Codere Online Luxembourg Q1 Earnings Call Highlights

Key Points

• Codere Online reported a strong Q1 with EUR 64.4 million in net gaming revenue, up 13% year-over-year, and adjusted EBITDA of EUR 6.0 million (margin ~9% vs 3% a year earlier).
• Growth was driven by core markets: Spain delivered EUR 20.5 million NGR (+16.4% YoY) and Mexico EUR 34.6 million NGR (+13.4% YoY), with Mexico now the company’s largest market and a major profitability contributor.
• Management maintained 2026 guidance of EUR 235–245 million NGR and EUR 15–20 million adjusted EBITDA, ended Q1 with EUR 56 million total cash (~EUR 51 million available), and keeps a share buyback program in place.

Codere Online Luxembourg NASDAQ: CDRO reported what executives described as a strong start to 2026, with first-quarter net gaming revenue rising 13% year over year and profitability improving meaningfully amid continued growth in its core markets, Spain and Mexico.

First-quarter results show revenue growth and improved profitability

CEO Aviv Sher said the company delivered “a solid first quarter” despite a “demanding operating and regulatory environment.” Consolidated net gaming revenue (NGR) totaled EUR 64.4 million, up 13% versus the first quarter of 2025 and up 6% sequentially.

The revenue mix remained consistent with recent quarters, Sher said, with casino representing 63% of total NGR and sports betting 37%.

CFO Marcus Arildsson said the higher revenue translated into a “further step-up in profitability.” Adjusted EBITDA was EUR 6.0 million in the quarter, compared with EUR 1.8 million a year earlier. Arildsson added that adjusted EBITDA margin was “around 9% compared to 3% in the first quarter of 2025.”

Spain and Mexico drive performance

Arildsson attributed the year-over-year NGR growth primarily to Spain and Mexico. In Spain, he said NGR increased by EUR 3.6 million year over year to EUR 20.5 million, representing 16.4% growth. In Mexico, NGR rose by EUR 4.1 million to EUR 34.6 million, up 13.4%, which Arildsson said “further consolidates Mexico as our largest market and the key growth driver.”

For other markets—including Colombia, Panama, and the city of Buenos Aires—Codere Online generated EUR 4.4 million of NGR, which Arildsson said was “broadly stable year-over-year,” while noting “encouraging trends both in Panama and Colombia.”

On an adjusted EBITDA basis, Arildsson said Spain contributed EUR 7.0 million in the quarter, up 27% year over year, while Mexico delivered EUR 2.9 million, an increase of “over 60% year-over-year” as Mexico “continues to inflict towards profitability.” He added that undistributed and headquarters costs were “slightly lower” at EUR 5.0 million despite higher revenue, citing cost discipline and operating leverage.

In the Q&A, Sher said Spain’s performance also benefited from market conditions and execution. He pointed to broad market growth reported by the regulator last year, continued optimization of acquisition “to a higher value,” “strong technology stability,” and a “favorable” trading margin in the quarter with “a lot of surprises along the way.” Sher said he believes the positive trend in Spain can continue.

Customer growth, higher CPA, and marketing efficiency

Operationally, Sher said results were driven by an expanding active customer base. Average monthly active customers reached approximately 183,000, up 14% year over year. Average monthly spend per active customer was EUR 117, about 1% below the prior-year quarter, which Sher said reflected a “broader and more diversified customer base.”

Customer acquisition totaled approximately 90,000 first-time depositors (FTDs), with an average cost per acquisition (CPA) of EUR 212, which increased both year over year and sequentially. Sher said the increase reflected a more competitive marketing environment, particularly in core markets, and a deliberate mix shift toward “higher value cohorts and channels.” Arildsson said retention and reactivation improvements drove engagement, while acquisition stayed “flat at around 90,000 FTDs.”

Marketing spend was EUR 25.0 million, up EUR 1.2 million from the prior-year quarter, though Arildsson noted it was three percentage points lower as a percentage of NGR.

In Mexico, Arildsson said average monthly actives grew about 20% year over year to around 98,000. However, he noted active customer levels were slightly lower sequentially and “have continued to decline into the second quarter,” which he said was expected due to “tighter promotional rules aimed at reducing the participation of bonus hunters.” Arildsson said these players had limited impact on NGR but “polluted our customer database and made segmentation more complex,” adding the change should improve customer quality ahead of the World Cup.

Arildsson also highlighted a “content partnership with a leading television broadcaster” that provides brand exposure immediately after goals during football games. He described it as effective for “reach and visibility,” and said it aligns with the company’s focus on “efficient, high-impact opportunities” rather than pursuing more expensive World Cup-related content.

Outlook maintained; executives discuss World Cup expectations and margins

Management maintained its full-year 2026 guidance. Sher said the company continues to expect full-year NGR of EUR 235 million to EUR 245 million and adjusted EBITDA of EUR 15 million to EUR 20 million. He described the approach as prudent given regulatory and tax considerations, adding that if trends and execution remain consistent, management would “expect to visit our outlook after the first half of the year.” Arildsson similarly said the company would consider revisiting guidance after second-quarter results if favorable trends persist.

Asked about the World Cup’s impact, Arildsson said prior events have not had a “tremendous” effect on NGR, though the company expects some uplift in activity with “a limited impact” on financials and does not expect a “very substantial impact” on figures.

On longer-term margins, Arildsson said marketing spend is a key driver and indicated that reaching double-digit EBITDA margins would likely require marketing to fall below 30% of NGR under the current cost structure. Guillermo Lancha, Director of Investor Relations and Communications, added that marketing is “pretty much entirely discretional,” and that higher margins could be achieved by reducing investment, though management’s focus is “sustainable growth in EBITDA” with marketing as a percentage of NGR decreasing organically over time. Sher said the company aims to balance revenue growth and EBITDA to “generate the highest company value.”

Cash position, capital allocation, competition, AI, and Colombia

Arildsson said Codere Online ended the quarter with EUR 56 million in total cash, with approximately EUR 51 million available. He also noted a “structured negative working capital position” of EUR 22 million, about 10% of last-twelve-months NGR, which he said supports cash generation. The company generated EUR 6.5 million of cash flow in the first quarter, and Arildsson said management is encouraged by its ability to convert adjusted EBITDA into cash over time, while acknowledging quarter-to-quarter timing can vary.

On capital allocation, Sher said the company did not repurchase shares in the first quarter under its buyback plan, but the program remains in place through the end of 2026. Executive Vice Chairman Moshe Edree said the board provides guidelines and that beyond marketing there was “nothing substantial” brought to the board, adding the company remains focused on maintaining ROI and CAC efficiency in its major markets. Arildsson added that a “very substantial portion” of cash is invested in the business as working capital, and that buybacks remain one lever to return capital to shareholders as cash accumulates. He also said the company is looking at “certain expansion opportunities,” including potentially entering other markets, though Sher later said there are “currently no plans for new markets.”

In Mexico, Sher addressed a question about reported competitor entry, saying Codere Online had seen announcements regarding Stake.com but had not yet observed its presence “on TV or on Google PPC.” He said the company was not currently seeing pressure on customer acquisition cost or lifetime value from that development and emphasized Codere Online’s compliance with regulations and taxes in Mexico.

On artificial intelligence, Sher said the company has not implemented AI “in the core business” and has not seen “AI trading benefits” yet. However, he said AI tools are being used in supporting functions, including customer service and some outbound calls, with “good results.” Edree added that the company has engaged with Google Israel to support implementing Google-related advertising tools into Codere Online’s systems, while Sher said it remains early and the company expects clearer developments in “two more quarters.”

In Colombia, Sher said a new 16% tax structure allows Codere Online to continue operating and reactivating its existing database, but “doesn’t allow us to really invest again into marketing.” He said management is watching the country’s upcoming elections and hopes for a more favorable environment that could support renewed investment, adding that the company has been encouraged by the results of database reactivation.

About Codere Online Luxembourg NASDAQ: CDRO

Codere Online Luxembourg SA is a publicly traded company incorporated under the laws of Luxembourg and listed on the Nasdaq Stock Market under the ticker CDRO. Established in December 2020 as a spin-off of Grupo Codere’s digital operations, Codere Online leverages the heritage and infrastructure of its Spanish parent to deliver a dedicated online gaming and sports betting platform. Headquartered in Luxembourg City, the company operates through locally licensed subsidiaries in multiple jurisdictions.

The company’s core business revolves around an integrated online sportsbook and casino offering.

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