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.
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The World Cup served as a major acquisition catalyst, with stakes reaching approximately EUR 63 million, representing a 180% increase over the 2022 tournament.
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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.
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Spain's outperformance was attributed to structural market growth and successful market share recovery, supported by enhanced platform stability and AI-driven retention tools.
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Marketing efficiency improved as the company leveraged its strong brand to acquire customers organically during the World Cup, avoiding high-cost broadcast advertising.
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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
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Full-year 2026 revenue guidance was raised to EUR 255-265 million, assuming continued momentum in Spain and a favorable competitive environment in Mexico.
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Adjusted EBITDA guidance was increased to EUR 20-25 million, reflecting strong cash conversion expectations and disciplined marketing spend.
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Management expects to gradually migrate marketing spend toward a stable-state range of 22% to 28% of revenue over the next few years.
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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.
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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
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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.
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New regulatory hurdles in Spain, including joint deposit limits and VIP restrictions, are expected to be manageable but remain a factor for future periods.
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The competitive landscape in Mexico remains 'harsh' with heavy-spending new entrants, requiring Codere to maintain high promotional activity for core and VIP segments.
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Management acknowledged that low liquidity in the company's shares continues to impact valuation relative to larger industry peers.
Q&A Session Highlights
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Retention and cross-sell performance of World Cup acquired customers
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Management observed approximately 30% to 40% cross-activation into iGaming (primarily table games) among new World Cup users.
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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
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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.
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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
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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.
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The share repurchase authorization remains in place through 2026 as a secondary tool to address valuation and liquidity concerns.
