Release Date: May 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Codere Online Luxembourg SA (CDRO, Financial) delivered EUR 57 million in net gaming revenue for Q1 2025, marking an 8% increase compared to Q1 2024.
- The company experienced a 13% increase in average monthly active users, contributing to revenue growth.
- First-time depositors increased by 21% to 91,000, indicating successful customer acquisition strategies.
- Codere Online Luxembourg SA (CDRO) achieved its fifth consecutive quarter of positive adjusted EBITDA, with a contribution of EUR 5.5 million from Spain and EUR 1.8 million from Mexico.
- The company has initiated a share buyback plan for up to EUR 5 million, demonstrating confidence in its financial position and future prospects.
Negative Points
- Codere Online Luxembourg SA (CDRO) is facing a potential delisting notice from NASDAQ due to delays in filing its 2024 annual report.
- Net gaming revenue was negatively impacted by a weaker Mexican peso, with a EUR 5 million headwind in Q1 2025.
- The average monthly spend per active customer dropped by 5% to EUR 118, indicating potential challenges in customer spending behavior.
- In Spain, net gaming revenue was flat compared to the prior year, reflecting increased competition and a challenging promotional environment.
- The company experienced a lower sports betting margin in Mexico, impacting net gaming revenue by approximately EUR 1.5 million.
Q & A Highlights
Q: Can you explain the competitive environment and how you are acquiring more users at a lower cost?
A: Aviv Sher, CEO: We are constantly testing new traffic sources and experimenting with different channels. Recently, we had a successful experiment that resulted in reduced CPA and a higher number of players. However, the spend per customer was lower, and the revenue impact was not as high as expected. We anticipate returning to our planned player acquisition and values in the next quarter.
Q: What is driving the flat net revenue growth in Spain, and are there any efforts to reintroduce marketing restrictions?
A: Oscar Iglesias, CFO: The flat growth is due to the reintroduction of the welcome bonus and other promotional strategies. We are seeing positive trends by focusing on higher-value customers. The government is still pursuing ways to reintroduce restrictions, but nothing has been finalized yet. If restrictions are reintroduced, it would be beneficial for us and the sector.
Q: Can you elaborate on the average revenue per active player being down?
A: Oscar Iglesias, CFO: In Spain, the spend per active player is lower due to the competitive environment. In Mexico, we tested new acquisition channels with lower costs but also lower player values. We are still evaluating the long-term impact of these new channels.
Q: Are there any market dynamics in other regions that might lead to increased investment?
A: Aviv Sher, CEO: We see improvements in Panama and have expectations to mitigate issues in Colombia. We plan to increase investment in Mexico to reach our targets. For now, we are staying defensive with our business plan, but we expect to be more aggressive next year with the World Cup.
Q: How do you expect to achieve your full-year guidance geographically?
A: Oscar Iglesias, CFO: We expect a pickup in most markets, with Spain and Mexico being primary contributors. Panama is performing well, and we have made product changes to attract customers. In Argentina, we have reduced expenses by ending our sponsorship with River Plate, which will help meet our EBITDA guidance.
Q: How do you view new markets in light of your parent company's acquisition in Italy?
A: Moshe Edree, Executive Vice Chairman: Our focus remains on Mexico, where we see significant growth potential. The group's strategy in Italy is separate from ours. We aim to maintain our market share in Mexico and benefit from omni-channel activities with the group.
Q: Do you expect Spain to return to revenue growth for the rest of the year?
A: Oscar Iglesias, CFO: Yes, we expect to resume year-on-year growth in Spain. The KPIs are positive enough to give us confidence in our results.
Q: Can you explain the dynamics of the share repurchase program?
A: Oscar Iglesias, CFO: The shareholder authorization is broader, allowing the board to decide on execution. Currently, the board has approved a $5 million buyback plan, but it can change over time within the broader authorization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
