Group 1 - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1] - The investor has over 50 companies on their watchlist and has been investing personal capital for more than 7 years globally [1] - The investor holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer in Sweden [1] Group 2 - The investor aims to identify asymmetric investment opportunities to achieve market-beating returns through diligent research of small to mid-cap companies [1]

Core Viewpoint - Codere Online has filed its annual report on form 20-F for the year ended December 31, 2024, with the SEC, indicating a step towards compliance with Nasdaq Listing Rule 5250(c)(1) [1][2]. Company Overview - Codere Online is a leading online gaming operator in Spain and Latin America, launched in 2014 as part of the Codere Group, which is known for its casino operations [5]. - The company offers online sports betting and casino services through its website and mobile applications, operating in key markets including Spain, Mexico, Colombia, Panama, and Argentina [5]. Compliance and Regulatory Updates - By filing the 2024 20-F, the company believes it has regained compliance with Nasdaq Listing Rule 5250(c)(1), which may eliminate the need for a hearing regarding a delisting determination [2]. - The company is awaiting formal confirmation from Nasdaq regarding its compliance status [2]. Environmental Considerations - To reduce environmental impact, the company encourages shareholders to read the annual report in digital format, although hard copies are available upon request [4].

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].