Codere Online’s Earnings Call: Growth Amid Challenges

Codere Online ((CDRO)) has held its Q1 earnings call. Read on for the main highlights of the call.

Codere Online’s recent earnings call presented a balanced sentiment, highlighting both achievements and challenges. The company reported revenue growth and consistent positive adjusted EBITDA, while also addressing issues such as Nasdaq compliance and currency impacts. Despite these hurdles, the growth in active users and strategic initiatives like the share buyback plan suggest a resilient outlook for the company.

Net Gaming Revenue Growth

Codere Online reported a net gaming revenue of €57 million for Q1 2025, marking an 8% increase from the previous year. In constant currency terms, this would have been a 17% increase, reaching €62 million. This growth underscores the company’s ability to expand its market presence despite currency fluctuations.

Positive Adjusted EBITDA

The company achieved a positive adjusted EBITDA of €1.8 million, marking its fifth consecutive quarter of positive results. This consistency in profitability highlights Codere Online’s effective cost management and operational efficiency.

Increase in Active Users and First-Time Depositors

Codere Online saw a 13% increase in average monthly active users and a 21% rise in first-time depositors, totaling 91,000 in the quarter. This growth indicates successful user acquisition strategies and a strengthening customer base.

Share Buyback Plan

The company initiated a one-year share buyback plan for up to $5 million, having repurchased around 68,000 shares for approximately $0.5 million so far. This move reflects confidence in the company’s future prospects and a commitment to enhancing shareholder value.

Mexico Market Performance

In Mexico, net gaming revenue grew by 15% to €30 million. On a constant currency basis, the growth would have been a significant 34%, showcasing strong market performance despite currency headwinds.

Nasdaq Compliance Issues

Codere Online is facing potential delisting from Nasdaq due to not filing the 2024 annual report by the deadline. However, the company expects to regain compliance by the end of May, indicating proactive measures to address regulatory challenges.

Impact of Weak Mexican Peso

The devaluation of the Mexican peso resulted in a €5 million negative impact on net gaming revenue for the quarter. This highlights the challenges posed by currency volatility in international markets.

Lower Player Spend

The average monthly spend per active customer dropped by 5% to €118, attributed to lower player values in new acquisition channels. This decline suggests a need for strategies to enhance player engagement and spending.

Flat Revenue in Spain

Net gaming revenue in Spain remained flat at €22 million, affected by a competitive environment and lower player values. This stagnation underscores the challenges in maintaining growth in mature markets.

Negative Sports Betting Margin Impact

A lower sports betting margin in Mexico led to a €1.5 million negative impact on net gaming revenue. This points to the volatility and risk inherent in the sports betting segment.

Forward-Looking Guidance

Codere Online reiterated its full-year guidance, expecting net gaming revenue between €220 million and €230 million, and adjusted EBITDA ranging from €10 million to €15 million. Despite challenges, the company remains optimistic about its growth trajectory, supported by strong performance in key markets and strategic initiatives.

In conclusion, Codere Online’s earnings call reflected a mixed sentiment, balancing achievements with challenges. The company’s growth in revenue and active users, alongside strategic initiatives like the share buyback plan, indicate a positive outlook. However, issues such as Nasdaq compliance and currency impacts present hurdles that the company is actively addressing. Overall, Codere Online’s strategic focus and market expansion efforts position it well for future growth.