CDRO — Codere Online Luxembourg, S.A.

Codere Online Q2 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Gaming Revenue (NGR): EUR 55 million, flat year-over-year; constant currency growth of 12% to nearly EUR 61 million.
• Adjusted EBITDA: Positive EUR 2.3 million, up EUR 1 million from Q2 2024, driven by cost containment.
• Average Monthly Active Customers: Increased by 7%, with a total of 85,000 active customers, although average spend per customer decreased by 5% due to currency devaluation.
• First-Time Depositors (FTDs): Grew by 7% to 78,000.
• Cash Position: EUR 45 million total cash, with EUR 41 million available; generated EUR 7.5 million in available cash in H1 2025.

2. Strategic Updates and Business Highlights

• Market Compliance: Regained compliance with NASDAQ listing requirements, alleviating previous uncertainties regarding public trading status.
• Product Mix: Casino segment contributed 61% to total NGR, indicating a stabilization trend.
• Marketing Strategy: Focused on acquiring lower Lifetime Value (LTV) players with lower Customer Acquisition Costs (CAC), adapting strategies based on performance analysis.
• Share Buyback Program: Approximately 106,000 shares repurchased for EUR 700,000.

3. Forward Guidance and Outlook

• 2025 Guidance: Expected NGR between EUR 220 million and EUR 230 million, with adjusted EBITDA projected between EUR 10 million and EUR 15 million.
• Marketing Spend: Anticipated to decrease in the second half of the year, contributing to improved EBITDA generation.

4. Bad News, Challenges, or Points of Concern

• Currency Devaluation: The Mexican peso's devaluation had a significant negative impact on NGR, estimated at EUR 5.7 million.
• Competitive Landscape: Increased competition in Spain due to reintroduction of welcome bonuses and a more aggressive promotional environment.
• Colombia Market Struggles: Imposition of a VAT on player deposits has severely impacted revenue, leading to a significant decline in NGR and necessitating cost-cutting measures to maintain breakeven.
• Overall Market Pressures: The competitive environment and regulatory changes pose ongoing risks to growth and profitability.

5. Notable Q&A Insights

• Spain's Competitive Environment: The competitive landscape remains challenging, with no immediate regulatory changes expected. The company is adapting to maintain performance amidst aggressive competitor spending.
• Mexico's Growth: The strong growth in Mexico is attributed to a favorable competitive environment and effective marketing strategies, although higher media costs and competition are noted as potential future challenges.
• Colombia's Viability: The VAT's impact raises questions about the market's long-term viability; the company is reassessing its strategy in light of this challenge.
• Share Repurchase Strategy: Discussions are ongoing regarding the potential for increased share buybacks, reflecting confidence in the company's financial position and outlook.

This summary encapsulates the key points from Codere Online's Q2 2025 earnings call, highlighting financial performance, strategic initiatives, and challenges faced by the company.