ere Online Luxembourg(US:CDRO)2025-11-17 14:32Financial Data and Key Metrics Changes - The company reported EUR 52 million in net gaming revenue for Q3 2025, which was flat compared to the prior year despite facing headwinds [5][10] - Adjusted EBITDA was positive EUR 2.9 million, reflecting a nearly doubling compared to the prior year, driven by a EUR 4 million reduction in marketing spend [11][12] - On a constant currency basis, net gaming revenue would have grown by 3% [12] Business Line Data and Key Metrics Changes - The casino segment contributed 65% to total net gaming revenue in Q3, which is approximately 5 percentage points above normal levels, while sports betting margins declined [6][10] - The average monthly active customers increased by 11%, but the average monthly spend per active customer decreased by 10% due to the weaker Mexican peso [8][12] - The company acquired 85,000 first-time depositors (FTDs), a 26% increase year-over-year, with the lowest customer acquisition cost (CPA) since Q1 2023 at EUR 167 [8][10] Market Data and Key Metrics Changes - Net gaming revenue in Spain was EUR 22 million, a 5% increase from the prior year, while Mexico's revenue was flat at EUR 27 million, impacted by a nearly 5% devaluation of the peso [10][14] - The company noted a significant increase in average monthly active customers in Mexico, reaching 88,000, which is 39% higher than Q3 2024 [14] - The Colombian market saw a decline in net gaming revenue due to the impact of a value-added tax on deposits, with a EUR 1.3 million decrease in revenue [11][50] Company Strategy and Development Direction - The company plans to increase its share buyback program from $5 million to $7.5 million, reflecting confidence in the business outlook [9] - Management is analyzing the impact of a proposed increase in the gaming tax rate in Mexico from 30% to 50%, expected to take effect on January 1, 2026, and is considering strategies to mitigate its impact [15][16] - The company is focused on optimizing customer acquisition strategies and improving player value, particularly in Mexico, while also monitoring regulatory changes in Spain and Colombia [34][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to double-digit top-line growth in Q4 2025, with encouraging trends observed in recent months [6] - The company is optimistic about the potential benefits of the World Cup in 2026, which will be co-hosted by Mexico, and is preparing to leverage this opportunity [15] - Management acknowledged the challenges posed by the increased gaming tax in Mexico and the VAT in Colombia, indicating a cautious approach to future investments in these markets [15][50] Other Important Information - The company ended Q3 2025 with EUR 48 million in total cash, of which approximately EUR 43 million was available [17] - The company generated EUR 11.5 million of available cash in the first nine months of 2025, despite a negative FX impact [18] - The company reiterated its guidance for net gaming revenue between EUR 220 million and EUR 230 million for 2025 [18] Q&A Session Summary Question: Impact of higher tax rate in Mexico - Management is assessing strategies to mitigate the impact of the higher tax rate, which is expected to be approved soon [23][24] Question: AML crackdown in Mexico - Management has not experienced any direct impact from the AML crackdown and continues to operate within regulatory standards [27][28] Question: Customer acquisition costs and player value - Management noted a correlation between CPA and player lifetime value, indicating ongoing optimization efforts to improve returns [33][34] Question: Marketing strategy in Spain - Management is optimistic about the marketing strategy in Spain, noting positive trends since the reintroduction of welcome bonuses [44][45] Question: VAT situation in Colombia - Management is monitoring the VAT situation in Colombia, indicating that the current tax structure is challenging for profitability [50][53]