ere Online Luxembourg(CDRO) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Codere Online reported a record Net Gaming Revenue (NGR) of EUR 224 million for the full year 2025, with Adjusted EBITDA reaching EUR 13.8 million, more than double the previous year [4][12] - In Q4 2025, NGR was EUR 60 million, a 15% increase compared to Q4 2024, marking the highest quarterly NGR in the company's history [5][10] - Adjusted EBITDA for Q4 2025 was EUR 6.7 million, significantly up from EUR 1.9 million in Q4 2024, resulting in an EBITDA margin of approximately 11% [12][13] Business Line Data and Key Metrics Changes - Casino operations accounted for 64% of total NGR in Q4 2025, while sports betting contributed 36%, consistent with previous quarters [5] - The average monthly active users reached approximately 177,000 in Q4 2025, a 20% increase year-on-year, indicating strong customer acquisition and retention [6][12] - The average monthly spend per active user was EUR 114, about 4% lower than the same period last year, reflecting a more diversified customer base [6] Market Data and Key Metrics Changes - In Mexico, NGR grew by 31% year-on-year to EUR 32.8 million, driven by a significant increase in active customers [10][15] - Spain's NGR increased by 7% to EUR 24.5 million, supported by a 14% rise in the number of active customers [14] - Other markets, including Colombia, Panama, and Buenos Aires, contributed EUR 3.5 million, a 25% decline from the previous year due to a 19% tax on deposits in Colombia [11] Company Strategy and Development Direction - The company plans to guide NGR for 2026 in the range of EUR 235 million to EUR 245 million, reflecting confidence in continued growth despite recent regulatory changes [9][18] - Codere Online aims to optimize marketing efficiency and maintain profitability while investing in customer acquisition, particularly in Mexico, which is seen as a key growth market [8][19] - The company is focused on leveraging its brand and expanding its customer base in Mexico ahead of the World Cup, while also maintaining a disciplined approach to marketing spend [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's ability to grow profitability in 2026 and beyond, despite challenges faced in 2025 [4][9] - The regulatory environment in Mexico remains uncertain, with ongoing discussions about federal regulations and tax implications, but management does not foresee significant risks to revenue generation [26][34] - The company is optimistic about the impact of the World Cup on its operations and marketing strategies, anticipating increased engagement and customer acquisition [19][34] Other Important Information - The company has executed a share buyback program, purchasing approximately 391,000 shares for around $2.7 million, reflecting management's confidence in the business's medium-term outlook [8] - Codere Online ended 2025 with EUR 50 million in total cash, with EUR 45 million available for operations and investments [16] Q&A Session Summary Question: How competitive is Spain currently on promotional activity, and are margins stabilizing in that market? - Management noted that Spain remains competitive but is stabilizing, with growth in the customer base achieved through current promotional activities [23][24] Question: Can you update us on the regulatory environment in Mexico? - Management indicated that there is no new information on federal regulations, and while two major competitors have been shut down, online business remains unaffected [26][27] Question: Can you walk us through the financial impact of the Mexico tax hike on guidance? - Management acknowledged the tax increase as a negative factor but emphasized that they have implemented mitigation measures to minimize its impact on revenue and EBITDA [33][34] Question: What are the implications of the VAT tax removal in Colombia? - Management is cautious about investing in Colombia until it is confirmed whether the VAT removal is permanent, but they are seeing positive trends in player engagement [42][43] Question: What competitors are rumored to be entering the Mexican market? - Management mentioned several companies, including Hard Rock and Sportium, as potential entrants into the Mexican market, but noted that the competitive landscape remains stable for now [54][55]