CDROW — 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; in constant currency, it would have been EUR 61 million, a 12% increase.
• Adjusted EBITDA: Positive EUR 2.3 million, with a contribution of EUR 6.3 million from Spain, up 5% year-over-year.
• Active Customers: Increased by 7% to 85,000, primarily in Mexico, although average spend per customer decreased by 5%.
• First-Time Depositors (FTDs): Grew by 7% to 78,000.
• Cash Position: EUR 45 million total cash, with EUR 41 million available.
• Share Buyback: Approximately 106,000 shares repurchased for EUR 700,000.

2. Strategic Updates and Business Highlights:

• Regained compliance with NASDAQ listing requirements, alleviating prior uncertainties about public trading status.
• Focus on the Mexican market continues, with significant growth in active customers and a strong product mix favoring the Casino segment (61% of NGR).
• Marketing strategies have been adjusted to target lower Lifetime Value (LTV) players, leading to lower Customer Acquisition Costs (CAC).
• Successful marketing initiatives, including sponsorships, have contributed to customer engagement.

3. Forward Guidance and Outlook:

• Expecting full-year NGR between EUR 220 million and EUR 230 million and adjusted EBITDA in the range of EUR 10 million to EUR 15 million.
• Anticipate reduced marketing spend in the second half of 2025, which should improve EBITDA generation.
• Positive outlook for the Mexican peso, which may enhance revenue in the latter half of the year.

4. Bad News, Challenges, or Points of Concern:

• Mexican Peso Devaluation: A significant 19% decline in the peso negatively impacted NGR by EUR 5.7 million.
• Colombia Market Struggles: The introduction of a value-added tax (VAT) on player deposits has led to a 40% decline in expected revenues, causing operational challenges.
• Competitive Pressures in Spain: The reintroduction of welcome bonuses has intensified competition, leading to a more selective promotional strategy.
• Seasonal Variability: The company noted seasonality impacts on sports betting, although some events (e.g., Club World Cup) provided temporary boosts.

5. Notable Q&A Insights:

• The competitive landscape in Spain remains challenging, with no immediate regulatory changes expected.
• Marketing strategies in Mexico are evolving, focusing on optimizing channels and targeting specific player segments.
• Concerns about the viability of the Colombian market persist if the VAT remains in place, with ongoing evaluations of operational strategies.
• Discussions about share repurchases are ongoing, reflecting a growing cash position and improving business performance.

Overall, Codere Online's Q2 2025 results reflect a mixed performance with solid growth in Mexico but significant challenges in Colombia and competitive pressures in Spain. The company remains optimistic about its future outlook, particularly in light of expected improvements in marketing efficiency and currency stabilization.