Codere Online Luxembourg, S.A. Q2 2026 Earnings Call Summary – Moby Strategic Performance Drivers
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Record quarterly revenue was driven by accelerated growth in Spain and Mexico, alongside a recovery in Colombia following the removal of a 19% VAT on customer deposits.
The World Cup served as a major acquisition catalyst, with stakes reaching approximately EUR 63 million, representing a 180% increase over the 2022 tournament.
In Mexico, revenue growth was driven primarily by higher spend per active customer as management intentionally cleaned the database to reduce promotional abuse and improve player quality.
Spain’s outperformance was attributed to structural market growth and successful market share recovery, supported by enhanced platform stability and AI-driven retention tools.
Marketing efficiency improved as the company leveraged its strong brand to acquire customers organically during the World Cup, avoiding high-cost broadcast advertising.
Profitability gains reflect inherent operating leverage, with marketing expenses decreasing as a percentage of net gaming revenue despite higher absolute spending.
Strategic Outlook and Guidance Assumptions
Full-year 2026 revenue guidance was raised to EUR 255-265 million, assuming continued momentum in Spain and a favorable competitive environment in Mexico.
Adjusted EBITDA guidance was increased to EUR 20-25 million, reflecting strong cash conversion expectations and disciplined marketing spend.
Management expects to gradually migrate marketing spend toward a stable-state range of 22% to 28% of revenue over the next few years.
Future growth in Colombia remains contingent on further tax regulatory changes; management is maintaining a ‘wait-and-see’ approach before re-accelerating marketing investment there.
The company is evaluating strategic M&A and licensing opportunities in Latin America, specifically targeting newly regulating markets like Uruguay and Chile.
Operational Risks and Structural Factors
The Mexican Peso’s strength contributed over EUR 4 million to the first half results, though it also increased the Euro-denominated cost of local marketing.
New regulatory hurdles in Spain, including joint deposit limits and VIP restrictions, are expected to be manageable but remain a factor for future periods.
The competitive landscape in Mexico remains ‘harsh’ with heavy-spending new entrants, requiring Codere to maintain high promotional activity for core and VIP segments.
Management acknowledged that low liquidity in the company’s shares continues to impact valuation relative to larger industry peers.
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Q&A Session Highlights
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Retention and cross-sell performance of World Cup acquired customers
Management observed approximately 30% to 40% cross-activation into iGaming (primarily table games) among new World Cup users.
While early results are positive, management cautioned that tournament-acquired players often have lower long-term value and higher churn rates compared to core users.
Marketing investment strategy and long-term margin targets
Nominal marketing spend for 2026 is expected to be between EUR 90 million and EUR 100 million, slightly higher than 2025 due to FX and opportunistic spending in Spain.
Management confirmed the business is migrating toward a lower marketing-to-revenue ratio to align with mature industry peers while balancing growth in Mexico.
Capital allocation priorities between M&A and share buybacks
With EUR 58 million in available cash and no debt, management expects to prioritize M&A and new market entries over share buybacks in the coming year.
The share repurchase authorization remains in place through 2026 as a secondary tool to address valuation and liquidity concerns.