely affect its compliance with legal requirements [229]. - Codere Online's platforms contain third-party open source software, which may expose the company to risks if it fails to comply with open source software licenses [230]. Market and Competitive Landscape - Codere Online operates in emerging markets, including Mexico, Panama, Colombia, and Argentina, which presents additional costs and risks [132]. - The company may face increased competition from retail operators as the threat of the COVID-19 pandemic diminishes and consumer preferences shift [177]. - Codere Online operates in a highly competitive environment, facing competition from larger companies and illegal gaming activities, which could adversely affect its revenues and profitability [195][197]. - The success of Codere Online's mobile apps relies on compatibility with major operating systems and high-bandwidth data capabilities, which are outside the company's control [223]. - Codere Online's business is sensitive to reductions in discretionary consumer spending, influenced by economic and political conditions in its operating markets [179]. Internal Controls and Governance - Codere Online has identified a material weakness in its internal control over financial reporting, which could negatively impact its market price [133]. - The company reported four material weaknesses related to technical accounting personnel, cash disbursement controls, cybersecurity processes, and overall internal controls [270]. - As of December 31, 2023, three of the four material weaknesses were remediated, but the fourth remains unresolved [271]. - Codere Online's management is implementing enhancements to its internal control system to address the fourth material weakness, but cannot assure timely remediation [273]. - Codere Online's corporate governance is governed by Luxembourg law, which may not provide the same level of protection for minority shareholders as U.S. laws [317]. Shareholder and Market Dynamics - Codere Newco controls approximately 65.7% of Codere Online's outstanding Ordinary Shares, which may lead to conflicts of interest [281]. - Codere Online received a determination letter from Nasdaq regarding potential delisting due to failure to timely file its Form 20-F for the year ended December 31, 2023 [286]. - If Codere Online's securities are delisted from Nasdaq, it may face significant adverse consequences, including reduced liquidity and increased regulatory scrutiny [284]. - Codere Online's shareholders' proportionate ownership interest will decrease with the issuance of additional Ordinary Shares [293]. - The ability to amend the terms of Codere Online Warrants is unlimited, which could adversely affect holders without their approval [294]. Legal and Tax Considerations - The company may face tax liabilities due to its historical membership in a consolidated tax group, which could adversely affect its financial condition [261][262]. - Luxembourg insolvency and bankruptcy laws may offer less protection to Codere Online shareholders compared to U.S. laws, complicating recovery in liquidation scenarios [316]. - The enforceability of U.S. court judgments in Luxembourg is subject to specific conditions, including compliance with Luxembourg procedural codes [312]. - Codere Online believes it should not be treated as a U.S. corporation for U.S. federal income tax purposes, as the ownership percentage of DD3 stockholders in Codere Online was less than 60% [321]. - If treated as a U.S. corporation, Codere Online could face substantial additional U.S. income tax liabilities and a 30% withholding tax on dividends paid to non-U.S. shareholders [322].

Core Insights - Codere Online has launched a commemorative jersey for Club de Futbol Monterrey as part of the club's 80th Anniversary celebrations and its participation in the 2025 Club World Cup [1][7] - The Codere logo will be prominently displayed on the front of the Monterrey Football Club's jersey during the tournament, which features 32 teams [2] - An advertising campaign will be initiated by Codere Online and Rayados to promote the tournament and the club's anniversary across various media channels [3] Company and Industry Overview - Codere Online is a leading online gaming operator in Spain and Latin America, offering online sports betting and casino services through its website and mobile applications [9] - The company operates in key markets including Spain, Mexico, Colombia, Panama, and Argentina, and is part of the Codere Group, which has a strong physical presence in these regions [9][10] - Codere Group has over four decades of experience in the entertainment and leisure industry, being a significant player in the private gaming sector across Europe and Latin America [10]

Financial Data and Key Metrics Changes - The company reported net gaming revenue of €57 million for Q1 2025, an 8% increase compared to Q1 2024 [10][13] - Adjusted EBITDA was €1.8 million, marking the fifth consecutive quarter of positive adjusted EBITDA at the consolidated level [13][14] - On a constant currency basis, net gaming revenue would have been €62 million, reflecting a 17% increase year-on-year [11][14] Business Line Data and Key Metrics Changes - The casino segment contributed 61% to total net gaming revenue, driven by a 13% increase in average monthly active users [11] - In Mexico, net gaming revenue grew 15% to €30.5 million, while in Spain, it remained flat at €22 million [13][16] - The average monthly spend per active customer decreased by 5% to €118 [11] Market Data and Key Metrics Changes - The Mexican peso devalued by over 16% in Q1 2025, impacting net gaming revenue by €5 million [16] - The number of average monthly active customers in Mexico increased by 31% year-on-year to 82,000 [17] - In Spain, the number of active customers rose by 4% year-on-year, reaching 52,000 [15] Company Strategy and Development Direction - The company is focusing on optimizing customer acquisition channels, particularly in Mexico, where growth opportunities remain compelling [17] - There is an ongoing effort to adapt promotional strategies in Spain to improve customer quality and retention [15][36] - The company plans to maintain its investment in Mexico while cautiously exploring opportunities in other markets like Panama and Argentina [48][49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by currency fluctuations but expressed confidence in meeting full-year guidance for net gaming revenue between €220 million and €230 million [19] - The company expects a difficult comparison for Q2 results but anticipates less impact thereafter as they lap significant devaluation from the previous year [17] - Management is optimistic about resuming growth in Spain, supported by positive trends observed in recent months [65][66] Other Important Information - The company has initiated a share buyback plan of up to $5 million, with approximately $5 million already spent on repurchasing shares [12] - The company is currently under a mandatory monitoring period by NASDAQ but expects to resolve compliance issues soon [6][10] Q&A Session Summary Question: What is driving the decrease in customer acquisition cost despite increased user acquisition? - Management indicated that testing new traffic sources led to reduced CPA and higher first-time depositors, although the revenue impact was lower than expected [25][28] Question: What is the impact of competition on Spain's revenue growth? - Management confirmed that the reintroduction of welcome bonuses and increased competition are primary drivers for flat revenue growth in Spain [34][36] Question: How does the company view investment opportunities in other markets? - Management noted improvements in Panama and a cautious approach in Colombia, with plans to increase investment in Mexico [46][48] Question: Will Spain return to revenue growth for the rest of the year? - Management expressed confidence in resuming growth in Spain, supported by positive signals from KPIs [65][66] Question: What are the dynamics of the share repurchase program? - Management clarified that the board approved a $5 million buyback plan within a broader $10 million shareholder authorization [81][82] Question: Is there any progress on the Argentina license acquisition? - Management indicated that there has been no significant progress on the Argentina license acquisition due to pricing issues [84]

Financial Data and Key Metrics Changes - The company reported net gaming revenue of €57 million, an 8% increase compared to Q1 2024 [9][12] - Adjusted EBITDA was €1.8 million, marking the fifth consecutive quarter of positive adjusted EBITDA at the consolidated level [12][13] - On a constant currency basis, net gaming revenue would have been €62 million, reflecting a 17% increase year-on-year [10][12] Business Line Data and Key Metrics Changes - The casino segment contributed 61% to total net gaming revenue, driven by a focus on this segment and a lower sports margin in Mexico [10] - In Mexico, net gaming revenue grew 15% to €30.5 million, while in Spain, it remained flat at €22 million [12][15] - The average monthly active users increased by 13%, while the average monthly spend per active customer decreased by 5% to €118 [10][12] Market Data and Key Metrics Changes - The Mexican peso devalued by over 16% in Q1 2025, impacting net gaming revenue by €5 million [15][17] - The number of average monthly active customers in Mexico rose to 82,000, a 31% increase year-on-year [16] - In Spain, the number of active customers increased by 4% year-on-year, reaching 52,000 [14] Company Strategy and Development Direction - The company is focusing on optimizing customer acquisition channels and maintaining its market position in Mexico, which is seen as a core market with significant growth potential [16][62] - The management is adapting promotional strategies in Spain to improve customer quality and retention amid a competitive landscape [14][35] - The company plans to continue investing in Mexico while remaining cautious in other markets like Colombia and Argentina due to regulatory challenges [46][52] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by currency fluctuations but expressed confidence in meeting full-year guidance for net gaming revenue between €220 million and €230 million [19][50] - The company expects a difficult comparison for Q2 results but anticipates less impact thereafter as they lap significant devaluation from the previous year [17] - Management is optimistic about the potential for revenue growth in Spain, despite current competitive pressures [64] Other Important Information - The company has initiated a share buyback plan of up to $5 million, with approximately $5 million already spent on repurchasing shares [11][83] - The company is currently under a mandatory monitoring period by NASDAQ but has regained compliance by filing its 2023 annual report [5][6] Q&A Session Summary Question: What is driving the decrease in customer acquisition cost despite increased user acquisition? - Management indicated that testing new traffic sources led to reduced customer acquisition costs, although the revenue impact from these new customers was lower than expected [24][27] Question: What is the impact of competition on revenue growth in Spain? - Management confirmed that the reintroduction of welcome bonuses and increased competition have affected revenue growth, but they are seeing positive trends from adjusted promotional strategies [32][35] Question: Are there plans to increase investments in other markets? - Management noted improvements in Panama and a cautious approach in Colombia, with potential for increased investment in Mexico due to upcoming events [46][52] Question: Will Spain return to revenue growth for the rest of the year? - Management expressed confidence in resuming revenue growth in Spain, supported by positive KPI signals [64][66] Question: What is the rationale behind the share repurchase program? - Management explained that the board approved a $5 million buyback plan within a broader shareholder authorization, allowing flexibility in execution [82][83] Question: Any updates on the Argentina license acquisition? - Management indicated that progress remains stalled due to pricing issues, but they are still open to opportunities [86]

Financial Performance - Codere Online achieved a Q1 2025 Net Gaming Revenue (NGR) of €57 million, an 8% increase compared to Q1 2024, despite facing foreign exchange headwinds[25] - The company reported a positive Adjusted EBITDA of €18 million in Q1 2025[25] - Mexico's NGR increased by 15% year-over-year in Q1 2025, or 34% in constant currency, driven by a 31% increase in active customers[49] - Spain experienced a 2% decline in NGR in Q1 2025, but saw a 4% increase in active customers[43] Customer Acquisition and Engagement - Codere Online acquired approximately 322,000 new customer registrations with 91,000 First Time Deposits (FTDs) in Q1 2025, resulting in a 28% conversion rate[25] - The Cost per Acquisition (CPA) was €198 in Q1 2025[25] - Average Monthly Actives reached approximately 161,000 in Q1 2025, a 13% increase compared to Q1 2024[25] - Average Monthly Spend per Active was €118, a 5% decrease compared to Q1 2024[25] Financial Position - Codere Online has €42 million in total cash, with €37 million available, and a negative Net Working Capital (NWC) position of €18 million as of March 31, 2025[58] Outlook - The company projects a 2025 Net Gaming Revenue (NGR) between €220 million and €230 million and an Adjusted EBITDA between €10 million and €15 million[67]

Core Insights - Codere Online reported a strong start to 2025, with net gaming revenue reaching €57.0 million in Q1, an 8% increase year-over-year [3][5] - The company is on track to meet its 2025 net gaming revenue outlook of €220-230 million and adjusted EBITDA outlook of €10-15 million [4][5] Financial Performance - Total revenue for Q1 2025 was €54.3 million, with net gaming revenue at €57.0 million, reflecting an 8% increase compared to Q1 2024 [5][8] - In Mexico, net gaming revenue grew by 15% to €30.5 million, while Spain saw a slight decline to €21.9 million, down 2% [2][3] - The average monthly active players increased by 13% to 161.3 thousand, with significant growth in Mexico at 31% [2][3] Operational Metrics - The total cash position as of March 31, 2025, was €41.8 million [5] - The company repurchased $0.5 million of its shares under a $5.0 million share buyback plan [5][9] Compliance and Governance - Codere Online regained compliance with Nasdaq listing requirements as of May 15, 2025 [9] - The company is actively working to complete the audit of its 2024 financial accounts and expects to file the 2024 annual report by the end of May 2025 [9]

Core Points - Codere Online has filed its annual report on form 20-F for the year ended December 31, 2023, with the U.S. SEC within the extension period granted by the Nasdaq Hearings Panel [1] - The company plans to release its first quarter 2025 results on May 16, 2025, prior to 8:30 AM US Eastern Time, followed by a conference call to discuss the results and provide a business update [2] - The earnings press release and related materials will be available on Codere Online's website, and a recording of the conference call will be accessible afterward [3] Company Overview - Codere Online, launched in 2014, is part of the Codere Group and operates as a leading online gaming operator in Spain and Latin America, offering online sports betting and casino services [5] - The company operates in key markets including Spain, Mexico, Colombia, Panama, and Argentina, and its online business is supported by the physical presence of Codere Group throughout Latin America [5]

Company Operations and Structure - Codere Online has only operated as an independent company since June 4, 2021, following the spin-off of its online casino and sports betting businesses [136]. - The company has operations in emerging markets such as Mexico, Panama, Colombia, and Argentina, which may present additional costs and risks [130]. - Codere Online's ability to continue as a going concern is based on management's expectations regarding operating performance and the completion of Codere Group's recapitalization on October 15, 2024 [200]. - Codere Online relies on Codere Group for critical services, and any termination of service agreements could impact its operations and financial condition [202]. - Codere Newco controls approximately 65.7% of the outstanding Ordinary Shares, which may lead to conflicts of interest and affect corporate governance [281]. Regulatory Environment - The online gaming industry is subject to extensive regulation, including a 20% tax on gross gaming revenue in Spain, which can significantly impact profitability [146]. - Codere Online relies on licenses to conduct operations, and failure to renew or obtain these licenses could adversely affect its business [141]. - The company faces increased regulatory pressure, including advertisement restrictions and limitations on payment methods, which could impact operations [145]. - The DGOJ has introduced strict requirements for player protection and fraud prevention, with new regulations effective from March 15, 2024 [150]. - The Spanish Gaming Law imposes severe penalties for serious infringements, including potential license revocation [161]. Financial Performance and Risks - Codere Online's net gaming revenue for the year ended December 31, 2023, shows approximately 46% derived from online sports betting and 54% from online casino products [210]. - Changes in taxation or the interpretation of tax laws could adversely affect Codere Online's business, as gaming taxes are a significant percentage of revenues [164]. - The company may require additional capital to support growth plans, which may not be available on favorable terms [130]. - Codere Online's operations are subject to a 19% VAT tax on online deposits and a 1% stamp duty on documents effective from February 22, 2025, which may adversely affect its business in Colombia [166]. - The company faces increased regulatory and tax compliance costs due to potential new taxes, which could materially impact its financial condition [167]. Market and Competitive Landscape - Codere Online operates in a highly competitive environment, facing competition from larger companies and illegal gaming activities, which could adversely affect its revenues and profitability [190][192]. - Increased competition from retail operators as the threat of the COVID-19 pandemic diminishes may adversely affect Codere Online's online sports betting business [174]. - Codere Online plans to expand its operations in high-growth Latin American markets, including Colombia, Panama, and Argentina, and explore new markets like Brazil and Peru [187]. Technology and Cybersecurity - Codere Online's technology and information systems must continuously evolve to keep pace with rapid technological developments in the online gaming market [204]. - The company is vulnerable to cyberattacks, which could lead to significant business disruption and financial losses, as evidenced by a cyber-related fraud incident in 2022 [216]. - Codere Online's reliance on third-party platforms for app distribution may impact its ability to deliver offerings effectively, especially with frequent changes in mobile operating systems [222]. Legal and Compliance Issues - Codere Online has identified material weaknesses in its internal control over financial reporting, which could affect market perception [133]. - The company faces potential fines of up to €35 million or 7% of global annual revenue under the new AI Act, which will be enforced starting August 1, 2024 [209]. - Codere Online's operations could be adversely affected by legal proceedings, including tax disputes and regulatory investigations, which may arise in the future [246]. - The company may face legal challenges related to the ownership of open source software, which could lead to costly licenses or operational disruptions [229]. Economic and Geopolitical Factors - The ongoing geopolitical tensions and economic instability could significantly impact Codere Online's operations and financial results [177]. - The Mexican peso depreciated by approximately 22.5% in 2024, weakening from 17.6 MXN per EUR to 21.6 MXN per EUR by the end of December [183]. - The company is subject to military service obligations for its employees in Israel, which may lead to labor shortages and impact operations [259]. Management and Governance - Codere Online's management has incurred significant legal and compliance costs since becoming a public company in Q4 2021, which are expected to increase further [247]. - The company faces reputational damage and diminished customer confidence due to increased fraud or misuse of its products and services [242]. - Codere Online's success is dependent on maintaining its brand and the skill of its management team, with potential impacts from losing key personnel [130]. Shareholder and Market Considerations - Codere Online's existing shareholders' proportionate ownership interest will decrease if additional Ordinary Shares are issued, potentially depressing the market price of the Ordinary Shares [295]. - Codere Online is not expected to pay any dividends on the Ordinary Shares in the foreseeable future [298]. - Codere Online qualifies as a "foreign private issuer," allowing it to disclose less information than U.S. public companies, potentially limiting information available to shareholders [301].

Financial Data and Key Metrics Changes - The company reported net gaming revenues of €53 million for Q4 2024, a 5% increase compared to Q4 2023. In constant currency terms, net gaming revenue would have been €57 million, reflecting a 15% increase year-on-year [10][14] - Adjusted EBITDA for Q4 2024 was €1.9 million, with a total adjusted EBITDA of €6.4 million for the full year [15][16] - The company ended the year with €40 million in total cash, of which approximately €35 million was available [22] Business Line Data and Key Metrics Changes - The casino segment contributed 62% of total net gaming revenue in Q4 2024, driven by a seasonal decline in sports betting [10] - In Spain, net gaming revenue grew by 10% to €23 million, while in Mexico, it remained flat at €25 million due to currency and sports betting margin headwinds [14][20] - The number of average monthly active customers increased by 6%, with 71,000 first-time depositors in Q4 2024, up from 67,000 in Q3 2024 [11][12] Market Data and Key Metrics Changes - The Mexican peso devalued by 14% in Q4 2024, impacting net gaming revenue by approximately €3.4 million [20][22] - Despite the currency headwinds, the company reported a 16% increase in average monthly active customers in Mexico compared to Q4 2023 [21] Company Strategy and Development Direction - The company plans to implement a one-year share buyback plan for up to $5 million, reflecting confidence in its cash position and expected cash flow generation [12] - The management emphasized the attractiveness of investment opportunities in Spain and Mexico, despite the competitive landscape [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a weaker Mexican peso and new tax regulations in Colombia, which could impact future growth [24][40] - The company expects net gaming revenue for 2025 to be between €220 million and €230 million, reflecting a 6% increase at the midpoint compared to 2024 [24] Other Important Information - The company successfully transitioned to a new auditor, MaloneBailey, after the resignation of its former auditor, Marcum [7][8] - The management highlighted the importance of maintaining a balance between growth and profitability in their future strategies [25] Q&A Session Summary Question: What is the Euro assumption embedded in the 2025 guidance? - The CFO indicated that he would need to check the specific FX forecast included in the 2025 figures and follow up after the call [33] Question: Is the implied flow-through to EBITDA a function of conservatism around user acquisition investment? - The CFO noted that the upcoming Club World Cup in mid-2025 is a factor in their conservative guidance, as marketing investment is crucial for outcomes [36] Question: Have competitors shifted focus to Brazil, affecting competitive intensity in Mexico? - The CEO mentioned that while competitors have not left Mexico, some have taken a short break, providing an opportunity for the company to capitalize on [58] Question: What are the growth investment plans outside of Mexico? - The CEO stated that while they are looking at opportunities in Brazil, the focus remains on core markets where they see good ROI, and they are cautious about entering new markets [80][81] Question: What is the situation in Argentina? - The CEO expressed challenges in entering the province of Argentina, which limits growth potential, and they are actively seeking opportunities to obtain a license [84]

Codere Online Q4 2024 Earnings Disclaimer This presentation (this "Presentation"), its contents and any information provided during the meeting to present this document are for discussion purposes only, and must not be relied upon for any purpose. This Presentation is not for release, publication or distribution, in whole or in part, in or into any jurisdiction where such distribution would be unlawful. Certain terms used throughout this Presentation are defined in the Defined Terms section included at the ...