CDRO — Codere Online Luxembourg, S.A.

Summary of Codere Online Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Gaming Revenue (NGR): Achieved a record EUR 224 million for the full year, with Q4 NGR at EUR 60 million, a 15% increase year-on-year.
• Adjusted EBITDA: Reached EUR 13.8 million for the year, more than double the previous year, with Q4 adjusted EBITDA at EUR 6.7 million (11% margin).
• Active Customers: Average monthly active users increased by 20% to approximately 177,000 in Q4.
• Customer Acquisition: Acquired 89,000 first-time depositors in Q4 at a cost per acquisition (CPA) of EUR 166, the lowest since early 2023.

2. Strategic Updates and Business Highlights

• Market Performance: Strong growth driven by Mexico (31% NGR increase) and Spain (7% NGR increase). Casino games accounted for 64% of total NGR.
• Customer Engagement: Continued focus on improving customer retention and acquisition efficiency, with a diversified portfolio including a higher proportion of Mexican players.
• Share Buyback Program: Continued execution with approximately 391,000 shares repurchased for around $2.7 million, reflecting management's confidence in the business outlook.
• Product Expansion: Launched a poker app in Mexico and plans to introduce bingo to enhance customer engagement.

3. Forward Guidance and Outlook

• 2026 Guidance: Projected NGR between EUR 235 million and EUR 245 million, and adjusted EBITDA between EUR 15 million and EUR 20 million, reflecting a 7% growth in revenue and over 25% growth in EBITDA at the midpoint.
• Marketing Strategy: Plans to maintain marketing investments in line with 2025, particularly in anticipation of the World Cup, while focusing on profitability.

4. Bad News, Challenges, or Points of Concern

• Colombian Market: Revenue from Colombia decreased by 25% due to a 19% tax on deposits, which expired late in the year. Uncertainty remains regarding the permanence of the VAT removal.
• Regulatory Environment in Mexico: Ongoing discussions about federal regulations are stalled, and two major competitors have shut down due to regulatory issues, creating uncertainty in the market.
• Tax Hike Impact: The recent tax increase in Mexico is expected to have a negative impact on EBITDA, although management believes they can mitigate most effects.

5. Notable Q&A Insights

• Competitive Landscape in Spain: The market remains competitive but has stabilized, allowing Codere to grow its customer base effectively.
• Regulatory Updates: No significant changes in the regulatory framework in Mexico, with ongoing concerns about cartel activities not affecting online operations.
• Future Investments: Management indicated a preference to focus on existing markets (Mexico and Spain) rather than expanding into new regions, particularly ahead of the World Cup.
• Marketing Spend Strategy: While marketing costs are expected to remain high in Mexico due to growth phase dynamics, there is a focus on improving CPA and overall efficiency.

This summary captures the key elements from Codere Online's Q4 2025 earnings call, highlighting both achievements and challenges as the company navigates its growth trajectory.