Codere Online Luxembourg, S.A. (CDRO) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with increased FTDs, improved marketing efficiency, and robust revenue growth in key markets like Mexico. Despite regulatory challenges, the company has effective strategies in place, such as leveraging cost efficiencies and focusing on core markets. The Q&A reveals cautious optimism, with management addressing concerns about tax impacts and competitive dynamics. Overall, the positive financial metrics, strategic focus on growth markets, and effective risk management suggest a positive outlook for the stock price.
Key Financial Performance
Net Gaming Revenue (NGR) EUR 224 million for the full year 2025, a record high, with a 15% increase in Q4 2025 compared to Q4 2024. The growth was driven by a 31% increase in Mexico and a 7% increase in Spain, attributed to a reacceleration in top-line growth and strong customer acquisition.
Adjusted EBITDA EUR 13.8 million for the full year 2025, more than double the EUR 6.4 million in 2024. Q4 2025 adjusted EBITDA was EUR 6.7 million, EUR 4.8 million higher than Q4 2024, reflecting operating leverage, marketing efficiency, and cost discipline.
Active Customer Base 177,000 average monthly active customers in Q4 2025, a 20% increase year-over-year, driven by a strong acquisition funnel and improved retention.
Average Monthly Spend Per Active EUR 114 in Q4 2025, approximately 4% lower than Q4 2024, due to a larger and more diversified customer portfolio, including a higher proportion of Mexican players.
First-Time Depositors (FTDs) 89,000 acquired in Q4 2025, a 22% increase year-over-year, with an average CPA of EUR 166, the lowest since early 2023, reflecting optimized acquisition strategies.
Marketing Expense EUR 21.4 million in Q4 2025, slightly below the previous year in absolute terms and significantly lower as a percentage of NGR, indicating improved marketing efficiency.
Net Gaming Revenue by Country Mexico: EUR 32.8 million in Q4 2025, a 31% increase year-over-year. Spain: EUR 24.5 million in Q4 2025, a 7% increase year-over-year. Other markets (Colombia, Panama, Buenos Aires): EUR 3.5 million in Q4 2025, a 25% decrease year-over-year due to a 19% tax on deposits in Colombia.
Cash Flow EUR 13.4 million generated before share repurchases and FX impact in 2025, with available cash increasing by EUR 10 million to EUR 45 million by year-end, supported by negative working capital and growing scale.
EBITDA Margin 11% in Q4 2025, compared to less than 4% in Q4 2024, driven by cost structure improvements and operating leverage.
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Operating Highlights
Casino and Sports Betting: Casino accounted for 64% of total net gaming revenue in Q4 2025, with sports betting contributing 36%. Casino is highlighted as a key growth and engagement driver, especially in Mexico.
Mexico: Net gaming revenue grew by 31% year-on-year to EUR 32.8 million in Q4 2025. Active customers increased significantly, reaching over 100,000 for the first time in December 2025. Mexico is identified as the key growth engine for Codere Online.
Spain: Net gaming revenue increased by 7% year-on-year to EUR 24.5 million in Q4 2025. Active customers grew by 14% to 56,000, reflecting growth in a mature and tightly regulated market.
Customer Acquisition: Acquired 89,000 first-time depositors in Q4 2025 at an average CPA of EUR 166, the lowest since early 2023. Active monthly customers grew by 20% year-on-year to 177,000.
Marketing Efficiency: Marketing expenses were slightly below last year in absolute terms and significantly lower as a percentage of net gaming revenue, reflecting improved efficiency.
Profitability: Adjusted EBITDA for Q4 2025 was EUR 6.7 million, up from EUR 1.9 million in Q4 2024. Full-year adjusted EBITDA more than doubled to EUR 13.8 million in 2025.
Share Buyback Program: Approximately 391,000 shares were repurchased for $2.7 million under a $7.5 million authorized plan running through December 2026. This reflects confidence in the medium-term outlook.
2026 Outlook: Guidance for 2026 includes net gaming revenue of EUR 235-245 million and adjusted EBITDA of EUR 15-20 million, reflecting a focus on growth and profitability, particularly in Mexico during the World Cup year.
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Risk or Challenges
Regulatory and Tax Changes: Recent regulatory and tax changes in key markets, such as the 19% tax on deposits in Colombia, have negatively impacted revenue in those regions. Although the tax expired at the end of 2025, such changes create uncertainty and could affect future profitability.
Customer Value Decline: Player value from customers acquired in 2025 has been lower than in prior years, which could impact long-term revenue growth and profitability despite lower upfront CPA costs.
Competitive Landscape in Mexico: The competitive environment in Mexico requires significant marketing investment to capture opportunities, especially during the World Cup year. This could strain resources and impact profitability if not managed effectively.
Economic and Currency Risks: While the Mexican peso was stable in Q4 2025, currency fluctuations in the future could impact revenue and profitability in key markets like Mexico.
Operational Efficiency: Although marketing efficiency has improved, maintaining this trend while scaling operations and managing costs remains a challenge.
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Guidance & Outlook
Net Gaming Revenue (NGR) Guidance for 2026: The company expects net gaming revenue in 2026 to be in the range of EUR 235 million to EUR 245 million, representing approximately 7% growth compared to 2025.
Adjusted EBITDA Guidance for 2026: Adjusted EBITDA is projected to be between EUR 15 million and EUR 20 million, reflecting more than 25% growth at the midpoint compared to 2025.
Marketing Investment in 2026: Marketing investment is expected to remain broadly in line with 2025 levels, with a focus on leveraging the World Cup year to reinforce the brand and expand the customer base, particularly in Mexico.
Operating Leverage and Marketing Efficiency: The company anticipates continued evidence of operating leverage, with marketing as a percentage of net gaming revenue expected to trend down over time while still supporting top-line growth.
Mexico Market Focus: Mexico is identified as the key growth market, with plans to capitalize on the World Cup opportunity to further expand the customer base and reinforce the brand.
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Shareholder Return Plan
Share Buyback Plan: Codere Online has continued to execute on the share buyback program announced last year. As of now, approximately 391,000 shares have been repurchased for a total consideration of around $2.7 million. The program has a total authorized investment of $7.5 million and is set to run through December 31, 2026. The company views this as an attractive use of capital at current share price levels and a reflection of the Board and management's confidence in the medium-term outlook for the business.
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Key Q&A
Q:How competitive is Spain currently on promotional activity? Are margins stabilizing in that market?
A:Spain remains competitive, but the market is stabilizing. The company has seen two consecutive quarters of growth and has found effective promotional strategies to compete.
Q:Can you update us on the regulatory environment in Mexico and the impact of cartels on your business?
A:There is no progress on the federal regulatory framework in Mexico due to political issues. Two major competitors were shut down due to regulatory problems. The online business is unaffected by cartel activities, and marketing efforts remain unchanged. The government is expected to maintain a stable environment during the World Cup.
Q:What is the financial impact of the Mexico tax hike on guidance?
A:The tax hike is a negative factor, but mitigation measures like marketing adjustments and operational efficiencies are in place. Revenue generation is not at risk, and marketing investments will remain stable. There will be an EBITDA effect, but it is manageable, and the business is expected to grow.
Q:What changes have you observed in competitors' behavior following the Mexico tax hike?
A:Two major competitors have exited the market, and no significant new entrants have been observed. Some competitors are considering entering the market, but no changes in the advertising landscape have been noted yet.
Q:How does the change in player values in Mexico affect your geographic expansion and investment priorities?
A:The company sees improved ROI in Mexico due to lower CPA and stable player values. Investment will continue in core markets (Spain and Mexico) rather than expanding to new markets before the World Cup.
Q:What is your view on Colombia now that the VAT tax has been removed?
A:The company is cautious as it is unclear if the VAT removal is permanent. While player activity has improved, no additional investments will be made until the situation is clarified. Recent legislative changes have introduced a small additional tax, adding to the uncertainty.
Q:What is the long-term outlook for marketing as a percentage of revenue?
A:In Spain, marketing spend aligns with industry norms. In Mexico, the company is still in a growth phase, requiring higher marketing investments. Over time, as the market matures, marketing spend as a percentage of revenue is expected to decrease.
Q:Are there any assumptions about foreign exchange in the revenue guidance?
A:Yes, the guidance includes foreign exchange forecasts based on market observations and forward rates. Changes in exchange rates during the year will impact the guidance.
Q:Which competitors are rumored to be entering the Mexican market?
A:Rumored competitors include Hard Rock, VERSUS (R. Franco), Sportium with Ganabet, and local players like Big Bola. Novibet is also present but less prominent.
Q:What is the strategy for World Cup marketing spend?
A:Marketing spend will be spread evenly throughout the year, with no significant increase during the World Cup. The company aims to maintain consistent investment levels.
Q:Why was a poker app launched in Mexico, and are there plans for other products?
A:The poker app was launched as a supportive product to enhance the game portfolio and retention. Bingo is also being quietly launched. These products are not expected to become main revenue drivers but will support player engagement.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the permanence of the VAT removal in Colombia and its impact on investment decisions. They also provided limited clarity on the financial impact of the Mexico tax hike, offering general mitigation strategies without precise details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aires market
Arildsson Executive
CFO Arildsson
CPA EUR
EUR cash
EUR contribution
EUR gaming
EUR midpoint
Page EUR
Spain EUR
World Cup
brand
capital share
cash EUR
confidence
country
customer base
detail
efficiency
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gaming EUR
gaming line
leverage model
line end
line profitability
line quarter
market Mexico
outlook gaming
outlook marketing
percentage
portfolio
program
scale
share buyback
share repurchase
statement
strength
tax
CDRO Transcript
Codere Online Luxembourg, S.A. (CDRO) Q4 2025 Earnings Call Transcript
Positive2-26
The earnings call highlights strong financial performance with increased FTDs, improved marketing efficiency, and robust revenue growth in key markets like Mexico. Despite regulatory challenges, the company has effective strategies in place, such as leveraging cost efficiencies and focusing on core markets. The Q&A reveals cautious optimism, with management addressing concerns about tax impacts and competitive dynamics. Overall, the positive financial metrics, strategic focus on growth markets, and effective risk management suggest a positive outlook for the stock price.
Codere Online Luxembourg, S.A. (CDRO) Q2 2025 Earnings Call Transcript
Unknown8-1
The earnings call indicates mixed signals: stable NGR with currency impacts, a challenging Spanish market, and positive EBITDA. The Q&A highlights regulatory challenges and cautious optimism in Mexico. The share buyback and potential profitability improvements are positive, but concerns about Colombia's VAT impact and unclear guidance on its viability add uncertainty. Overall, the sentiment is balanced, leading to a neutral stock price expectation.
Codere Online Luxembourg, S.A. (CDRO) Q1 2025 Earnings Call Transcript
Unknown5-16
The earnings call presents a mixed outlook. While there is growth in key metrics like net gaming revenue and active users, challenges such as regulatory compliance issues, currency exchange risks, and competitive pressures in Spain temper optimism. The share buyback plan is a positive, but its limited execution so far reduces impact. The Q&A reveals management's lack of clarity on certain issues, which may raise investor concerns. Overall, the mixed signals and uncertainty result in a neutral stock price prediction.
Codere Online Luxembourg, S.A. (CDRO) Q3 2024 Earnings Call Transcript
Unknown11-27
The earnings call presents a mixed picture: strong net gaming revenue growth and improved EBITDA are positives, but the negative working capital and currency headwinds pose risks. The lack of a share buyback program and the cautious approach to hedging currency risk add uncertainty. The Q&A section reveals competitive pressures and management's non-specific answers on key issues, tempering optimism. Overall, the stock price is likely to remain stable, with no significant catalysts to drive a major move in either direction.
CDRO Report
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