This article first appeared on GuruFocus.
Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Codere Online Luxembourg SA (NASDAQ:CDRO) delivered its highest quarterly revenue to date at EUR69.4 million, a 27% year-over-year increase, driven by strong execution in Spain and Mexico.
The company raised its full-year 2026 net gaming revenue guidance to between EUR255 million and EUR265 million, up from the previous range of EUR235 million to EUR245 million.
Adjusted EBITDA improved significantly to EUR5.8 million in Q2 2026, compared to EUR2.3 million in Q2 2025, with the company also raising its full-year EBITDA guidance to EUR20 million to EUR25 million.
Customer acquisition efficiency improved, with 108,000 first-time depositors acquired in the quarter (up 37% year-over-year) and cost per acquisition declining to approximately EUR200 from EUR217.
The World Cup performance was outstanding, with stakes reaching approximately EUR63 million (180% above the 2022 tournament) and nearly 40,000 new customers acquired, highlighting the company’s increased scale and engagement.
Spain’s net gaming revenue grew nearly 25% year-over-year to EUR27.6 million, driven by strong retention, healthy acquisition, and improved player values, with the company recovering market share in a mature market.
Mexico, the company’s largest market, saw net gaming revenue increase 24% year-over-year to EUR36.1 million, benefiting from a more rational competitive environment and higher spend per active customer.
Colombia benefited from the removal of the 19% VAT on customer deposits, allowing the company to reengage players and recover activity levels to pre-tax levels.
The company ended the quarter with a strong balance sheet, holding approximately EUR63 million in total cash with no financial debt, providing significant strategic flexibility.
Marketing expense as a percentage of net gaming revenue decreased to 37.7% from 41.5% in the prior year quarter, demonstrating improving operating leverage.
Negative Points
Average monthly active customers in Mexico declined 10% sequentially from Q1 2026, as the company intentionally cleaned its customer database to improve quality, which may impact short-term growth metrics.
The competitive environment in Mexico is intensifying, with new large competitors entering the market and offering aggressive promotional incentives like large free bets, requiring continued investment to maintain market position.
Colombia still faces tax uncertainty, as an additional layer of tax remains in place, preventing the company from resuming full marketing investment until a more favorable regulatory environment is confirmed.
The company did not repurchase any shares during the second quarter, despite having an active buyback authorization, which may disappoint investors seeking immediate capital return.
The World Cup’s impact on customer retention is still uncertain, as it is too early to determine if the 40,000 new customers acquired during the tournament will remain active long-term, with historical patterns suggesting many may be event-specific bettors.
Spain faces upcoming regulatory changes, including new restrictions on VIP players and joint deposit limits, which could pose headwinds to future growth in the market.
The company’s share price suffers from a lack of liquidity compared to larger peers like Rush Street and Super Group, which may limit the effectiveness of buyback programs and investor interest.
Gaming taxes as a percentage of net gaming revenue increased materially in the quarter, driven primarily by Mexico and Colombia, putting pressure on margins.
The strong Mexican peso has increased marketing costs in euro terms, as local currency spending translates into higher euro-denominated expenses.
The implied EBITDA flow-through for the second half of 2026 is lower than the first half, suggesting potential for slower margin expansion in the coming quarters.
Q & A Highlights
Q: Can you talk about what you’ve seen in terms of retention and cross-sell from the 40,000 new bettors acquired during the World Cup? Also, how did the cost per acquisition (CAC) come down quarter-over-quarter despite more competition around the tournament?A: Aviv Sher, CEO: It’s still early to say as the World Cup just ended a few weeks ago. We already see players continuing to play, but we need more time to know their exact value. Regarding the CAC, we didn’t invest as much as others in expensive World Cup broadcasts. Our strong brand likely attracted users searching for betting, and our strategy of keeping money around the event proved effective, leading to a lower CPA.
Q: With the updated guidance implying a lower EBITDA flow-through in the second half, can you help us think about the puts and takes and the right go-forward EBITDA flow-through?A: Marcus Arilson, CFO: We don’t expect material differences in flow-through between the first and second half. Over time, we see leverage in marketing and other overhead expenses. Gaming taxes and platform costs are more variable. We expect to progress by keeping marketing as a lower percentage of NGR and gaining additional operating leverage in other expenses.
Q: How are you thinking about investment in Colombia now that the VAT tax has been removed? Is there a wait-and-see approach on marketing investment due to tax uncertainty?A: Aviv Sher, CEO: The current tax level is enough for good CRM and retention but not for marketing investment with a good ROI. We are in a wait-and-see mode. If another layer of tax is removed with a potential political change, we can discuss increasing marketing investment again. We are happy with the ROI on our current customer base.
Q: What percent of new activations from the World Cup are also playing iCasino?A: Aviv Sher, CEO: We see around 30% to 40% cross-activation. These new users are playing iGaming, more table games than slots. The team is doing a good job cross-selling them, and the profile fits our regular profile so far.
Q: Monthly actives in Spain and Mexico took a sequential step down despite the World Cup. Is this concerning?A: Aviv Sher, CEO: It’s not concerning. We entered the summer, and half of the World Cup is missing from these results. The active user base is healthy, and we are intentionally cleaning it, which is why spend per customer and revenue are going up. Looking at the active KPI alone is not enough.
Q: Excluding the World Cup, how have betting volumes and customer activity trended during July? Is the momentum continuing into Q3?A: Aviv Sher, CEO: We saw a lot of iGaming activity, and casino beat expectations by a lot. The trajectory continues. We have a few weeks until La Liga returns, but I am optimistic for Q3. Marcus Arilson, CFO: The World Cup NGR effect fell roughly 50% in June and 50% in July.
Q: Historically, what percentage of tournament-acquired customers remain active 6 to 12 months after a major event?A: Aviv Sher, CEO: In general, these players don’t last a long time and often return for the next big tournament. They are not one-timers but may be single-bet players. Our rule of thumb is if the CPA is low, the return is likely lower. We can provide more specific figures via email.
Q: Can you add more color on the competitive environment in Mexico and the changes in promotional intensity, especially following the World Cup?A: Aviv Sher, CEO: While two big competitors are out, four new big ones are coming in. The more they expose gambling, it benefits us as a veteran with heavy TV investment. The environment is harsh with competitors offering large free bets. We are confident in our strong brand and retention schemes, but we must continue investing in top-of-mind awareness and promotions to compete.
Q: You have significant cash and no debt. How are you thinking about capital allocation and improving shareholder value?A: Marcus Arilson, CFO: We are evaluating strategic options, mostly in Latin America, looking at how to get licenses in newly regulating markets. This is a key avenue for deploying cash. The share repurchase program is still in place, though we haven’t been active this year. We expect to allocate more money through M&A than the buyback program over the next year.
Q: What is a more normalized, non-growth level of marketing for this business? Should we expect it to migrate to the 15-25% of revenue range seen at competitors?A: Aviv Sher, CEO: We should migrate to the higher end of that range, around 22% to 28%. In Spain, we are already close to those levels. In Mexico, we still see it as a growth market and need to spend to hold our position. It’s a strategic decision on how much EBITDA to generate versus growth. Marcus Arilson, CFO: In Colombia and Argentina, we are in a wait-and-see mode with low marketing. In Panama and Spain, we are in the stable-state ballpark. The answer lies principally in Mexico.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.