Codere Online Q1 2026 Earnings Call - EBITDA Surges as Mexico and Spain Drive Top-Line Growth and Margin Expansion

Operator: Ladies and gentlemen, thank you for joining us, and welcome to the Codere Online 1st quarter 2026 financial results presentation. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand. I will now hand the conference over to Guillermo Lancha, Director of Investor Relations and Communications at Codere Online. Please go ahead.

Guillermo Lancha, Director of Investor Relations and Communications, Codere Online: Thanks, operator, and welcome everyone to Codere Online’s earnings call for the first quarter of 2026. Today, you will hear from our CEO, Aviv Sher, and CFO, Marcus Arildsson. Our Executive Vice Chairman, Moshe Edree, will also join us in the Q&A session. Please note that figures reflected in today’s presentation are preliminary and unaudited and include certain non-IFRS financial metrics, which should be considered in addition to our IFRS results. Reconciliations and further details are available in the appendix. During this call, we will make forward-looking statements which are subject to risks and uncertainties. While these statements reflect our current expectations, we undertake no obligation to update them after this call. A replay and transcript will be available at codereonline.com, where investors can also sign up for email alerts.

Additionally, I would like to draw your attention to our recently filed annual report, where you can find detailed financial and other information regarding the company. With that, I will go ahead and pass the call on to Aviv.

Aviv Sher, Chief Executive Officer, Codere Online: Thanks, Guillermo, and thank you all for joining us today. We are very pleased with how we started 2026, delivering a solid first quarter that reflects continued momentum in the business and good execution across our key markets, despite a still demanding operating and regulatory environment. Starting with the highlights for the first quarter of 2026 on page 8, we delivered a consolidated net gaming revenue of EUR 64.4 million, which represent a 13% increase versus first quarter of last year and 6% sequentially. This growth was supported by a healthy underlying trends across both casino and sports betting, and confirms that the top line re-acceleration we saw in the second half of 2025 has carried into the new year.

Looking at the revenue mix, casino once again accounted for the majority of our net revenue in the quarter, representing 63% of the total, with the remaining 37% coming from sports betting. This mix is very consistent with the recent quarters and continues to reflect the importance of casino as a key engagement and growth driver for our business. Turning to the operating KPIs, performance in this quarter was driven by further expansion of our active customer base. Average monthly active customers reached approximately 183,000 in Q1, which is 14% higher than the same period last year. This reflects continued strength in acquisition, combined with a solid retention across our portfolio. Average monthly spend per active customer was EUR 117, around 1% below Q1 of last year.

As we have mentioned before, this is consistent with a broader and more diversified customer base and does not change our positive view on the quality and long-term value of the players we are acquiring. Although we will cover later, we are working to optimize our active customer base in Mexico. On the acquisition side, during the quarter, we have acquired approximately 90,000 FTDs at an average CPA of EUR 212, which represents an increase both year-over-year and sequentially. This reflects a combination of more competitive marketing environment at the start of the year, particularly in our core markets, and deliberate shift in mix towards higher value cohorts and channels. As in prior periods, we remain disciplined in our approach and continue to prioritize customer quality, profitability, and lifetime value over short-term volume.

With respect to capital allocation, we did not re-repurchase any shares under our share buyback plan during the first quarter. As a reminder, the program remains in place through the end of 2026, and we will continue to evaluate repurchases based on market condition and business priorities. Finally, looking ahead, our outlook for the full year of 2026 remain unchanged. We continue to guide Net Gaming Revenue in the range of EUR 235 million-EUR 245 million and adjusted EBITDA between EUR 15 million-EUR 20 million. This guidance reflects both the strong start of the year, and our prudent approach to planning, taking into account the regulatory and tax environment in our markets.

As always, we will continue to assess performance as the year progresses, and if current trends and execution remain consistent, we would expect to visit our outlook after the first half of the year. Overall, we remain confident that our ability to deliver continued growth in both revenue and profitability in 2026. With that, I will now hand the call over to Marcus to walk you through the financial performance in more details.

Marcus Arildsson, Chief Financial Officer, Codere Online: Thanks, Aviv. Hello, everyone. If we turn to slide 10

You can see our consolidated net gaming revenue and adjusted EBITDA performance by country for the first quarter of 2026. Starting with NGR, in Q1, we delivered EUR 64.4 million, representing, as Aviv mentioned, 13% year-over-year increase compared to the first quarter of 2025, driven primarily by our two core markets, Spain and Mexico, both which delivered solid performance. This also represented a 6% sequential increase versus an already very strong fourth quarter of 2025. In Spain specifically, NGR increased by EUR 3.6 million year-over-year to EUR 20.5 million, representing a growth of 16.4% and reflected a continued strong underlying trend.

In Mexico, NGR revenue grew by EUR 4.1 million to EUR 34.6 million, an increase of 13.4% versus Q1 of last year, which further consolidates Mexico as our largest market and the key growth driver. In other markets, which include, as you know, Colombia, Panama, and the city of Buenos Aires, we generated EUR 4.4 million of Net Gaming Revenue in the quarter, broadly stable year-over-year. As expected, growth in these markets remain more volatile and continues to represent a smaller portion of the overall group, although we’re seeing encouraging trends both in Panama and Colombia. Looking at the last 12 months, Net Gaming Revenue reached EUR 231.6 million, up 7.3% versus the prior period.

Spain and Mexico continue to account for the vast majority of the business, together representing over 93% of LTM net gaming revenue, with Mexico contributing approximately 53% and Spain approximately 41%. This strong top-line performance translated into a further step-up in profitability. In Q1 2026, we delivered adjusted EBITDA of EUR 6 million compared to EUR 1.8 million in the first quarter of last year. Spain contributed EUR 7 million of adjusted EBITDA in the quarter, up 27% year-over-year, reflecting continued operating leverage, while Mexico delivered EUR 2.9 million of adjusted EBITDA, also representing an increase of over 60% year-over-year as the country continues to inflict towards profitability.

Our undistributed and headquarter costs were slightly lower in the quarter at EUR 5 million, despite the increase in revenues, reflecting ongoing cost discipline and operating leverage as the business scales. On an LTM basis, adjusted EBITDA reached EUR 18 million compared to EUR 6.5 million a year ago, which already positions us in the upper part of our outlook range for the full year. Overall, the first quarter shows a solid start to the year, with continued revenue growth in our core markets and further improvements in profitability, consistent with the outlook Aviv mentioned earlier. Turning to our consolidated P&L on page 11, marketing spends was EUR 25 million in the quarter, EUR 1.2 million above Q1 of last year. Noteworthy, it was 3 percentage points lower as a percentage of NGR.

The rest of our operating expenses, namely platform and content costs, gaming taxes, and personnel, were in line, if not below the growth in NGR, resulting in adjusted EBITDA of EUR 6 million in the quarter. This translated into an adjusted EBITDA margin of around 9% compared to 3% in the first quarter of 2025. Turning to page 12, we can see that the operating trends behind our Q1 performance. NGR increased 13% year-on-year, supported primarily by a continued expansion of our active customer base. Average monthly actives reached approximately 183,000 players in the quarter, up 14% compared to Q1 as of last year. This increase in player engagement was primarily driven by improvements in retention and reactivation of players as acquisition remained flat at around 90,000 FTDs, in line with recent quarters.

The cost per acquisition increased approximately EUR 212 in the quarter. As discussed earlier, this reflects both a more competitive start to the year and a conscious shift towards higher-value channels and cohorts. Turning to page 13 and Spain. Net gaming revenue in the first quarter of 2026 was EUR 25.5 million, up 16% versus Q1 2025 and 4% sequentially. This was a result of a 13% increase in the number of active customers to approximately 59,000 players. With Spain being a more mature and tightly regulated market, especially in terms of advertising, we’re pleased to continue to growing our portfolio of customers while maintaining a strong profitability. Moving now to Mexico on page 14. Net gaming revenue in the country increased by 13% year-on-year in the first quarter of 2026, reaching EUR 34.6 million.

Growth in the quarter was primarily driven by a continued expansion of the active customer base, which increased by approximately 20% year-on-year to around 98,000 average monthly actives. This more than offset the lower average spend per active customer, reflecting the broader and more diversified player base we’re continuing to build in the market. On a sequential basis, active customer levels were slightly lower compared to the fourth quarter and have continued to decline into the second quarter of 2026. This was expected and reflects the implementation of tighter promotional rules aimed at reducing the participation of bonus hunters who were taking advantage of short-term promotions. While these players had limited impact on Net Gaming Revenue, they, so to speak, polluted our customer database and made segmentation more complex.

We view this as a positive step that improves the overall quality and sustainability of our customer base as we head up into the World Cup coming up in the coming months. Overall, Mexico remains a key growth driver for Codere Online. We continue to invest in expanding our customer base, improving the product and customer experience, and leveraging our scale. At the same time, we’re being selective and disciplined in our marketing investments. For example, we have recently secured an opportunistic content partnership with a leading television broadcaster that provides brand exposure immediately following goals during football games. This has been very effective in terms of reach and visibility, and this approach reflects our focus on pursuing efficient, high-impact opportunities rather than chasing more expensive and increasingly crowded World Cup-related content that we’re currently seeing across the market.

It supports our continued focus on marketing efficiency and ROI. Now, on page 15, looking at the balance sheet briefly. We closed the quarter with EUR 56 million of total cash on the balance sheet, of which approximately EUR 51 million was available. As in prior quarters, our structured negative working capital position remained in line at EUR 22 million or approximately 10% of our LTM NGR, and supported the cash generation we have seen in the quarter and that we expect going forward. Looking at cash flow on page 16, we generated EUR 6.5 million of cash flow in the first quarter 2026. Please note that this quarter we’re breaking down how much available cash was generated or used by decreases or increases, respectively, in reserved cash. This was previously included within changes in working capital.

Overall, we continue to see an encouraging trend, not only in delivering positive adjusted EBITDA, but also in converting most of it into cash flow. Having said that, the precise timing of certain cash flow items can impact the cash generation in any given quarter. Although, you know, across several quarters, this tends to even out. As a result, our available cash, as discussed, was EUR 51 million at the end of March. Very briefly on page 18, we are maintaining our 2026 net gaming and adjusted EBITDA outlook. As Aviv mentioned, we’re off to a strong start of the year, and we are comfortable in our ability to meet it.

As opposed to last year, in 2026, we’re enjoying some tailwinds, for example, in the Mexican exchange rate or in the Colombian gaming tax, which is more favorable this year and is helping us grow again our top line. If these trends and our strong execution in Spain and Mexico holds into the second quarter, we would expect to revisit our outlook with our second quarter results. That’s all from my end. I will now hand it back to Aviv for closing remarks.

Aviv Sher, Chief Executive Officer, Codere Online: Thank you, Marcus. Before we move on to the Q&A session, I would like to thank all Codere Online employees for their hard work in delivering a great start of the year. I would also like to thank the investors and analysts joining us today for their ongoing support and interest in Codere Online. With that, I will now hand the call back to the operator to open the line for questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jeffrey Stantial with Stifel. Your line is now open. Please go ahead.

Aidan Youngs, Analyst, Stifel: Good morning. This is Aidan Youngs on for Jeff Stantial. Thanks for taking our question. Starting off on guidance, if you look back historically, it looks like Q1 is typically one of the weakest quarters in terms of adjusted EBITDA seasonality, and then this year you have the benefit of the World Cup coming in Q2 and Q3. Marcus Arildsson, can you help us think about the bridge from that EUR 6 million of EBITDA you generated in Q1 to the EUR 15 million-EUR 20 million for the year? Is this mostly marketing investment around the World Cup, or how should we bridge those two?

Marcus Arildsson, Chief Financial Officer, Codere Online: Well, it’s undoubtedly we’ve come up to a very strong start during the 1st quarter, and our full year forecast is the EUR 15 million-EUR 20 million that we have set out in the previous call as we began this year, no? In past World Cups and in past similar events, we haven’t seen a tremendous amount of impact on NGR. We have seen an uplift, and we expect that for this year as well. We expect an uplift in activity, with a limited impact in NGR and on the financials. The World Cup is there. It’s gonna impact a few weeks in Q2 and a few weeks in Q3, at this stage, we don’t expect a very substantial impact on our figures.

Um

Aidan Youngs, Analyst, Stifel: Great. Thanks for that. Turning to Mexico, it looks like Stake.com recently entered the market. Can you update us on the competitive environment there and whether you’re seeing any upward pressure to CAC heading into the World Cup?

Aviv Sher, Chief Executive Officer, Codere Online: Well, we saw the announcements of Stake.com coming into the market. We didn’t see them, for example, yet on TV or on Google PPC. I’m sure they will come strong on that, at the moment, we are not seeing any of that. Some of our competitors are still down since late last year, as you all know. Other than that, we continue our activities as usual, continue to grow, continue to grow the database and the customer base. I don’t think it has anything to any pressure on our CAC or LTV. The opposite, I think it helps us a little bit. For us, we continue to comply with all regulations, all the taxes, everything required in Mexico to keep operating smoothly as before and to continue and deliver the results that you’re seeing.

Aidan Youngs, Analyst, Stifel: Great. Thank you. If I could just squeeze in one more. Can you update us on the implementation of AI into your processes? Where have you been able to see some benefits, and how should we think about that as a potential impact to the model, whether through cost mitigation or revenue-enhancing initiatives?

Aviv Sher, Chief Executive Officer, Codere Online: Listen, to be honest, at the moment, in the core business, we did not implement AI. Everything else, all the supporting areas, whether it’s the last employee, everybody’s using it. As a process right now, we are not using it in the core business. We don’t, we didn’t see any AI trading benefits or anything like that that you can right now imagine or have seen in the news. We didn’t see a working product yet. We are already using it in the customer service and maybe some outbound calls. We see good results. I think we need two more quarters before we can say that we found something really interesting in that area. It does support our operation in the day-to-day. I think every employee every few hours requests another ChatGPT or Claude license.

It’s not yet arrived to the core of the business, but in the surrounding, we are using it.

Moshe Edree, Executive Vice Chairman, Codere Online: No, no, more than that. It’s Moshe here. We already engaged with Google Israel that they are, like, supporting us in implementing tools that are related to Google, advertising tools, and they will start a process with us about implementing their tools into our system.

Aviv Sher, Chief Executive Officer, Codere Online: Yeah. Still early. I think two more quarters, and we’ll see something substantial.

Aidan Youngs, Analyst, Stifel: Great. Thanks for the color. That’s all for us. Pass it on.

Operator: Your next question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group. Your line is now open. Please go ahead.

Will, Analyst, Craig-Hallum Capital Group: Hey, good morning. This is Will on for Ryan Sigdahl. Thanks for taking our questions. First, I wanted to ask on Spain, you’ve had relatively strong performance there this quarter relative to what we’ve seen in prior years. Curious if you think this trend can continue and what you’re seeing in terms of the competitive environment there.

Aviv Sher, Chief Executive Officer, Codere Online: Yes. I think in general, for the last few quarters, we are already reporting Spain to that we see a growth, that we see good results. It’s important to say that we also see that the market itself grows a lot, at least from the regulator we saw last year, a big growth in the market for the whole year. We continue to push and optimize our customer acquisition to a higher value. We continue with that. We see good success with it. We also enjoy a couple of quarter of a strong technology stability, which allowed us to cruise through a few big games, with big, with good results. Also important to say, in the first quarter, trading margin was favorable for us. A lot of surprises along the way.

We also enjoy a trading margin here. Overall, we are very happy with the result in Spain, and yes, we think it will continue with this trend.

Will, Analyst, Craig-Hallum Capital Group: Great. Thanks for that. Then just a quick follow-up on Colombia. I know it’s a relatively small exposure for you, but with the removal of the 19% VAT, you’ve got a new 16% consumption tax out of that. Curious how you think of investment maybe there going forward and as well as if you’re looking into any potentially new markets. Thanks.

Aviv Sher, Chief Executive Officer, Codere Online: Yeah. Basically, the 16% tax allows us to continue and operate the current database that we have, which we did with, I think, very good success. We see it in the results, although it’s part of the other lines, but Colombia recovered quite nicely. Unfortunately, this current structure doesn’t allow us to really invest again into marketing, only operate and reactivate the large database that we have. We are, like everyone, I think, waiting for the results, the political results of the elections that are coming by the end of the month, and hopefully, the political environment will change there and will be more favorable toward the business, and then we will be able to invest. This is how we look at it.

We are very encouraged by the results of activating the database, which we thought would be harder, but actually, we did pretty well with that. I think if the business environment will change a little bit more or, for example, when they remove completely the 19%, we were already ready to make new investments into Colombia and start considering it back as a, as a, not a significant, but as a separate market, let’s call it, with a separate investment line. Hopefully, the business environment will change after the elections, and then, and then we can grow it faster than now. Regarding, sorry, regarding other markets, currently no plans for new markets.

Will, Analyst, Craig-Hallum Capital Group: Hope it goes in your favor. Thanks, guys.

Aviv Sher, Chief Executive Officer, Codere Online: Yes. Thank you.

Operator: As a reminder, to ask a question, please press star 1 on your telephone keypad to raise your hand. Your next question comes from the line of Michael Kupinski with Noble Capital Markets. Your line is now open. Please go ahead.

Michael Kupinski, Analyst, Noble Capital Markets: Thank you, and thank you for taking the question. I was just wondering in terms of, you know, this, obviously was a great quarter in terms of an inflection for EBITDA, and I was just wondering, at what scale do you believe the business can consistently generate double-digit EBITDA margins? I have a couple of follow-ups.

Guillermo Lancha, Director of Investor Relations and Communications, Codere Online: Marcus.

Marcus Arildsson, Chief Financial Officer, Codere Online: Yes. Can you repeat the question just to try to really get the gist of it?

Michael Kupinski, Analyst, Noble Capital Markets: Yeah. I was just wondering in terms of what scale do you think the business can consistently generate double-digit EBITDA margins?

Marcus Arildsson, Chief Financial Officer, Codere Online: Yeah. Obviously, as you know, one of the key drivers of that is our marketing spend. The remaining cost items we have in the P&L, there are many of those, like gaming taxes, platform costs, et cetera, which are quite variable in nature. One of the most important spend line, of course, is marketing. As you know, our strategy is to continue to grow the business, but over time mature into a lower percentage of NGR, no? In terms of marketing spend, no? We think to be able to get to a double-digit EBITDA margin, we need to probably be below 30% in terms of marketing as percentage of NGR, no? When do we get there? Has to be seen.

I don’t think we’re in a position to make a forecast on it, but I think that’s the way we see it. When we start to get marketing below with the current cost structure we have, and as we’re looking forward, when we start to be able to get marketing below 30%, that’s when our EBITDA margin can start to approach 20 or maybe go above 20, but in that range, no. I think that’s sort of, let’s say, how we look at it, just looking out a few, a few periods.

Guillermo Lancha, Director of Investor Relations and Communications, Codere Online: Yeah. I would maybe add to that, Mike, that as you know, our marketing investment is pretty much entirely discretional. So, you know, it’s a bit also of a decision that we take as a management team to sort of how much we want to keep on investing. If the priority for us at some point to deliver double-digit EBITDA, that’s something that we could do by reducing that investment. Obviously, what we are managing for is sustainable growth in EBITDA, and for that percentage to decrease over time organically as relative to NGR.

Michael Kupinski, Analyst, Noble Capital Markets: Fair enough.

Aviv Sher, Chief Executive Officer, Codere Online: I think the key here is to balance, right? We are balancing between the revenues and the EBITDA as we see fit to generate the highest company value. This is the goal here.

Michael Kupinski, Analyst, Noble Capital Markets: Fair enough. Obviously, you have, you know, EUR 56 million in cash and no debt, and I was just wondering in terms of how management’s thinking about capital allocation priorities at this point. How much cash does the management believe is necessary to support its growth? You know, if you could just talk a little bit about capital allocation at this point.

Guillermo Lancha, Director of Investor Relations and Communications, Codere Online: Sure.

Moshe Edree, Executive Vice Chairman, Codere Online: Okay. Let me add something, Marcus.

Guillermo Lancha, Director of Investor Relations and Communications, Codere Online: Sure.

Moshe Edree, Executive Vice Chairman, Codere Online: Hi, it’s Moshe. First and foremost, as a public company, we are, we have guidelines by the board of directors and our forecast based on the board of directors’ decision about the targets and the EBITDA and the organic growth that from time to time we are looking. If there’s anything that we do with the cash that it’s more than just marketing. Obviously, up until now, there wasn’t anything substantial that we brought to the board. As you know, it’s not just about invest the money in marketing, but it’s also to keep the same ratio and the CAC of the investment, and that’s what we are keen for.

I mean, that any additional dollar that we spend in Spain or Mexico, which is our, like, biggest markets and the major markets, that receive the same ratio of investment versus the ROI on this investment. That’s how we’re managing the cash. Although it seems that it’s quite liquid, having, like, EUR 50 million in cash, but it’s not still, I would say, sufficient amount that we would do anything that just in the order of investing it. As you know, lately we had, like, some a buyback process that we used some of this cash. Other than that, there isn’t anything that we’re looking at in terms of acquisition.

Marcus Arildsson, Chief Financial Officer, Codere Online: Maybe just to-

Michael Kupinski, Analyst, Noble Capital Markets: Okay.

Marcus Arildsson, Chief Financial Officer, Codere Online: Thanks, Moshe. Maybe just to add to that. The cash we have, obviously a very significant part of it is invested in the business. It’s working capital. As you know, we operate in five markets. We have a number of different payment alternative for our customers, et cetera. You know, a very substantial portion of our cash is invested in the business, and it’s working capital, and it’s not sort of, say, readily available. I mean, it’s invested in the business, and it’s, and there it is. We are generating cash, as you know. Net, we’re adding to our cash as we speak. That’s great news that we have turned the corner, and we’re adding to our position.

Beyond the comments that Moshe mentioned, of course, we will look at, and we are looking at certain expansion opportunities. If and when opportunities come around for either further investments in our current markets, we will look at that, and we can also contemplate, you know, entry into other markets. At this time, I think the important piece is to think about that, yes, we are generating cash. 2, most of the cash today is invested in the business and as working capital. You know, as the quarters go by, we will amass a little bit more cash. One of the levers that we have to use that is to return to shareholders through our buyback.

I think that’s the position we’re in at this stage.

Michael Kupinski, Analyst, Noble Capital Markets: Perfect. Thank you for taking the question.

Operator: As a reminder, if you would like to ask a question, please press star one on your telephone keypad to raise your hand. That is star one on your telephone keypad to raise your hand. Please stand by while we compile the Q&A roster. There are no further questions at this time. I will now turn the call back to Guillermo Lancha, Director of Investor Relations and Communications, for closing remarks.

Guillermo Lancha, Director of Investor Relations and Communications, Codere Online: Thanks, Derek. If there are no further questions, I guess we will leave it here. If anyone has any follow-ups, you know where to reach us. If not, we will be talking again with our Q2 results by the end of July. Thanks. Thanks everyone for joining.

Moshe Edree, Executive Vice Chairman, Codere Online: Thanks.

Marcus Arildsson, Chief Financial Officer, Codere Online: Thank you.

Moshe Edree, Executive Vice Chairman, Codere Online: Thank you, Mr. CEO.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.