CDROW — Codere Online Luxembourg, S.A.

Summary of Codere Online Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Gaming Revenue (NGR): EUR 224 million for the full year, with Q4 NGR at EUR 60 million, a 15% increase year-over-year.
• Adjusted EBITDA: EUR 13.8 million for the year, more than double from EUR 6.4 million in 2024; Q4 adjusted EBITDA was EUR 6.7 million, up from EUR 1.9 million in Q4 2024.
• Active Customers: Average monthly actives reached 177,000, a 20% increase year-over-year.
• Customer Acquisition: 89,000 first-time depositors acquired in Q4 at an average cost per acquisition (CPA) of EUR 166, the lowest since early 2023.
• Cash Position: Ended 2025 with EUR 50 million in total cash, EUR 45 million of which is available.

2. Strategic Updates and Business Highlights

• Market Performance: Strong growth driven by Mexico (31% year-over-year NGR growth) and Spain (7% growth). Casino games accounted for 64% of total NGR.
• Share Buyback Program: Continued execution with approximately 391,000 shares repurchased for around $2.7 million.
• Product Development: Launched a poker app in Mexico and plans to introduce bingo to enhance customer retention and engagement.

3. Forward Guidance and Outlook

• 2026 Guidance: Projecting NGR between EUR 235 million to EUR 245 million and adjusted EBITDA between EUR 15 million and EUR 20 million, reflecting a growth of approximately 7% and over 25% respectively at the midpoint.
• Marketing Strategy: Plans to maintain marketing investment levels similar to 2025, particularly in anticipation of the World Cup, while optimizing for profitability.

4. Bad News, Challenges, or Points of Concern

• Regulatory Environment in Mexico: Ongoing uncertainty regarding federal regulations and tax hikes, which could impact profitability. The company noted that two major competitors were shut down due to regulatory issues.
• Colombian Market: Revenue declined due to a 19% tax on deposits, which expired late in 2025. The company is cautious about future investments until the VAT removal is confirmed as permanent.
• Competitive Pressures: The market remains competitive, particularly in Spain, though the company has stabilized its promotional strategies.

5. Notable Q&A Insights

• Spain's Competitive Landscape: CEO Aviv Sher indicated that while Spain remains competitive, the company has stabilized its promotional activities and is seeing growth.
• Mexico's Regulatory Challenges: Sher mentioned that the regulatory framework is stalled, with no new updates on federal regulations, but noted that online business remains unaffected by cartel-related issues.
• Impact of Tax Hikes: CFO Marcus Arildsson acknowledged the negative impact of the tax increase in Mexico but expressed confidence in the company's ability to mitigate these effects through operational efficiencies.
• Future Investments: The company plans to focus on its core markets (Spain and Mexico) rather than expanding into new regions, especially ahead of the World Cup.

This summary encapsulates the key points from the earnings call, highlighting Codere Online's financial performance, strategic initiatives, and outlook while addressing challenges and competitive dynamics in the market.